Young people and black graduates most likely to be unemployed because of Covid, report finds

Youth unemployment an ‘urgent problem’ as it can permanently affect long-term earnings, experts warn

Young people have seen the worst rise in unemployment during the pandemic, according to new research, with young black workers nearly twice as likely as others of the same age to be unemployed.

A report from the Resolution Foundation found that between the second and third quarters of 2020 the unemployment rate among 18 to 24-year-olds jumped from 11.5 per cent to 13.6 per cent – an 18 per cent increase for this age group and the highest quarterly rise since 1992.

The rise was even greater among black graduates, who saw unemployment increase to 34 per cent, up from 22 per cent before the pandemic. In comparison, the unemployment rate was 25 per cent among Asian graduates and just 12 per cent among white graduates.

The report said the disproportionate impact of coronavirus on young people was likely because they were overrepresented in the sectors hardest hit by the crisis, including hospitality and leisure.

Kathleen Henehan, senior research and policy analyst at the Resolution Foundation, said that while the furlough scheme had done “a fantastic job of minimising job losses”, the pandemic had still created a “highly generationally unequal unemployment surge, and widened pre-existing gaps between different ethnic groups”.

“Young people have sacrificed their livelihoods in order to save the lives of others from Covid-19, and putting their careers back on track must be a priority for government in the months and years ahead,” she said.

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The think tank called on the government to expand and extend its Kickstart scheme for young people, and to ensure those from hard-hit ethnic backgrounds have access to the scheme, alongside quality education and training options as well as financial support for full-time study.

Commenting on the news, Sarah Arnold, senior economist at the New Economics Foundation, pointed out that young people and minority ethnic workers were disproportionately more likely to be in less secure employment before the pandemic, such as zero-hours or fixed-term contracts, or cash-in-hand jobs. 

“These kinds of jobs are less likely to have been protected by furlough,” she said. “This is an urgent problem – significant periods of economic inactivity for young people can create what economists refer to as ‘economic scarring’, which can permanently affect long-term employment prospects and earnings.”

One solution, Arnold said, was to put job support and creation schemes in place to help people find high-quality, secure jobs, and income support to help those who can’t find employment.

“There won’t necessarily be jobs for everyone to go back to, and of course young people will be the last to be vaccinated, and can still spread the virus. And if the jobs available require a different set of skills, people need to be able to eat and live somewhere while they reskill,” she added.

Frances O'Grady, general secretary of the TUC, said some young people were “facing additional obstacles because of their race” and “that’s wrong”.

“Ministers must stop delaying and challenge the racism and inequality that holds back BME people from such an early age, and start creating good new jobs so that all of our young people have a fulfilling future to look forward to,” she said.

Stephen Evans, chief executive of the Learning and Work Institute, said so far the government had introduced lots of welcome measures, but warned they risk being disjointed. 

“With 500,000 young people due to leave full-time education this summer, it’s urgent we introduce a youth guarantee so all young people are offered a job, training place or apprenticeship,” he said.