The Job Gym

Youth unemployment could reach 1 million by the end of the year

03 July 2020

Coronavirus could lead to an additional 620,000 young people out of work

A study released by the IPPR has estimated an additional 620,000 young people (18-24) could be out of work by the end of the year, adding to the 400,000 across the country who are currently registered unemployed.

The Coronavirus is first and foremost a global health crisis, but the downturn on the economy is having a huge impact on people's livelihoods by the day. If these figures are reached by the end of the year, then this will be the largest number of young people on record, registered as unemployed, surpassing those figures of the 2008 economic crisis. 

 

Harry Quilter-Pinner (senior research fellow at IPPR) said:

"We face an unemployment crisis in the UK. Our analysis suggests youth unemployment could more than double by the end of the year. This would be a huge waste of talent and potential. It doesn't have to be like this." 

The Covid generation 

The term "Covid generation" is already being used to refer to young people who are affected by the economic downturn from the coronavirus pandemic. This is causing alarming signals for the government, as high levels of youth unemployment will be damaging for the nation's young people, their careers, and the economy for decades to come. Long-term levels of youth unemployment are damaging to the labour market, which would result in a shortage of talent and people's earning potential. 

Those from socially deprived backgrounds with the fewest qualification are likely to be the worst affected; the report outlines a 3 step process on how the government should implement strategies to deliver an "opportunity guarantee". 

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Image taken from FE weekly press release dated 30th June 2020

The PM promise 

On Tuesday this week, the prime minister promised that "every young person will have the chance of an apprenticeship or an in-work placement" but details of how this will unfold are not yet known. 

In response to the announcement Mark Dawe, Cheif Executive of the Association of Employment and Learning Providers said:

“The fact that the prime minister sees work placements as a key part of a new opportunity guarantee for young people is an important step forward and we recently submitted at the government’s request what has been holding back the highly effective traineeship programme from taking off."

Traineeships and study programmes are two government-funded initiatives that could rise to meet the prime minister's promise. Traineeships provide a platform for a young person to gain industry training and complete a work placement to progress on to an apprenticeship or full-time employment. Mantra Learning has been providing young people with a pathway on to an apprenticeship in motor vehicle and logistics through the Traineeship model since 2014, giving hundreds of young people the support to transition from education to employment. The Traineeship model at Mantra Learning involves a talent matching process and the requirement for a learner to complete a series of weeks training prior to a work placement, which involves assessments of their employability skills whilst gaining qualifications. 

Employer support

An apprenticeship guarantee will only be possible if there is support in place for employers. With businesses fighting to keep their head above the water in recovering from the pandemic lockdown, recruiting an apprentice may just be the last thing on their mind. Chancellor Rishi Sunak is set to announce financial support for employers next week, which is believed to be a £3,000 handout for taking on an apprentice under the age of 25.

Mark Dawes responded on behalf of the AELP responded to this by saying: 

"£3,000 employer incentive is not going to cut it. To meet a 50 percent wage subsidy, the subsidy for a young apprentice in their first year should be around £4,000 and up to £7,500 in the second year depending on their age." 

 

The government has got to get this right. Providing employers with the right support to be able to recruit and provide young people with employment opportunities is fundamental to recovering from the pandemic and future-proofing the prospects for generations to come.  

 

Full details of the IPPR report can be found here. Guaranteeing the right start: Preventing youth unemployment after Covid-19

 

 

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