Ahead of the pupil protest outside the SQA’s HQ today, it is worth thinking about the structural disadvantages facing young people from deprived communities in the broader context of this economic crisis. Economics commentator Aditya Chakrabortty wrote yesterday about the enormous ‘Covid jobs crisis’ to come when the furlough scheme finishes at the end of October, with too many people chasing not enough jobs. Already, Chakrabortty says, 600 people are applying for a part-time job selling candles in a shop in Alnwick.
“Imagine what this adds up to: a graduate a couple of years out of university loses her job, then her rented flat then, if lucky, ends up back at her parents’ with a mountain of debt,” he writes. “To keep up on the mortgage, a family goes from shopping at Sainsbury’s to queueing at the food bank. And the part-time lecturer with a PhD has no option but to try for that job selling scented candles.”
This got me thinking: let’s not just imagine what it would be like for one of the pupils on the protest today in coming years, let’s have a little go at tallying up the numbers of the sort of scenario one of them could face financially.
Let’s call this person Cecilia, who is 18 years old. Let’s say, unlike in Chakrabortty’s case above, Cecilia is from a family where living at home is not an option, where there is no Bank of Mum & Dad to fall back on, and where she wants to live in Edinburgh despite missing out on a place at university, after her teachers estimates for Bs were bumped down to Cs after the SQA took a look at the historical attainment data of her school. Let’s also say she manages to get a job at Primark, after the retailer accesses the UK Government’s new ‘kick-start’ scheme, where the government pays the company £6,500 per young person they take on.
Cecilia’s minimum wage pay is £6.45 (for 18-20 year old’s), which at 32 hours a week is £825.60 a month. According to the ‘EntitledToBenefits’ calculator, she pays just £4.07 per year in tax and national insurance on that income. She makes no pension contributions. She gets no Universal Credit.
A quick look on Zoopla suggests your average one bedroom private rented flat in the Gorgie right now is around £725 per month. Because she is under-35 she only gets the shared bedroom rate for Local Housing Allowance, which in Edinburgh is £379.28 a month. So Cecilia has to pay £345.72 every month out of her own pocket towards rent, close to half of her income.
Cecilia is in council tax band B, which in Edinburgh totals £1,389.66 per year (£116 a month). She knows about the council tax discount through a friend, and gets 25 per cent off that, reducing the cost down to £87 per month.
Energy bills plus internet is another £180. She gets a monthly pass on the bus to get to work everyday, which would be £56 but for the fact she is under-19, and thus it is free for Cecilia (for a year). The cost of food each month would usually be £250, but because she is buying cheap and being careful it brings it down to about £200.
Total costs £812. Wages after tax £821.72, leaving her just shy of £10 for everything else. Let’s say Cecilia would like to get a gym membership; £40 a month. Go to the cinema once a week; £38 a month. Go on the odd night out with her friends every couple of week; £80 a month. (That’s without mentioning clothes, etc etc). All of that would be out of reach for Cecilia, who would be earning just enough to scrape by.
Now, I’m no personal finances expert. There’s one or two bits of this calculation that may be a little off, but even if it is £200 one way or another, we are still talking about a cost of living crisis here, and our example of Cecilia is someone who is able to find work, and doesn’t have student loans or any other debts to pay. (Of course, this example is illustrative, not typical: there will be very few real world Cecilia’s who will get a one-bedroom flat in the Georgie. But the fact it is out of reach is in itself an indictment.)
Look at these costs and ask yourself: what could the Scottish Government do to ease the pressure on young people? It has implemented free bus travel for under-19s, which should be extended at least to under-25s. But as this example suggests, as a % of total household costs it is not huge (under 10 per cent). The Scottish Government has no power over the LHA rate, no direct controls over the cost of utilities and food, no control of the minimum wage. The big thing that jumps out is the cost of housing, both in terms of the rental cost and the council tax cost, which Holyrood has full control over. There is no good reason why Cecilia should be paying over half of her income on rent and council tax.
Rent controls is a must, not just for Cecilia and others in her situation, but also for the local economy around her. If Cecilia’s rent costs are reduced significantly, she will use what she has left to go to the cinema, get a gym pass, go out with friends, etc. The same is not true for the generally high-income private landlord. Significant sums of cash can be freed up in the Scottish economy this way. It shouldn’t need saying, but the costs of maintaining a one-bed flat in Gorgie are not close to being £725 per month.
Then there’s the inequity of the Council Tax. As a renter, Cecilia’s shouldn’t have to pay, the landlord should. It makes complete sense to levy property taxes on those who benefit from rising property values. That’s £1,389.66 per year redistributed right there, from landlords to local services. Beyond making that one simple change, the Scottish Government could replace the Council Tax altogether so that it is fair and equitable. Just getting the rentiers off Cecilia’s back would be a good start.
Working class young people have been let down by the Scottish Government this week. In the wider context of this economic crisis, they face a difficult start to adulthood whether they go to university or not. And it makes a huge difference that those in the bottom 20 per cent most deprived households have zero or negative wealth, despite the median household wealth in Scotland being £186,500. A young person who only has to live on what they themselves can earn in a jobs market like this one faces an uphill challenge just to get by. But there are significant things the Scottish Government can do to ease the pressure, and thus they should. That requires an approach to economic recovery that actually accounts for structural disadvantages, wealth inequality being one of the most important. The lessons from the SQA debacle for the Scottish Government go well beyond education, but will they learn them? It’s the least the Cecilia’s deserve.
Source Direct is a free morning newsletter providing you with all the latest Scottish news in your inbox each morning, including:
- Analysis of the key stories
- A summary of what’s in the Scottish papers
- The latest on Source
- Interesting opinion pieces from around Scottish media
To sign-up for Source Direct, click here.