COVID-19 has ‘severely dented’ the job prospects of young workers

The coronavirus pandemic will make it harder for young people to take their first step onto the career ladder or progress into higher paid jobs, according to a new report.

The report by the IFS, and funded by HSBC and the Turing Institute, warns that the COVID-19 pandemic threatens could ‘severely disrupt’ the career progression of young workers, with an impact that may last well beyond the easing of the lockdown.

The study notes that over the last decade, young people starting out in the labour market have increasingly been working in relatively low-paid occupations, many of which are in sectors hardest hit by the COVID-19 crisis – for example, hospitality and retail.

According to the IFS, the share of workers starting their careers in this sector increased by about 50%, from 6% to 9%, between 2007 and 2019.

And as other sources of wage growth have dried up, young workers have become increasingly reliant on moving into higher-paying occupations as a source of early-career wage growth.

Around 28% of wage growth over the first five years of the careers of workers born in the 1970s could be attributed to moving into a higher-paying occupation. This had risen to 50% or more among people born in the 1980s.

The report states that the pandemic threatens to have a ‘prolonged negative economic impact’ on young people by reducing demand for the jobs that are typical among early-career workers and making it harder for workers to find better opportunities than their current jobs.

And it urges the government to focus on the challenges facing young workers as it attempts to manage the labour market impacts of COVID-19 in the coming months.

‘Even a normal recession can be especially damaging for young workers as, for example, hiring freezes disproportionately affect those coming into the labour market and those who would otherwise be climbing the jobs ladder,’ said report author, Agnes Norris Keiller.

‘The recession associated with the COVID-19 pandemic threatens to be doubly bad for early-career workers, because the particular sectors being hardest hit are very disproportionately likely to employ them. Indeed, early-career workers have become more concentrated in those lockdown sectors over time. Without effective action, young people are likely to find the economic costs of COVID-19 persist far beyond the pandemic itself.’

The full report – COVID-19 and the career prospects of young people – is available to read here.

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