A new report from the Learning and Work Institute and The Prince’s Trust has warned that the youth jobs crisis in the UK is set to cost the economy almost £7 billion next year.
The report, which is supported by HSBC, has warned that young people’s employment has been worst affected by the coronavirus pandemic and that youth unemployment is due to climb further still as some parts of the economy recover. During the pandemic, under 25s have accounted for three in five jobs lost and young people are over-represented in the sectors so far hit hardest by the pandemic.
The report warns that structural changes in the labour market beyond the pandemic are likely to reduce future employment opportunities for young people if support is not provided to improve skills for the jobs available. Among the findings, it is noted that the economic cost of higher youth unemployment in terms of lost national output is forecast to be £5.9 billion in 2021, rising higher to £6.9 billion in 2022.
Analysis has also shown that the coronavirus pandemic has exacerbated inequalities that already existed, including there being a much higher decline in working hours for young people with no qualifications compared to those with a degree-level qualification. Black young people have also been much more severely impacted than white young people, according to the report.
The authors of the report have called for support to be offered to job creators and those working with young people to ensure young workers are not forgotten. Discussing the report, Stephen Evans, Chief Executive of Learning and Work Institute said;
“Young people have been at forefront of the coronavirus jobs crisis. While we are hopefully slowly emerging from the worst of the pandemic, the legacy will be with us for years to come in the form of higher youth unemployment.
“This is not just bad for young people. It will have a huge hit on our economy and our public finances, and it risks a long-lasting scarring impact on those affected.
“If we are to tackle the looming youth jobs crisis, the Learning and Work Institute believes the Government must work with partners to urgently roll-out a ‘Youth Guarantee’ to support young people to access a job, an apprenticeship, education, or a high quality training opportunity.”
Jonathan Townsend, UK Chief Executive of The Prince’s Trust said;
“This report is a stark warning of how the current economic crisis will have a scarring effect on young people, their earnings and prospects. We also know from 45 years’ experience of working with young people that youth joblessness can impact self-esteem and mental health for years to come, if we fail to act.
“Government, employers and charities must work together to ensure that the young people who need the most support are not forgotten. They need the opportunities to upskill, retrain and access job opportunities, or we risk harming not only our young people’s futures but the recovery of our economy.”
Over the last year, the UK Government has set up a number of schemes to try and support young people at risk of long-term unemployment. Notably, the Kickstart Scheme has been among the policies announced by Chancellor Rishi Sunak and the Government has increased incentives for employers to take on apprentices. There has though been criticism of the Government for not doing enough to support skills development and enhance young people’s chances of securing employment.
The Government has said that it has been creating opportunities fast for young people and has already created 150,000 approved job placements through its Youth Hubs and Kickstart Scheme.
Kate Green, Labour’s Shadow Education Secretary responded to the report saying;
“Young people have been the face of the Conservatives’ failure to manage the impacts of the pandemic, with spiralling unemployment hitting under-25s hardest.
“Successive Conservative Governments have hollowed out the infrastructure needed for young people to train and gain new skills after the pandemic, with those from poorest backgrounds worst hit by declining opportunities in further education.
“The Government is failing to live up to its rhetoric on the Kickstart Scheme and apprenticeships incentive which have created just a fraction of the promised opportunities. Ministers’ should heed Labour’s call for a ‘jobs promise’ to guarantee opportunities for the young people who need them, avoiding a lost generation.”