Young people bearing the brunt of unemployment, ONS figures show

Experts warn the UK risks ‘sleepwalking into a labour supply crisis’ without more intervention to boost skills

Young people continue to be among those worst affected by unemployment following the economic fallout from the pandemic, official figures have shown.

Data from the Office for National Statistics showed that in the 12 months to March 2021, 813,000 payrolled jobs were lost, of which 54 per cent were held by people under 25.

Unemployment across the UK also grew by almost one percentage point from January to March this year compared to the same time last year, with the largest falls in payrolled employment also seen in the hospitality sector and among those living in London.

The number of job vacancies in this time period also fell by nearly 23 per cent compared to the same time the previous year, with arts, entertainment and recreation, and accommodation and food service activities the worst affected.

Gerwyn Davies, senior policy adviser at the CIPD, said the figures showed the number of young people in employment had “fallen to a post-pandemic low”, reinforcing the case for apprenticeship incentives targeted at younger people to be made more generous and underlining the need for increased awareness of the Kickstart scheme among employers.

“The hope is that the increase in economic activity in the worst affected sectors will generate enough jobs over the coming months to offset the impending closure of the government’s furlough scheme. However, without intervention on skills and against the backdrop of new migration restrictions, the UK economy is at risk of sleepwalking into a labour supply crisis,” Davies warned.

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Nye Cominetti, senior economist at the Resolution Foundation, said the data suggests that April “is starting to thaw at last”. But, he warned that unless the employment gap was closed before the furlough scheme comes to an end in September, the UK could still see a rise in unemployment later this year that will “extinguish many people’s hopes of a post-Covid living standards recovery”.

“Young people in particular have suffered due to the rise in unemployment so far, with recent Resolution Foundation research showing that education leavers and young black people have been especially severely impacted,” said Cominetti. “Helping them get their careers back on track should be a core priority for the government across the next year and beyond.”

Tony Wilson, director of the Institute for Employment Studies, said the rate of youth long-term unemployment, which hit a five-year high, and the fact that youth employment was still falling despite it rising for every other age group, reflected the cumulative impact of three lockdowns. “If we don’t act quickly, in particular by focusing our support on the long-term unemployed, then we are risking another lost generation,” he said.

Stephen Evans, chief executive of the Learning and Work Institute, added that while unemployment could have been much higher without the furlough scheme – potentially to the tune of 2.5 million more people out of work – the pandemic had still worsened existing inequalities. 

“The labour market has taken up to seven years to recover after previous recessions and youth long-term unemployment is already 50 per cent higher than last year,” Evans warned. “We need a multi-year focus on jobs and skills recovery, including a Youth Guarantee for the 500,000 young people set to leave full-time education this summer.”