The UK is on the brink of a surge in youth unemployment and the TUC has urged the government to introduce a job guarantee scheme to prevent long-term joblessness.
New analysis published today (Friday) by the TUC shows that young workers (aged 25 and under) face the highest risk of unemployment due to the coronavirus crisis.
The report compares unemployment risk related to the coronavirus crisis across industrial sectors while factoring in the age profile of workers in sectors with highest risk.
We need more good jobs in social care, in the green tech that our future depends on, in UK start-ups and in a revitalised manufacturing sector” – Frances O’Grady, TUC
Unsurpringly, hospitality and the arts were the two sectors that were found to be at greatest risk of losing jobs. Using the rate of furloughed workers, the proportion of businesses that had paused trading and the proportion of businesses with turnover falling by more than 50%, the study found that these two sectors far exceeded construction, which was in third place, in terms of impact.
The contrast with construction was highlighted by a separate report, by UHY Hacker Young, which found that UK construction sector employees on furlough decreased from 41% in March and April to 29% in May. About 271,000 workers returned to projects, according to the accountancy group (using government figures), with the number on furlough now at around 679,000.
The TUC analysis found that of 4,352,000 UK workers aged 25 and under, 890,000 worked in either accommodation and food, or arts, entertainment and recreation.
This meant that 20% of workers aged 25 and under worked in these two sectors, compared with 6% for workers older than 25. Workers aged 25 and under were therefore three times more likely to work in one of the two sectors where jobs are at greatest risk.
Women aged 25 and under faced the greatest risk of all, claimed the TUC. The study found they were six times more likely than male workers over 25 to work in the highest risk sector – accommodation and food.
The TUC figures are supported by a previous analysis by the Institute for Fiscal Studies shows that employees under 25 are about two and a half times as likely as other workers to work in a sector that is currently shut down.
A job guarantee scheme would prevent those without work becoming long-term unemployed, with early access to the scheme for young workers.
It would resemble the future jobs fund, which was part of the national recovery plan following the recession in 2008. A government evaluation found that, said the TUC, that two years after starting the programme, participants were 27% more likely to be in unsubsidised work.
The scheme would supports additional jobs that would not otherwise be created by employers and would enable work that benefitted the UK, such as helping to decarbonise the economy. Secure contracts under the scheme would be for at least six months and pay would be set at real living wage levels.
TUC general secretary Frances O’Grady said: “Our national recovery plan must be centred on jobs – both protecting those we have and creating more. We need more good jobs in social care, in the green tech that our future depends on, in UK start-ups and in a revitalised manufacturing sector.
“Some industries may need help for longer through the job retention scheme so they can retain staff while they adapt to new safety standards.
“And for those who lose their jobs, the government must set up a job guarantee scheme. Young people in particular can’t be left to the misery of long-term unemployment. And it’s the best value option for the treasury.”