A new report released today from The Prince’s Trust and the Learning and Work Institute warns that young people will increasingly bear the brunt of the unemployment crisis, at a growing cost to the UK economy. Key findings are:
- The economic cost of youth unemployment, in terms of lost national output, is forecast to be £6.9 billion in 2022;
- The fiscal cost of youth unemployment, in terms of lower tax revenue and higher benefit spending, is forecast to be £2.9 billion in 2022;
- The long-running scarring cost to young people entering the labour market in 2021, in terms of lost earnings and damaged prospects, is forecast to be £14.4 billion over the next 7 years
The major study, supported by HSBC UK, shows how, while some areas of the economy might begin on the road to recovery, young workers are under-represented in these sectors, and the industries that typically employ young people will be hardest hit in the long term.
The report finds 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.
The report also finds the decline in hours worked for Black young people (49%) has been three times higher than for white young people (16%).
New data surveying UK employers finds two in five (41%) feel the pandemic will have a negative impact on young people’s prospects in their sector in five years’ time. A survey of young people finds one in four (26%) expect their employment prospects will still be impacted in five years’ time.
