Is the government’s youth employment plan enough? – Conservative Article
It’s no secret that the current global pandemic is making it harder than ever for today’s youth to secure jobs.
With LinkedIn flooded with certificates from completed online courses, it appears job seekers are doing everything they can to boost their employability and further their skill set whilst in lockdown. Yet, for those stepping out of higher education with a very substantial pile of debt, the future seems pretty bleak. A recession is already underway, with the UK economy shrinking by 20% in April alone.
To mitigate a potential surge in youth unemployment, the government have introduced a whole host of policy frameworks aimed at those aged 16-24 in the recent mini-budget. If they work as intended, they could revolutionise the labour market across Great Britain. However, this ‘if’ is largely dependent on whether the economy can return to its pre-COVID state within six to twelve months.
For instance, the ‘Kickstart Scheme’, requiring £2 billion in funding, aims to create hundreds of thousands of high-quality six-month work placements. The funding available for each individual job opportunity will cover a 25-hour week paid at the relevant National Minimum Wage.
On one hand, the policy appears optimistic. Young people will get paid while enhancing their skill set for future employers. However, these six-month opportunities are only short-term solutions to a stagnant demand for labour that could last for over two years, as occurred following the Global Financial Crisis in 2008.
With a similar lack of long-term insight, the government will also give £2,000 to employers in England for each new apprentice they hire aged under 25 from 1st August 2020 to 31st January 2021; an end date not even one year after COVID-19’s first appearance in the UK.
The other side of the government’s new array of policy strategies, while less obsessive about the short-term, prove high-risk economically. Their focus is rooted mainly in training and education, with a total of £212 million to fund traineeships and other high-value Level 2 and 3 courses.
Now, yes these are factors that will undoubtedly improve the long-run labour supply and the productive capacity of our economy. But, given that the true financial impacts of Brexit are yet to take force, will there be adequate demand in the labour market to make use of a highly-skilled labour force? This policy set risks stimulating an opposite effect to the one intended in the long-run. Those individuals who receive training may choose to emigrate abroad where jobs prospects are more hopeful if growth fails to pick up soon in the UK.
In order for the above policy decisions to effectively tackle long-run unemployment, growth must be heavily targeted. Strategies to heighten aggregate demand, for instance, the Chancellor’s meal vouchers to aid the hospitality industry, should be encouraged across all industries. We need to see direct supply-side investment in firms.
For, even the day after the budget’s release, multiple top UK retailers announced cuts to their staff. Boots will soon be cutting 4,000 jobs while John Lewis is planning on closing eight shops, putting a further 1,300 jobs at risk. Burger King has also announced that 1,600 jobs could go. The pressure is on our government like never before to make use of what we have learnt from the past, and prioritise economic security for all.
After all, if we are to risk a period of austerity again in the next decade as with Osborne and Cameron in 2010, the spending must be worthwhile. Not high risk, and mostly speculative. Spending needs to be gradually targeted over the next two years (at least), not simply the next six months. Especially in consideration of the fact that it took the UK economy until 2014 to reach pre-2008 levels of quarter-on-quarter growth.
Now, to leave the economy to its ‘invisible hand’ or step in further with even more spending? Whether a Keynesian or a greater fan of Hayek, it’s evident that only time will tell with this one. Let’s check again in six months.
An in-depth list of policy decisions to support young people can be found at: https://www.gov.uk/government/publications/a-plan-for-jobs-documents/a-plan-for-jobs-2020.
Written by Guest Conservative Writer, Emily Taylor
Point of Information
A great start, but needs to continue to further help the youth – a Liberal response
I actually empathise a lot with what Emily has said. I worry about how much of a major long term effect the pandemic will have. As much as I applaud the government’s youth plan, it doesn’t take into account anything post-six months. It is not a criticism of the government. Personally I don’t think it can really plan anything post-September, but some things need to be noted.
Recent graduate students are flooding back to University for another year of education with the lack of jobs. This means possibly double the number of students could be graduating looking for jobs next year. Will companies be able to survive this period and still be growing? The government needs to be prepared to support this.
The fact that companies may not survive another lockdown is a further concern. It is coming to an edge. I know this has played into the minds of the government when reopening; if we see a second wave, this could mean the collapse of the economy.
It is a fantastic start, don’t get me wrong, and I appreciate Emily realising that this is not a quick fix. However, promises of more stimulus packages need to follow shortly after this one!
Written by Senior Liberal Writer, Max Anderson
Sunak’s response is woefully inadequate – a Labour response
The question of the post-COVID economic recovery is an urgent one. I agree with much of what my colleague has written here. The chancellor’s measures show that austerity has and always will be a political choice. This is shown by the fact that during a recession the Tories are in favour of Keynesian style interventions. However afterwards, they immediately start talking about “magic money trees” and tightening belts.
Sunak is hoping for a quick “v-shaped recovery” and Emily is correct in pointing out that there is too much faith in the short term. The youth job schemes being pledged are an extremely inadequate response to a crisis that threatens to be far worse than in 2008.
The scheme is a government subsidy for firms to pay for the employment of people aged 16-24. There is a possibility that even with this strong incentive, there will not be any work available for young people. This would render the government-funded scheme useless if firms don’t take it up.
The pandemic has revealed much about the unsustainable nature of our current economic system. While retail and entertainment jobs vanish, the gig and tech economies are flourishing. Amazon has become a de-facto public service, and home delivery services have seen their profits skyrocket. The power of tech companies has only become entrenched and their capacities to survey and intrude will only increase because of the crisis. This will render them being seen as even more essential and will only embolden an unaccountable corporate tech dictatorship.
We need an inspiring vision of a post-consumerist recovery to stop the planet slowly being killed. Sunak and most of the political class are simply incapable of beginning to imagine and conceive of such a future.
Written by Senior Labour Writer, Jack Walton