Coronavirus: One million under-25s face unemployment, study warns

A young woman looks at her phoneImage source, Getty Images

School leavers could be worst hit by the economic impact of the coronavirus crisis, a new study has warned.

Youth unemployment in the UK could rise by 640,000 this year - taking the total above one million, a report from the Resolution Foundation think tank found.

It said school leavers were hardest hit by recessions and it called for more support to prevent "years of reduced pay and limited job prospects".

The government says it has launched a targeted campaign for job-seekers.

The report, called Class of 2020 and funded by the Nuffield Foundation, looked at how previous recessions had affected young people, and how the current lockdown measures could affect them in the future.

It said more than one in three school leavers and one in five graduates normally found their first job after education in sectors hardest hit by the lockdown, such as cafes, bars and retail.

And it warned that apprenticeship schemes could soon dry up, as companies counted the cost of the crisis.

Currently, about 408,000 people aged 18-24 are currently unemployed, latest official figures show.

The report called for a package of support to help under-25s, including:

  • New job guarantee schemes, with the government covering young people's wages
  • Schools, colleges and universities offering an extra six months of learning
  • Maintenance support and short-term loans to help people continue learning or training

There are 800,000 young people who will emerge from school or university in the next few months.

The danger that many or most of them don't find work, with all the harmful consequences that that brings - economic, social and human - is real.

The government could act fast to support young people either to stay in education - for example by funding short vocational courses - or to help them find work.

In 2009, when the threat of similarly high youth unemployment loomed, the government created the Future Jobs Fund, which paid employers a wage subsidy to take on young people.

That's better than paying benefits not to work - and studies later found participants were much more likely than others to be in unsubsidised employment.

As the Resolution Foundation points out, something similar needs to happen now, urgently, to ensure this current crisis doesn't blight hundreds of thousands of young lives.

Kathleen Henehan, research and policy analyst at the think tank, said the 800,000 young people set to leave education this year face "huge immediate unemployment risks, and longer-term damage".

She added: "The corona class of 2020 could face years of reduced pay and limited job prospects, long after the current economic storm has passed, unless the government provides additional support - and fast."

Meanwhile, in a separate report, the Association of Colleges predicted that half of this year's school and college leavers - around 100,000 16 to 25-year-olds - would struggle to find "meaningful employment" as a result of Covid-19.

It also warned there would be fewer jobs and apprenticeships for this year's school and college leavers.

In response, the government said it was "doing everything we can" to protect the economy and ensure young people have options after they leave education.

It pointed to the £20bn in aid and £330bn in loans it had offered to businesses to help them through the crisis, as well its "targeted employment campaign" and new online Skills Toolkit.