Economic security and a better future for young people

Major changes to the way we live and work – compounded by the pandemic – mean that young people today are entering a completely different world to their parents and grandparents.

Hannah Webster argues that if young people are to flourish in this new world of rapid change and insecurity, we need policies that support young people in the here and now, whilst also protecting their futures. Thinking about economic security is one way to do this.

In the UK, the default response to Covid-19 has been limited in its foresight, with sticking plasters offered in the place of systemic change. Take for example the recent extension of a £20 uplift in Universal Credit being capped at just six more months. This has understandably sparked outrage and concern for the millions left in an incredibly precarious position within the wider context of the lack of generosity in the UK welfare system; as the Joseph Rowntree Foundation explore, this uplift goes only some way to making up for a sustained period of freezing and capping benefits. But the policy also reveals the deeper challenge of building the future into our policymaking today.

Rather than acknowledge the long-term need for a continuation of the uplift and stability for those claiming Universal Credit, the short-termism of this policy places recipients in a position of increased precarity. It undermines people’s sense of security, sending a message that they should not get used to being able to cover their bills, pay for the food or to support their family. It makes individuals less able to plan for their future or to build the resilience needed to navigate it.

This is challenging for all, but young people are at the sharp end of the current Universal Credit crisis. In the first three months of the pandemic, the number of 18-24 year olds claiming Universal Credit doubled, rising to over 500,000. They are the age group that have seen the highest increase in claims. Young people are also the group who receive the lowest income from the benefit, receiving over £65 less per month in standard allowance than those over 25 years old.

Economic security offers a longer-term approach

The RSA defines economic security as “the degree of confidence that a person can have in maintaining a decent quality of life, now and in the future, given their economic and financial circumstances.” It is something that we have argued is a mega challenge as we enter into the next decade.

This framing gives us space to acknowledge that economic security is a dynamic experience: it is informed by our past, anticipates our future and is felt in the present. The short-termism of the Universal Credit uplift – as well as last minute extensions to the furlough scheme, the freezing of public sector pay and more – does little to support young people in the long term or to offer confidence about their quality of life in the future.

By contrast, placing economic security at the heart of a policy means that its impact can only be seen over time. In other words, a policy that centres economic security as a key outcome is one that might not be measured immediately but prepares us better for the future. This will be key as we support young people to recover from the crisis. 

We need to account for change on the horizon

There are some challenges we can clearly foresee that will affect the economic security of the next generation. Many of these relate to young people’s employment, a key factor in their economic security. A move away from binary models of work – employed or unemployed, self-employed or employee – to a complex array of working patterns and types and increased employment in the gig economy all spell change for the type of work available for young people.

And we have already seen what a lack of foresight here can mean. The ruling last month which concluded that Uber drivers are not self-employed will have wide-ranging implications for other gig economy work. But it came almost 11 years after the company was first set up. Failing to pre-empt the scale of disruptors like Uber means that policymakers were on the back foot for protecting the economic security of gig economy workers.

Disruption to employment patterns will be compounded by changing roles for young people. Recent research from the RSA’s Future of Work Programme found that automation in combination with the impact of Covid-19 on the hospitality and tourism sectors put young people at greatest risk.

And more broadly, pressure for our economy to shift to a regenerative and sustainable model will increase over the coming decade, affecting the breadth of skills the next generation will require, as is outlined by The World Economic Forum’s Jobs of Tomorrow report.

As we respond to the pandemic in the immediate, we need to get better at predicting, preparing for and being responsive to longer-term shifts taking place. Without accounting for these, we risk offering no guarantees about young people’s future economic security.

Listening to young people is vital

The RSA’s Living Change Approach outlines how we believe change happens. Our approach requires us to learn, adapt and think ahead.  It encourages us to spot opportunities as change happens and asks us to be continually learning. This approach is critical to creating a future that works for young people.

There is no singular future; it constantly changes and will be experienced by everyone differently. This makes for a complex challenge but one that we should embrace and within which we should heed the Living Change Approach’s ethos of learning. To improve young people’s economic security, we need to understand their concerns about the present and future. This means listening to and learning from them and being ready to identify opportunities and adapt our processes to better support them.

This kind of approach underpins the thinking behind the Wellbeing of Future Generations Act in Wales, which requires all policy to have an account of its implications for generations to follow. The Act seeks to ensure that future generations have the freedom to adapt to their own circumstances and not to be dictated by decisions made in our current reality. This will be important for economic security as well as wider wellbeing.

As the RSA’s Adanna Shallowe has argued, foresight work “must avoid reproducing the power relations of the present, engage in deep listening, and invite the participation of non-experts and also representatives from future generations to be 'in the room'."

This needs to be done inclusively and with participation from those who are likely to be affected. Without this there will be, at best, a poor account for the subjective experience of insecurity. Many organisations are starting to provide these spaces for engagement. For example, Alyve UK – a Scotland-based charity that advocate for and support local youth forums, and an RSA Catalyst grant recipient – supports young people to participate in conversations about what affects them.

The RSA – in partnership with the Health Foundation – will be leading an enquiry into young people’s economic security across four places in the UK. This work will require us to think in the long term. With major societal challenges on the horizon, how do we need to change the way we have approached training, employment and our welfare state if we are to offer young people the security they need?

Prioritising economic security as an ambition as we recover from the pandemic will allow us to support the next generation to live good lives and to ensure that their economic and social wellbeing is resilient to changes in the world that surrounds them. Their economic security sits hand-in-hand with our ability to anticipate what might come next.

The RSA has been at the forefront of societal change for over 250 years – our proven Living Change Approach, and global network of 30,000 problem-solvers enables us to unite people and ideas to understand the challenges of our time and realise lasting change.

Make change happen. Find out more about our approach. #RSAchange