A new study shows a dramatic drop in millennials moving to areas with higher-paid jobs.
Young private renters in England are now only two-thirds as likely to move elsewhere for work as they were two decades ago, according to the Resolution Foundation think tank.
Young people are also less likely to change job at all than in the past, despite the rise of the gig economy and more temporary, flexible and insecure work.
The findings have been widely reported in a negative light, with concern over young people’s prospects and the impact on the UK economy.
The study says higher education, higher immigration, delayed parenthood and the rise of private renting should all tend to make younger people far more likely to move to find work. It says such mobility ‘should’ have risen 50% in the past two decades, but has actually dropped by a third.
There are good reasons to be alarmed—but there are also good reasons to see positives in the figures too.
The overall picture is a lot more complex than some doom-and-gloom coverage—such as the Guardian’s headline, ‘City ambitions out of reach.’
The risks for millennials and for business
The ‘Moving Matters’ report warns that rising rents in more productive areas like major cities are making it harder for younger people to afford to live there. This could be deterring them from moving to such areas at all.
It shows rents have risen faster than earnings in 165 local authorities in England, perhaps reflecting not only an overheated property market but also a squeeze on young people’s incomes particularly since the financial crisis.
It not only risks depriving young people of access to the cultural and social benefits of city life, but also of higher incomes, skills and the chance to get on the housing ladder.
The Resolution Foundation says swapping jobs to a different organisation is the best route to a higher salary, with a particularly high premium for workers moving to more productive areas.
“We know that job mobility is especially important at the start of one’s working life, when progression depends on testing out new roles and developing new skills,” the think tank says in a report released today.
Just as significantly, it notes the potential costs to organisations from a smaller pool of talent able or willing to move for work.
“An agile workforce is generally viewed as good not just for the individuals concerned, but also for the economy as workers ‘match’ more efficiently with business requirements,” it adds.
The positives of staying put in small-town Britain
Some might see young people staying put as a refection of the “snowflake” millennial attitude.
The study itself quotes the famously stern views of former Conservative minister Norman Tebbit when unemployment was soaring in the 1980s, who pointed out his dad simply got “on his bike” to find work elsewhere.
More recently, an Australian real estate boss urged millennials to stop buying expensive avocados on toast if they wanted to get on the housing ladder.
But there are signs in the latest report that some millennials may be quite happy staying put, with small-town Britain a less depressing place to live than several media reports suggest.
For one, a growing number of millennials are no longer forced to move to find any job at all through economic necessity.
The study says there are now more jobs available in many young people’s home towns, villages or cities than there were in the 1990s, when unemployment figures were much higher.
“It is easier to find at least some type of work in the vast majority of local authorities today than it was two decades ago,” it notes.
The pay rise young people can expect if they move to more productive areas is also far less than it used to be, according to the study. There is still a significant ‘wage premium’ from moving, but it has fallen in the past two decades.
The Resolution Foundation says the gap in living standards between areas with higher- and lower-paid jobs has narrowed. Average pay levels have risen faster than rents in lower-paid areas on average, whereas rents have risen faster than pay in better-paid areas.
The reality is that some millennials may be choosing, rather than forced, to stay in small-town Britain.
The report notes moving may mean losing access to family support with childcare, but it could also come down to the simple desire to stay close to friends, family and areas they know.
Not everyone is attracted to big city life. Perhaps some prefer quieter neighbourhoods, stronger community or larger homes to house shares in busy, unfamiliar places where cafes sell overpriced avocados on toast.
By Tom Belger
Source: Yahoo Finance UK