You are here: Home - Household Bills - News -

Youth jobs crisis set to cost UK economy £7bn

0
Written by: Emma Lunn
30/03/2021
Youth unemployment will remain high even once the economy recovers, according to The Prince’s Trust.

A report by the charity, produced in conjunction with the Learning and Work Institute and HSBC, warns that young people will increasingly bear the brunt of the unemployment crisis, at a growing cost to the UK economy.

The study found that while some areas of the economy might begin on the road to recovery, young workers are under-represented in these sectors, while the industries that typically employ young people will be hardest hit in the long term.

The report found that the outlook for young people’s employment is worse compared to the outlook for older workers.

In addition to being over-represented in the sectors hit hardest by the pandemic to date, young people tend to be over-represented in the sectors that are forecast to see lower employment in the long term and under-represented in occupations which are likely to see the strongest job growth.

This suggests that, in addition to the greater risk of unemployment for young people during the pandemic, the longer-term structural changes in the labour market are likely to reduce future employment opportunities for young people without support to improve skills for the jobs available.

The report calculated the financial hit to the economy of higher youth unemployment due to the pandemic. It found that the economic cost of higher youth unemployment in terms of lost national output is forecast to be £5.9bn in 2021, rising to £6.9bn in 2022.

The fiscal cost of higher youth unemployment, in the form of lower tax revenue and higher benefit spending, is forecast to be £2.5bn in 2021, rising to £2.9bn in 2022.

The report also found disparities in the impact of the crisis on different groups of young people, raising concerns that the pandemic has, and will continue to, exacerbate pre-existing inequalities.

Analysis shows that the decline in working hours for young people with no qualifications (34%) has been five times higher than the decline for those with a degree level qualification (7%).

Demand for employees with lower-level qualifications is projected to fall in the short, medium and long-term, raising concerns that the employment prospects of young people who lack higher level qualifications will be further negatively affected.

Stephen Evans, chief executive of Learning and Work Institute, said: “Young people have been at forefront of the coronavirus jobs crisis. While we are hopefully slowly emerging from the worst of the pandemic, the legacy will be with us for years to come in the form of higher youth unemployment.

“This is not just bad for young people. It will have a huge hit on our economy and our public finances, and it risks a long-lasting scarring impact on those affected.”

Jonathan Townsend, UK chief executive of The Prince’s Trust, said: “This report is a stark warning of how the current economic crisis will have a scarring effect on young people, their earnings and prospects.

“We also know from 45 years’ experience of working with young people that youth joblessness can impact self-esteem and mental health for years to come, if we fail to act.

“Government, employers and charities must work together to ensure that the young people who need the most support are not forgotten. They need the opportunities to upskill, retrain and access job opportunities, or we risk harming not only our young people’s futures but the recovery of our economy.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
How ‘green’ is your green energy tariff?

Uswitch has launched an accreditation scheme for green tariffs to help consumers understand the different approaches suppliers take on renewable...

Close