In the last three days, more than 14,000 job losses have been announced. This figure will be out-of-date the moment I type it, with more big employers making mass redundancies every day. Unemployment is a scourge. It goes hand in hand with debt, poverty, ill health and homelessness. Its effects last a lifetime. And, as in any recession, the hardest hit will be young workers just starting out in their careers. As we exit lockdown, for the first time in a generation, young people are finishing school and college – and going straight onto the dole.
The impact of being out of work when you’re young has lifelong consequences – so-called ‘scarring’. More than six months’ unemployment early on holds down workers’ earnings throughout their lives. By their 40s, those who experienced youth unemployment earn up to 21% less. And even 35 years later, those who were unemployed when they were young are unhappier. This scarring affects all groups, not just those from poorer backgrounds or with lower skills levels. And the negative effects remain even after discounting lower qualification levels, family background, gender, disability and living in areas of high unemployment.
Joining the labour market in a pandemic is a piece of random bad luck – but one that could do massive harm to the life chances of young people. Without decisive action from government, they will see their hopes and dreams unfulfilled and their ambitions unrealised because the UK cannot use their skills and talents. It’s been decades since the UK experienced mass unemployment. But previous recessions have shown all too clearly the consequences of leaving young people without any support beyond a threadbare safety net.
As we come out of lockdown, the immediate future looks like millions of people desperate to work chasing a tiny number of vacancies. Which is why I will never apologise for putting jobs at the heart of the trade union movement’s plans for recovery. And why it is galling to read the government’s plans on youth unemployment. At the summer statement, alongside some crumbs on apprenticeship funding, the Chancellor will announce a £1,000 bounty for every employer who takes on a young person for a traineeship. Each traineeship will last six months, and trainees will get help with English, maths and CV writing alongside work experience.
But these roles will be unpaid. It is not clear what the government expects the trainees to live on, or how to pay their rent. And because traineeships aren’t a job, they don’t give young people the on-the-job experience that employers want. The government may laud the record of traineeships in helping young people get into employment or further study, yet it conveniently glosses over the plunge into a deep recession of the last few months. Trainees who complete one of these traineeships are unlikely to find the labour market a welcoming place. When they finish, they will head straight back onto the unemployment rolls. Nor does the government account for unscrupulous employers, who will no doubt see the trainees as a source of free labour – and may even let existing workers go in favour of trainees. We saw this with unpaid work trials mandated by Jobcentre Plus. Now we’re seeing the reheated version in the middle of a recession.
Instead of a traineeship scheme that will leave young people no better off, the government should set up a jobs guarantee scheme. This should offer every young person out of work for three months the chance of a real job, on at least the real Living Wage. These jobs should be with real employers, with a meaningful subsidy to make it worthwhile. They should be doing things that are useful for the country – like helping us become greener.
A job guarantee scheme will give young people real experience of the world of work that they can show employers. It will give them an income that they have earned. And it will stop them experiencing the personal disaster of early unemployment, as well as stopping the UK-wide social disaster of mass unemployment. This is how we avoid a repeat of the 1980s. We don’t need another failed Youth Training Scheme, which is only useful for taking people out of the unemployment stats. Instead, the Chancellor should use the power of the state to create real jobs on real wages with real employers. A new offer of a guaranteed job for every young person facing long-term unemployment, paid at a real living wage, must be the cornerstone of any plan to save jobs.