Young people worst hit by impact of Covid-19 on jobs market, ONS reveals

Some 76,000 more young people were unemployed in the three months to the end of July than in the same time period as last year, latest figures from the Office for National Statistics show.

In total 560,000 young people aged 16 to 24, were out of work during those three months, the Labour Market Overview for September 2020 states.

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Employment rates for 18- to 24-year-olds saw the biggest decrease in any quarter on record, with a drop of 146,000 compared with the previous three months, figures show.

Meanwhile, young people aged 16 to 24 years saw employment rates decrease by 156,000 to 3.63 million compared with the previous quarter.

“Figures for May to July 2020 show an increase in the unemployment rate; despite this increase and an increase in the number of redundancies, the employment rate was up and the economic inactivity rate has fallen,"the ONS states.

“Over the quarter, there has been a large decrease in the number of young people in employment, while unemployment for young people has increased.”

The number of unemployed young people alone exceeds the number of new job vacancies recorded between June and August when 434,000 positions were advertised, the report shows.

The figures come despite the launch of Chancellor Rishi Sunak’s £2bn Kickstart jobs scheme earlier this month.

The scheme gives employers the opportunity to offer young people on Universal Credit state-subsidised work placements and offers businesses £1,500 to set up support and training for those on the scheme.

Sam Windett, chair of the Youth Employment Group and director of policy at charity Impetus, said: "The huge fall in employment for 16-24 year olds is the latest sign of the jobs crisis facing young people. Young people are 2.5 times more likely to be employed in the ‘shut down’ sectors and, when they do fall out of work and education, 75 per cent are likely to remain disengaged for the long term – which means we must act fast.

“Initiatives announced by the Chancellor, like the Kickstart scheme, aren't yet up and running and more are needed. The longer young people are out of the labour market, the more likely they are to experience future challenges. Today's statistics show that further, bold measures are needed in the budget and spending review to tackle youth unemployment."

A separate report by the Social Mobility Commission reveals that young people growing up in England’s most disadvantaged areas “face being locked into disadvantage for generations”.

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What has been described as “the most detailed study of regional social mobility ever conducted in the UK”, states that children entitled to free school meals who are growing up in the worst areas for social mobility “have little chance of making a better life for themselves or their children”.

“They also earn much less than their more affluent peers,” it adds.

At the age of 28, they are likely to earn just over half the amount of those from similar backgrounds in the most mobile areas.

In areas with high social mobility, disadvantaged young adults earn twice as much as those with similar backgrounds in areas with low social mobility – on average, over £20,000 compared with under £10,000.

Pay gaps between the most and least deprived individuals in local authorities with the poorest social mobility are 2.5 times higher than in areas of high social mobility, the report finds.

The most disadvantaged areas include Hull, Fenland, Mansfield, Walsall, Gateshead, Kirklees, St Helens, Dudley, Bolton and Wigan.

The report adds that while access to good quality education is a factor contributing to such pay gaps, 33 per cent of the pay gap between the highest and lowest earners is down to non-education factors, like local labour markets and family background.

The Social Mobility Commission is calling on local authorities to draw up new programmes to improve social mobility in the worst affected areas.

It will also ask the government to extend its current Opportunity Areas programme – which gives support to 12 councils - to include several more authorities identified as being the most disadvantaged.

“These findings are very challenging,” said Steven Cooper, interim co-chair of the commission. 

“They tell a story of deep unfairness, determined by where you grow up. It is not a story of North versus South or urban versus rural; this is a story of local areas side by side with vastly different outcomes for the disadvantaged young people growing up there.”