We must act now to shield young people from the economic scarring of Covid-19 | David Blanchflower and David Bell

Recessions blight young people’s prospects for decades. We need New Deal-type policies now to help them

Youth unemployment and its scarring effects on the careers of young people were a major concern in the 2008-09 recession. Now that hopes for a “V-shaped recovery” from the Covid-19 pandemic are vanishing, the issue of scarring is again relevant.

Past research has shown that those who enter the labour market during a downturn carry the costs of doing so into middle age. These come in the form of lower wages and higher risk of unemployment. Whereas the work and pensions secretary, Thérèse Coffey, may claim it is “too early to set anything like that at all” (BBC Today Programme 19 May), the evidence is clear: recessions do lasting damage to young people.

There were 699,000 individuals aged 16 to 24 who were not in employment, education or training (NEET) in the fourth quarter of 2019. This accounted for 12.7% of this age group. Even though UK employment grew by 3.6 million between 2012 and 2019, the number of NEETs fell by only 400,000. Like many other youth issues, the problems of NEETS have dropped off the political radar. And we know the labour market will get much tougher for this group. In April, 141,640 of those aged 16 to 24 started claims for unemployment benefit (jobseeker’s allowance). And this number will only increase as the furlough scheme unwinds. More and more young people will be competing for fewer jobs.

Millennials have had a bad time since the 2008 crash. Unattainable housing, job precarity, tuition fees and Brexit all played against their interests. Yet, the grievances of the young have largely been ignored by the political class. The privileges of the old, such as the triple lock on pensions, have never come under serious threat. Unlike previous generations, the young have been unwilling to take to the streets to galvanise political change.

Yet, they have enthusiastically embraced individual causes. Top of their list has been climate change. Pressure from young voters (and from those not yet able to vote) contributed to the UK, Welsh and Scottish governments each declaring a climate emergency in 2019. The young are concerned about the future of the planet: they will have to deal with the consequences of global warming.

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This recession will likely be as deep as the Great Depression of the 1930s. In the US, where the unemployment rate hit 24.9% in 1933, President Roosevelt’s “New Deal” was a mainstay of recovery. Policies to help the young were central. Taking some lessons from that history might help the UK maintain its stocks of human and social capital, those essential building blocks of a productive economy, which were cruelly dissipated in past recessions, particularly those of the 1980s.

Roosevelt’s favourite New Deal policy was the Civilian Conservation Corps (CCC). It hired young, unmarried men to work on conservation and development of natural resources in rural areas. During its nine years of operation, 3 million young men, mainly aged 18 to 25, passed through the CCC. Most of the jobs were manual. It was credited with improving the employability, wellbeing and fitness of participants.

Introducing a UK version of the CCC focused on mitigating climate change risks and aimed at those aged 16 to 24 could avoid the creation of yet another “lost generation”, scarred by long spells of unemployment. It would build on the enthusiasm of the young to save the planet. There is no shortage of issues to address – flood risks, tree planting, domestic heating conversion, renewable energy, restoring biodiversity etc. Funding would come partly from expanded allocations to the relevant departments in the forthcoming Comprehensive Spending Review. Organisation could build on the successes of public/private sector and community initiatives during the pandemic. No brainer?

Contributors

David Blanchflower and David Bell

The GuardianTramp

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