Covid-19’s impact on youth unemployment could cost the UK economy almost £7bn as the Learning and Work Institute insists youngsters will be missing from the post-pandemic recovery, says the Learning and Work Institute.
Young workers have seen jobs disappear in the retail and hospitality industries during the pandemic and the lost output could set the national output back £6.9 billion in 2022.
The think tank’s report, produced with The Prince’s Trust, found lower tax revenue and higher benefit spending could see the fiscal cost of youth unemployment hit £2.9bn.
While Boris Johnson’s roadmap out of lockdown is set to pave the way for economic recovery, retail could struggle to recover to pre-pandemic levels with names like Dorothy Perkins, Topshop and Thorntons disappearing from the high street for good.
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The resulting damage to employment prospects is forecast to hit the economy to the tune of £14.4bn in next seven years.
Stephen Evans, chief executive of the Learning and Work Institute, said: “Young people have been at the 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.”
The think tank’s forecast found youth unemployment is set to climb in the coming months. Under-25s already accounted for three in every five jobs lost in the last year.
Young people tend to be over-represented in the sectors that are predicted to see lower employment in the long term and under-represented in occupations which are likely to see the strongest job growth.
That’s why Evans has called for young people to be given the offer of work, education or training as a guarantee.
Evans added: “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.”
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
While the pandemic has hit youngsters hard, the report also warned pre-existing inequalities have been exacerbated by the crisis.
A survey of 2,092 young people aged 16-24 showed that the decline in working hours for young people with no qualifications has been five times higher than the decline for those with a degree level qualification.
Meanwhile, half of the black young people quizzed have seen a decline in hours worked – three times higher than for white young people.
“This report is a stark warning of how the current economic crisis will have a scarring effect on young people, their earnings and prospects,” said Jonathan Townsend, The Prince’s Trust’s UK chief executive.
“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.”
Chancellor Rishi Sunak has focused on his Kickstart Scheme to help young people back into work.
According to Department for Work and Pensions figures, almost 150,000 Kickstart roles have been approved across the country to offer a lifeline to 16 to 24 year olds on Universal Credit at risk of long-term unemployment.
Work and Pensions Secretary Thérèse Coffey told The Big Issue: “Surging sectors like tech are bringing fresh opportunity and hope for our young jobseekers.
“Through the Kickstart Scheme, apprenticeships and traineeships, these companies are helping bring our Plan for Jobs to life, boosting the long-term job prospects of a generation that is capable of so much as we build back better.”
But both the Learning and Work Institute and The Prince’s Trust have called for the scheme to be extended until the end of 2022 at a cost of £1.3bn.
The Big Issue is working on tackling unemployment too. The Ride Out Recession Alliance is bringing together campaigners, charities and businesses together to come up with solutions to the Covid-driven jobs crisis.
Since launching last summer, the alliance has created a jobs board with thousands of roles, a toolkit offering tips and advice and a jobs helpline to help people get the opportunities and skills they need to get into work.