But new analysis of the labour market from the TUC shows that the problems are getting worse. Since January 2020, the number of payrolled employees aged under 25 has fallen by 450,000. This amounts to 65% of all losses in this period, and rises to 91% if we include 25-34 year olds.
Yet these high numbers don’t tell the full story. Whilst younger workers are being hit hard, young BME people are experiencing an even bigger hit.
For young white workers, the unemployment rate has increased from 10.1% to 12.4% over the course of 2020 – an increase of 22% of the original rate.
For young BME workers, it’s worse. Already at a higher rate than white peers, the unemployment rate has soared from 18.2% to 27.3%, a staggering 50% increase over the same period.
It’s clear that BME young people are having a more difficult time finding work, and it raises concern that it is evidence of racism in the labour market.
Most at risk
One of the key reasons behind the impact on young workers is their over-representation in industries hit hardest by the pandemic.
The accommodation and food service industry has seen the most job losses throughout the pandemic, with 370,000 jobs (18%) lost. Going into the pandemic (Jan-March 2020), 15 per cent of workers aged 25 and under worked in accommodation and food, compared to just 4 per cent of those over 25.
The three industries with the highest job losses (accommodation and food, wholesale and retail, and arts and entertainment) are also the three industries with the highest percentage of young workers in their workforce.
Where young people tend to work explains why they’re more likely to be furloughed. One-fifth of all young workers are furloughed, higher than any other age group.
A need to act faster and go further
With uncertainty on furlough and a call for more support for hard-hit sectors, more help is needed to stop these problems worsening for young people.
Furlough has to continue for as long as it is needed. Winding down the scheme would cause great job losses and the government can give affected industries certainty by announcing now that furlough will be extended until the end of the year.
Whilst unemployed, young people get paid less than others who are claiming. Raising the rate of universal credit and legacy benefits to at least 80 per cent of the national living wage (£260 per week) would help young workers stay on their feet and not fall into hardship.
Creating jobs has to be a priority. The TUC has called on government to fast-track spending on projects such as broadband, green technology, transport and housing that could deliver over one million jobs by 2022. Further plans to fill and create 600,000 jobs in the public sector would help. Decisive action would be a pathway to recovery for young people.
We need to see big improvements in the government’s Kickstart scheme. With headline figures of creating 250,000 jobs, just 4,000 placements have been started. With the scheme due to end in December 2021, it is vital that government extends the scheme beyond this date, and opens it up to more young people, including 16-17 year olds and those newly-unemployed. Working with unions can help ensure these are good-quality opportunities and can target these to tackle the problems facing BME young people.
And young workers need guidance to help them find the job opportunities for them. Cuts to support for independent careers advice means young people have fewer places to get the advice they need. Investing in dedicated careers advice would help fill the skills shortages in the economy.
Whilst the challenge is significant, decisive action from government will help to stop the mass unemployment of young people and prevent a left behind generation.
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