UP to 640,000 young people are predicted to be out of work in the UK this year due to the coronavirus pandemic
A report published today by think tank The Resolution Foundation estimates that 18-24-year-olds will face years of economic “scarring” as a result of the outbreak with greater competition for jobs and lower wages for those who are employed.
According to the independent research group, people without a university degree could be a third more likely to be unemployed years after the pandemic is over, with university graduates 13% more likely to be out of work three years after finishing their degrees.
The analysis predicts that the labour market will be more difficult for young people entering it now compared to those entering it during the economic crash of 2008.
To help the thousands of young people likely to be affected, the Foundation is calling for the government to ensure apprentice schemes are boosted, and have recommended a fund to allow people to stay in education for longer, helping them to “ride out” the economic recession set to hit after the pandemic eases.
They have also suggested that special arrangements should be made to fund short courses at university and college, so it is easier for people to stay on for up to six months to boost their education and skills.
Kathleen Henehan, research and policy analyst at the think thank, said: “The 800,000 young people set to leave education this year amid an unprecedented economic crisis are facing huge immediate unemployment risks, and longer-term damage to their careers.
“The ‘corona class of 2020’ could face years of reduced pay and limited job prospects, long after the current economic storm has passed, unless the Government provides additional support – and fast.
“A new maintenance support scheme could help thousands stay in education and build-up their skills, while those entering the labour market for the first time should be supported by a Job Guarantee offering critical employment experience.”
The Foundation’s ‘Class of 2020’ report states: “The current crisis may reduce the employment chances of lower-skilled young adults leaving education by more than a third, even years down the line when the direct economic effects of the crisis will (hopefully) have abated.
“For those managing to find work, pay is expected to be depressed as well: two years on from leaving education, real hourly graduate pay is forecast to be, on average, 7 % lower.
“For leavers with mid- and lower-level qualifications, average hourly pay is forecast to be 9 and 19 per cent lower than [if] unemployment not risen, respectively.”
In comparing the coronavirus pandemic to previous economic recessions, in terms of the effects on young people leaving education, the report states “Past recessions have left cohorts of ‘crisis leavers’ with substantial scarring effect [in] both employment and pay...the depth of that scarring could be even worse this time around, given expectations for how the labour market will perform over the coming months.”
Alex Beer, welfare programme manager at the Nuffield Foundation, which funded the research, said: “The effects of the COVID-19 crisis are exacerbating existing inequalities and we are pleased to be funding this analysis which highlights risks to young people’s job prospects.
“It is important that the Government, higher education providers and employers act now to limit the long-term effects of the economic downturn, by creating opportunities for those entering work and training and supporting those who choose to stay in education.”
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