Rise in long-term unemployment risks blighting young people’s lives, experts warn

While predictions of 5 million people out of work have proved inaccurate, some of the most disadvantaged groups are not being helped

‘Being out of work for an extended period, particularly when someone is young, is known to have effects on people’s earnings and wellbeing for many years’ (Getty)

The futures of thousands of young people risk being permanently damaged by the pandemic unless the government does more to tackle an alarming rise in long-term unemployment, experts have warned.

While a mass unemployment crisis has been averted thanks largely to the furlough scheme, the number of young people out of work for six months or more has surged to a 10-year high.

Youth workers have cautioned that placing too heavy a focus on the headline jobless rate, which has remained lower than many predicted earlier in the pandemic, means that some of the most vulnerable groups are being ignored.

Young people have been disproportionately impacted by the pandemic. More than 200,000 have now been out of work for six months or more; many lost their jobs in the early weeks of the pandemic or left education and have been unable to find employment.

Even before the pandemic one in eight people aged 16 to 24 were not in education, employment or training (Neet). Of those, more than half were classified as economically inactive, meaning they are not employed and not looking for work.

“A lot of these people are young carers, long-term sick, have disabilities or have multiple disadvantages,” said Tony Wilson, director of the Institute for Employment Studies.

“The government has done literally nothing for these people.”

Mr Wilson praised the Kickstart scheme which offers subsidies for employers who take on young people for six months of work and training.

However, it was largely helping people who have only been jobless for a short period. “The government needs to target support at the long-term unemployed who need it most,” he said.

Official figures published this week showed a slight fall in unemployment among 16-to-24-year-olds in February to April compared to the previous quarter.

Youth unemployment rose faster between spring and autumn 2020 than at any point since the financial crisis. Many of those people are now classified as long-term unemployed.

The number of young people in employment is down 274,000 from the previous year. More than half a million in this age bracket are jobless.

“There were predictions of unemployment hitting 4 or 5 million. That’s not happened so the risk is that we start thinking, ‘crisis, what crisis?’ when we do have a big problem,” said Mr Wilson.

Ministers have said they want to avoid “scarring”, the long-running hangover from a recession which can blight lives and hamper the economic recovery.

“Being out of work for an extended period, particularly when someone is young, is known to have effects on people’s earnings and wellbeing for many years,” he said

“Your skills become less relevant, confidence falls and mental health deteriorates. There’s also a powerful signalling effect that’s very hard to undo. If employers see a gap in someone’s CV and there are 100 applications, that one is going in the bin. It becomes self-fulfilling.”

He added: “You can give people talking therapy to help with mindset, motivation and resilience but you can’t change the signal that employers see.”

Mr Wilson is among experts who are calling for a jobs guarantee which would ensure anyone who has been out of work for six months is offered employment. “That would mean no one is left behind,” he said.

The government announced an “opportunity guarantee” more than a year ago but details are still yet to emerge.

Steve Haines, director of public affairs at youth charity Impetus, also praised the Kickstart scheme but urged the government to do more to tackle youth unemployment.

“The thing that really worries me is young people have lost a lot of hope,” he said. “You need to have a positive vision for your future and with everything so uncertain that is going to be pretty challenging.”

While the latest labour market statistics offered “positive signs” for the economy, he said “we mustn’t fall asleep on the watch and allow an uneven recovery”.

He added: “A deeper problem is being masked – hundreds of thousands of young people who are still on furlough face yet more time out of the labour market, many more will be leaving education and looking for work and those young people furthest from the labour market risk getting stuck out of education and employment in the long term.”

Kickstart is only just getting into its stride, he said. “It’s running to the end of the year but if we don’t have anything beyond that, that’s a problem.

“There is a risk that we are storing problems up for the future.

“What we risk seeing if we take our eye off the ball at this critical moment is that investment isn’t made and we see those young people sticking firmly outside the labour market into 2022 and beyond.”