Medically speaking, Covid-19 is usually far deadlier for the old than the young. But for the young, the effects of the coronavirus pandemic are economically devastating.
One third of 18 to 24 year-olds have lost work because of the pandemic, and are unlikely to be saved by the government’s new ‘kick-start’ schemes. Between March and May, the number of those under 24 claiming universal credit reached half a million, and those who leave school or graduate from university this year can expect to earn less even a decade from now, than they otherwise would have done.
Depending on where you get your news, the young have both been celebrated for accepting their lives being put on hold to protect those who are more vulnerable to the virus, and tarnished with the brush of ‘ruining it for everyone else’ the second that they set foot in a Wetherspoons. Fairness dictates that contingency plans must now be put in place to prevent the next generation from bearing the brunt of the coming recession. But is politics ever fair?
Britain has a worryingly large age disparity when the country goes to the polls. The old vote in higher numbers than the young, and so political parties have tended to prioritise the former. Although the elderly bemoan austerity when the over-75’s are told that they have to pay for their own TV license, the coalition’s triple lock has protected pensioners from the cuts to working-age welfare over the past ten years. But to see the state pension increase by a double-digit amount next year (which it will do if the triple lock isn’t reformed) would be a kick in the teeth for the young. At a time when millions of working-age Britons are unemployed, and paying off other peoples’ second homes because they can’t afford to save for one of their own, the young will suffer in the long-term if they are left without help.
On Wednesday, Rishi Sunak announced a ramshackle solution to the impending unemployment crisis. The state will pay for employers to hire young people for six-month placements – a rough and ready government intervention, but it must be judged against option B. Without it, youth unemployment would sky rocket. A similar system has existed in Ireland since Celtic Tiger was put to sleep in the mid-2000’s, in order to get graduates and school-leavers into work.
Yet the glass ceiling that many graduates are all to familiar with remains. Those who can afford to undertake unpaid internships because they come from wealthier backgrounds will still have a larger pick of entry level employment opportunities than those who will rely on an income from a job or graduate scheme. These government-funded jobs can only be a short-term fix, any medium to long-term solution is going to require an overhaul of post-16 education, and the greatest generational issue in the UK; housing.
Education
The expansion of higher education has not worked out as planned. Although the 50% target for pupils to go on to university has been reached and exceeded every year, too many students do not get a return on their investment post-graduation.
Recent research from the Institute of Fiscal Studies shows that men graduating from 23 universities, and women from 9 earn less after ten years than the average non-graduate. This points to a much greater problem. As Gavin Williamson, the Education Secretary, stated on Thursday, one third of British graduates are in non-graduate jobs. The government is paying for this broken system: the IFS estimates that only 17% of students will ever pay back their student loans in full.
The government’s response to this problem is to drop the 50% target as well as cutting the funding of thousands of low-quality qualifications, and focus on further education instead. This autumn, the Department for Education will publish a white paper, which will provide guidance on how to set up a German-Style system of technical education. Promisingly, employers will have a direct input into the curriculum, ensuring these qualifications really do set people up for work at the cutting-edge.
Governments have been trying to bring this German-style technical education to Britain since the 1970’s, without success. But yet again this government has been asked to be judged on its success in ‘levelling up’ Britain; a welcome distraction from its beyond embarrassing handing of the pandemic.
Housing
The average first-time buyer is 33 years old, 37 in London. This problem has been compounded by consecutive Conservative governments favouring quantitative easing, pushing up asset prices and benefitting existing home-owners, at the expense of those trying to get on the property ladder.
However, there is some reason to be optimistic, because Tory opposition to planning reform is less than what it used to be. Over the next few weeks, the government will publish planning reforms designed to free up more land for development. The plans would see the UK move to a zonal system of development, actively encouraging building.
There are still many Tories that are uncomfortable with building on their patch, due to the environmental or local blowback. But the current economic emergency should, in theory, give housing reform sufficient momentum, and revive the housing market through reform based on supply rather than demand.
The government’s extraordinary measures but not be judged on whether they keep the economy going in the short-term. The government has a duty of care to make sure today’s school leavers are not left permanently scarred by the economic effects of this virus.
Featured image: Public Domain