If this was a normal year, school, college and university students across the country would be in the middle of their exams. By the end of June, their exams would be done and those who didn’t have a job lined up already would be looking for one. Some of the better off ones might take a holiday over the summer, but, by September, around 800,000 young people would have joined the workforce.
But lockdown is creating an unprecedented crisis in the jobs’ market. The latest figures put unemployment levels at 2.1 million. In addition, we now have 7.5 million workers who have been furloughed, with many likely to end up being made redundant just as this year’s school, college and university leavers hit the labour market. For young people, this is terrible news. It means that they will be competing for jobs with a growing number of more experienced workers.
Just as the supply of labour is swelling, we are also seeing demand dropping off. The number of both existing and new jobs has been falling rapidly, with data from the Resolution Foundation suggesting that job vacancies have fallen by 50%. Specific data looking at the situation for young people is just as worrying with research from the Institute of Student Employers suggesting that employers are going to recruit 23% less young people than they were planning to at the start of the year.
Given this perfect storm in the youth labour market, we will see youth unemployment levels, which were around 12% before the crisis, starting to climb very rapidly.
Covid-19 has impacted on everyone’s life, but, as Emily Maitlis recently pointed out, that does not mean that it will affect everyone in the same way. There is already evidence showing that young people are amongst the hardest hit. As a new cohort leave education over the summer they are likely to experience some of the worst economic impacts of any part of the population.
Being able to find work is an essential part of young people’s transition to adulthood. Without it, it is difficult to build an independent life, leave home, get married and do all of the other things that young people want to do. We are running the risk of a whole generation “failing to launch”
The consequences of failing to get a job when you leave education are not just short term. If young people don’t make a smooth transition to work, they can get trapped in joblessness and low-paid work. This time next year they will also be competing with a new generation of students, making the labour market even more competitive for them. In the long run, leaving education in the middle of a recession and failing to find good quality work quickly can have a ‘scarring’ effect that can influence your lifetime earnings and career prospects.
The gloomy picture that I’ve painted is not inevitable. Despite the difficult conditions there will still be jobs. Students should remain resilient, avoid the tendency to blame themselves for things that are not their fault and think about how they can make the most of the time that they have.
But, it is important to be clear that the youth labour market crisis can’t be solved by students trying harder or developing their employability skills. This is a structural problem and it needs a structural solution.
Government is inevitably focused on the health crisis. But we are already in the middle of an unfolding employment crisis. There is a need to establish an employment taskforce that has the authority to address the massive rise in unemployment and a key part of this needs to be an immediate focus on young people.
Actions that government could take to support young people and avert the collapse of the youth labour market might include:
increasing access to career guidance and employment support;
providing bursaries to encourage more people to continue to develop their skills in education, whilst ensuring that there is a strong dialogue between education and employers so that work-relevant skills are developed;
offering incentives to employers to take on more school, college and university leavers;
creating public sector internships to allow the government to access the talents of young people, whilst offering good quality employment opportunities; and
ensuring that young people are not locked out of the benefit system.
If the government is willing to take this kind of action, a crisis can be averted, or at least ameliorated. If, this opportunity is missed, we run the risk of abandoning a generation of talented young people.
Tristram Hooley is a researcher specialising in career education and the labour market.