Has the prolonged recession weakened younger generations’ professional position?

Taking one’s first steps into working life is a critical stage in a person’s career, and it often has far-reaching consequences. Many years after the 1990s depression in Finland, it was still impacting the careers of those who had entered the world of work at the time. There is a risk that the financial crisis of 2008 is having a similar impact on the career development of those who have moved into working life in the past few years.

Despite what is often said, the amount of temporary work has not increased significantly. Instead, there is a difference in what kind of professional position young adults can achieve.

Examining Statistics Finland’s employment statistics reveals interesting but worrying information. The likelihood of young adults aged 25–34 becoming senior salaried employees has decreased between 2008 and 2016, even though the share of all employees that is made up of senior salaried employees has had a clear increase. Before 2008, the share of young adults who were senior salaried employees was two per cent higher than the share of all adults at work who were senior salaried employees, while the situation is now the opposite.

Where have the young people been employed, then? When comparing 2006 and 2016, the number of adults in an employee position has fallen by 3.9 per cent compared to everyone in employment. For young adults, however, we hardly see any change. Young people are now more likely to be in an employee position than middle-aged people.

So, it seems like the average professional position of young people is no longer as good as it was before the financial crisis. This means that the career development of young people seems to have slowed down. Young adults have been left behind by earlier generations.

In addition to the financial crisis, there is also another factor which can explain why young people’s professional position has weakened in comparison with previous generations. Young people’s level of education is no longer increasing like it did previously (Educational structure of population, Statistics Finland). In fact, the share of 25–34-year-olds with a university degree has been reduced in the past ten years even though an increasing number of people of working age have a university education. This means that young people no longer have the same relative advantage compared to older generations that they still had in the early 2000s, when young people were better educated than middle-aged people.

The changes in the professional position of young adults are interesting, not only from a generational perspective but also from a gender perspective. Out of all young adults at work, women have been more likely to work as senior salaried employees than men for a long time. In 2016, women gained this advantage in relation to all working adults.

Nevertheless, there are still major gender differences within specific occupational groups; this also affects young people. Out of all senior salaried employees, young women are more likely to work in education, while young men more often work in design and research roles. When looking at senior salaried employees working as managers, there are still three times more young men than young women in these roles.

The phenomenon of young adults’ career development slowing down is worrying and requires further research. In an analysis published by the Bank of Finland (Kinnunen & Mäki-Fränti 2016), particular attention has been paid to the slowing down of the salary development of young generations. This, in conjunction with the changes in professional position and level of education, sends out some worrying signals in regard to both young people and society as a whole.

 

Erno Mähönen

 

[1] Between 2009 and 2010, the share of all young people at work that was made up of senior salaried employees changed by only 0.1% in relation to all employed people.

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