COVID-19, Youth Employment and an Opportunity Guarantee

Preparing for what we already knew

We knew young people would bear the economic burden of COVID-19, as they have in every recession, and we are beginning to see this in the data. Recent statistics show that twice as many young people are now claiming unemployment benefits than in March, with 13% of the youth labour force now claiming.

This summer, a further 500,000 young people will leave education and try to enter the labour market. Graduates entering the labour market will face projected employment rates 13% lower in three years’ time than they would have been had the crisis never happened.

And the statistics hide the full impact. We know approximately only half of young unemployed people claim benefits for varying reasons of age, eligibility and stigma. The Institute for Employment Studies estimates that the official measure of youth unemployment could reach 25% in the coming months. That’s one million young people, a rate higher than after the 2008 financial crisis.

The compounded scarring effect of COVID-19

For young people, a period of unemployment can have a scarring effect. The impact can be seen decades later through stunted careers and can have a mental toll on those trying to enter the labour market for the first time.

While recessions have a disproportionate impact on young people, the unique nature of the COVID-19 induced recession is expected to compound that impact.

Young people are 2.5 times as likely to work in shut-down sectors, accounting for 30% of all 18-24 year olds. This has meant that one third of 18-24 year olds – excluding students – have either lost their jobs or been furloughed. That’s double the rate of prime age adults. And 9% of non-full-time students have lost their main job since COVID-19 hit – three times higher than the average figure.

Opportunity Guarantee

The Prime Minister has announced an Opportunity Guarantee, giving every young person the chance of an apprenticeship or an in-work placement.

It’s a welcome start and, with over 200 organisations, we’re calling for an Opportunity Guarantee that includes:

  1. Promotes job creation by reducing the costs and barriers to employer hiring and investing in the jobs that we need for the future.
  2. Supports people into work by doubling the capacity in services that help people access the jobs market, with greatest support for those facing disadvantage.
  3. Secures opportunities for young people by guaranteeing that all have the choice of an education place, apprenticeship, or job.

And we know what works to deliver this – accurate identification and personalisation, engaging young people effectively, providing a trusted, consistent advisor and employer focused strategies such as wage subsidies and intermediate labour markets.

The Prime Minister is right to talk of the importance of building skills and confidence to get into work, and we need to ensure young people have the relevant routes for them to do so – including a guaranteed job, education or training place.

We are pleased the government has recognised the need to support young people into employment as we emerge from lockdown and the jobs crisis deepens. As more details are announced, we will work with government and others to build on what works, and together help to ensure that young people – especially those from disadvantaged backgrounds – are best supported during COVID-19 and its aftermath.

Samantha Windett is the Director of Policy at Impetus.

Find out more

Youth Employment Group

In response to the COVID-19 crisis, Impetus, Youth Futures Foundation, Youth Employment UK, the Institute for Employment Studies and The Prince’s Trust formed the YEG to bring together key leaders and experts around the youth employment sector to help drive the UK’s response.

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