‘My balance is on zero’: young Europeans on their first experience of inflation | Young people

In May 2021, while much of the world was still navigating Covid-19, the OECD warned that young people were being disproportionately hit by the crisis and that there was a risk of “long-term scarring” on their careers and on their economic outcomes. It also found that many young people were suffering from increased instances of depression and anxiety about jobs and personal finances. These worries have not gone away but the inflated cost of living rather than the pandemic, appears now to be acting as the main drag on younger lives. Across the continent, under-30s find their ambitions frustrated by worsening economic conditions. Some of them spoke about the pressures they face in making ends meet, often while juggling work and studies.

Rent

High rents, low pay and high unemployment in Spain conspire to make living with parents the only option for many people in their twenties. At 32%, Spain has the highest youth unemployment rate in both the EU and the OECD. Aitana Moreno, 26, is a teacher who is studying for a masters in interpretation. She recently returned to her home town of Madrid from France where she previously had a teaching job. She lives with her mother. “I have to study and work at the same time and I live with my mother because I do not have enough money to pay rent and to study. It is impossible to afford living alone in Madrid. I don’t flatshare because I do not have a full-time job, and nobody would rent out a room to me if I do not have 40 hours a week contract”.

Those who do try to live independently can struggle financially. The Spanish government this year introduced a special rental allowance worth €250 a month for young people earning less than €23,725 and the Madrid region has cut the cost of public transport. Diana Peinado, 26, is a social worker in youth housing. She has recently applied for the government’s stipend to help pay her €600 monthly rent on the small 40sq metre flat that she shares with a flatmate and her dog Cumbia.

She said: “I am happy renting and sharing, but it’s not like other options are within my reach anyway. Even though this apartment costs me €600 a month, plus bills, I moved in knowing I was eligible for the grant, I wouldn’t have done so otherwise. The government will give me €250 and it will a great relief when budgeting each month. It won’t solve my life, but I will be able to enjoy it a little more. On the other hand, this grant restricts you in some ways. You are obliged to have a permanent contract (which I do), but most contracts in my industry are fixed term, so I cannot change job as easily as I would like.”

According to the Spanish property search engine Idealista, the average rent in Madrid increased by 14% between 2021 and August 2022. Diana will have little choice but to remain in her small flat.

In London, rents are rising even faster – with Zoopla reporting a 17% annual increase in the average London rent – outpacing what many younger people can afford. Hollie Clark, 27, works full-time as a buyer for a fashion website and in a pub on top of that for 10 hours a week. Her rent in the inner city borough of Hackney was affordable at £1,550 a month, split between her and her boyfriend. But it has now increased by £650 a month. She was told “this is definitely happening. Pay it or leave”. “So I’m definitely leaving,” she said. “It’s insane. I can’t find anything under £1,700 and most of those are one bedroom. So, I’m going to be paying more for less space.”

Inflation

As well as spiralling rents, double-digit inflation for utilities, food and other goods are being felt for the first time by many young people. Across Europe, inflation, averaging nearly 11% in November, has not been as high for 40 years. The Baltic states are hardest hit, coping with inflation of more than 20%.

In Hollie’s case, it means the money she saves from pub work is spent by the end of the month.

Others in more precarious situations are forced to make more fundamental cutbacks. Joachim Valente, 23, from Toulouse, worked until September at a printers in the city, where he sorted boxes for delivery. He earned €800 a month before, but now he has resumed the studies that he had interrupted to get a job. Joachim’s income is about €500 a month from a student bursary plus whatever his grandmother can spare, but his rent on the flat he shares with two friends is €1,000 which they split equally. “I really picked the perfect time to return to studying didn’t I?” Joachim said. “It’s really hard now, my way of life is not the same as last year. When you are a precarious worker, you always take care with what you buy and what you save, but now it’s off the scale. I used to buy more meat. I don’t buy so much now, maybe once or twice in a month because it’s too expensive. We have about 10% food price inflation, so you really have to look at what you buy”.

The French government has capped energy price increases at 4% (though this will change to 15% in January), but for those young people already struggling to make ends meet, such as apprentices whose wage is lower than the national minimum, even the 4% price increase is a challenge.

Matteo Leroux, 22 is an apprentice in electrical engineering. He earns €900 a month and lives alone in an apartment in Marseille that costs €400 a month. Like Joachim, he has stopped buying meat and has swapped it out for tuna, but his biggest problem this winter is the cold. “The problem with my apartment is that there is no insulation. Sometimes I want to put the heating on, but I can’t because the energy bills cost too much. So, I bought a gas heater, but because the block is very old, the insulation isn’t there and the windows aren’t glazed, it’s often still cold”.

Low pay

In Lithuania, the average wage is €1,678 and the minimum monthly wage is €720 before tax. Because wages are low, many young Lithuanians leave. Despite 15- to 25-year-olds making up 20% of residents, they make up 47% of emigrants. Some young people with a university education that remain try to work for foreign companies as a means of upping their earning potential.

Dominykas 26, in Vilnius, has just started remote working for a British IT firm to earn more than a similar company based in Lithuania would offer. “In the spring, I noticed that the cost of living was increasingly rapidly, so I started looking for new opportunities. Inflation over the last 12, or 24 months has been insane, apartments that were €400 a couple of years ago are now €800. The cost of electricity went up massively for a while, I think because of the [Ukraine] war. At my previous company they said there would be no raises due to inflation. I was pushing them saying ‘I will quit’, and they didn’t believe me. But I saw a bigger opportunity with the UK [company].”

In several countries, contracts designed to give young people employment-based training can leave them struggling. Italy has no national minimum wage, relying instead on collective bargaining agreements that leave many workers excluded.

Alice Spada, 23, is an intern at a social enterprise in Rome. She earns €800 a month and the rent on her shared flat is €480 a month. She receives support for the rent from her parents, but still finds herself with little left at the end of the month. “It’s frustrating,” she said, “I studied so much to earn so little. I know I am very lucky to have my parents supporting me. But they are not supposed to be supporting me.”

Having had the experience of a stint working in France, Aitana in Madrid believes young Spanish job seekers have it worse. “I think the situation regarding jobs is harder in Spain, you cannot find work that suits you, or matches your qualification level and the salaries are shit. Even though the university I’m studying it is public, it is expensive. I still have to pay about €2,000 a year whereas in France its free, you just pay the small administrative fee.”

Gig workers are hit hard by the rising cost of living as well and the falling wages in platform work. Shaf Hussein, 28 in London, works full-time at a department store in the day and as a courier for delivery apps for several hours most evenings. Shaf used to work full-time for multiple delivery apps and was able to make about £13 an hour, but downward pressure on wages which he blames on the platforms adding more workers and changing their algorithms, means he’s now lucky if he makes £10 an hour during the busiest parts of the evening.

“If I had not got this [department store] job, I don’t know where I’d be, because my bank balance is on zero. I got two credit cards to build up my credit, but the cost of living crisis hit, I now owe money and my credit score has gone down”.

Like Joachim and Mateo, Shaf has changed his diet in response to inflation. “I used to take an hour’s rest and used to love going to Pret or Wok to Walk and getting some proper food. Now I’m buying a can of Monster or a meal deal. Just eat and get back to work. If I’m doing a full day, it’s no longer enjoyable.”

Aitana, Diana, Holly, Mateo, Joachim, and Shaf all said that they were not at all optimistic about the future of their country’s respective economies.

“The news is so chaotic, when you watch it, you have the sense that everything is going wrong” said Aitana. “They keep saying recession, recession, recession, the economy is failing. So, I’m not optimistic”.

“If I had to leave the economy alone, hoping that it would get better by itself I would be absolutely pessimistic,” Joachim said. “The light in the darkness I see everywhere in Europe, is to see all these workers striking.”