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Young people hit hardest as UK unemployment reaches two-year high

Experts are warning the UK's labour market crisis could get drastically worse when the Government's Job Retention Scheme ends next month
EPA/Andy Rain

People aged between 16 and 24 are bearing the brunt of the UK’s employment crisis as Covid-19 continues to drive a shrinking labour market.

The country’s unemployment rate hit a two-year high in the three months to July, new Office for National Statistics figures show, reaching 4.1 per cent.

It makes the loss of the Job Retention Scheme – set to wind down next month – a looming crisis that The Big Issue is fighting through the Ride Out Recession Alliance, bringing together the most innovative ideas and experts to help keep people in work and in their homes during the recession.

In August, the number of people on payrolls in the UK was down roughly 695,000 compared to March this year – but despite rising redundancies, employment and economic activity are up.

However younger people have seen the biggest drop in employment, with 156,000 fewer 16-24-year-olds in jobs in July compared to when lockdown was implemented in Britain.

Hargreaves Lansdown analyst Susannah Streeter said: “Generation Z has been hit particularly hard by the economic fall out of the pandemic as the retail and hospitality sectors, which have taken such a battering, are often relied on to help school and university leavers find an entry-level job, and get started in the world of work.

“Sadly, this may not just be a bump in the road but could have long term consequences for the path of their careers.

“In reality, the underlying picture of unemployment is likely to be even bleaker as it’s clear that the government’s furlough scheme has been masking the devastation wreaked by the pandemic on jobs and the wider economy. There is no surprise that calls for its extension are coming thick and fast, but the government reckons its £2 billion kick start scheme, offering subsidised jobs to 16-24 years olds will instead boost the prospects for this age group.

“But there is a risk that companies could be subsidised for hiring candidates for jobs they were always planning to create – without being significant enough to make up for the mass redundancies likely when the furlough scheme expires at the end of October.”

The Government’s new Kickstart scheme aims to help young people into work by paying £1,500 to employers for each 16-24-year-old they take on.

Chancellor Rishi Sunak said supporting young people back into work was his “number one priority”, but despite the risk of redundancy for hundreds of thousands nationwide he has not budged on the decision to end the furlough scheme on October 31. More than 9.6 million people have been kept on company payrolls during the pandemic through the scheme.

Earlier this month, figures obtained by the BBC showed that UK firms planned 300,000 redundancies in June and July with 1,784 companies looking to slash 150,000 jobs in July.

This followed on from 1,888 employers eyeing up 156,000 jobs to be made redundant in June as people were forced to stay home in lockdown, battering the high street and hospitality and retail industries.

And last month the Olivier De Schutter, the UN’s independent expert on extreme poverty, blasted global government attempts to support people on low incomes during the pandemic as “full of holes”.

The Big Issue is committed to helping protect jobs, working alongside RORA partners Shelter, Nationwide Foundation, Unilever and many more to come up with plans to keep people in work. We need your ideas too. Tell us your experiences, ideas and plans at

Image: EPA/Andy Rain