Young people have been among the hardest hit by the economic impact of the coronavirus, accounting for half of the falls in employment, a new report says. That is despite this age group accounting for only 12 per cent of total employment.
According to the report, published by the Learning and Work Institute this morning, the coronavirus pandemic worsened inequalities in work and incomes, hitting groups including young people, single parents and people from black and/or minority ethnic (BAME) backgrounds hardest.
The report, which marks one year of the UK living through the Covid pandemic, said the number of people claiming unemployment-related benefits rose three times faster in areas with the highest pre-crisis unemployment than in lower-unemployment areas – threatening the government's "levelling up" agenda.
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Areas that have higher BAME populations saw claimant rates rise more than three times faster than those that do not, and two times the national average.
Single parents and low paid workers were among those who had faced falls in their incomes and so face challenges to get by, too. The Learning and Work Institute says that, overall, unemployment was expected to be almost 1 million higher by late 2021 compared with before the pandemic. A further 2.5 million people could have lost their jobs without the furlough scheme preventing employment dropping in line with economic output.
Nonetheless, long-term unemployment, particularly damaging to people’s future job and earnings prospects, was already up by 25 per cent in the past year and likely to rise sharply during 2021, says today's report. It adds that the government needs to focus on recovery from the impacts of the pandemic and building a better and more inclusive economy for the future, not simply a return to "business as usual".
Stephen Evans, chief executive of Learning and Work Institute, said: “Unemployment has increased significantly during the pandemic despite support like the furlough scheme limiting the damage, with groups such as young people disproportionately affected. We need to avoid this damage affecting us for years to come.
Covid job losses: Young people 'disproportionately affected'
“As the economy reopens, the government should introduce a youth guarantee so all young people are in education or work, make the Universal Credit uplift permanent, and harness the potential of green growth. Our aim should be recovery from the pandemic and building the economy and society we want.”
The report identifies five priorities for the government as the economy reopens.
Recommended priorities for the government
- Bring back furlough and other support if a resurgence in the virus means further restrictions are required.
- Introduce a youth guarantee of a job, apprenticeship or training offer for all young people. This should include the 500,000 16- to 18-year-olds leaving full-time education in summer 2021, as well as those already out of work.
- Make the £20 per week Universal Credit uplift permanent. Ending this in September would mean cutting the incomes of the poorest 10 per cent of households by 5 per cent.
- Use expanded employment support, like new work coaches and the restart scheme, to help those who were out of work before the pandemic, rather than cutting this back to save money if unemployment peaks lower than previously expected.
- Renew the focus on good work and progression, so people have jobs that give them security and opportunities to get on. That includes harnessing the potential of the transition to a net-zero economy to create green jobs.