The coronavirus class of 2020 is graduating into a somewhat troublesome job market. A study from the Centre for Economic Policy Research has used data from the last 30 years to assess the potential long term impact on how the crisis could affect those just starting the job hunt. By Michael Delaney.
Student to unemployment
Finishing university washed over me like a bucket of cold water.
You spend three years “dedicating” yourself to study. Each essay, each assignment, each module and each year are your blinkered goals as you march towards that final grade.
But once it’s over and done with you are both an undergraduate and, to at least my surprise, technically unemployed.
Trying to fight your way into a career that you are passionate about is tough. That was 2014. It’s a lot tougher in the middle of an economic crisis and considerably worse during a pandemic.
What are the stats?
The pandemic has already started to have an impact on the job market, which to be fair could have been a lot worse without initiatives such as the furlough scheme.
Overall in the EU, the unemployment rate in May went up by just 0.1% on the month to 6.7%. But unemployment among the under-25s went up three times as fast by 0.3% points to 15.7%. This is likely due to recent graduates entering the job market after studies.
Whilst this is not the same as the 30% levels of youth unemployment we saw in Spain during the fallout from the 2008 crash, it can have a knock-on effect.
The lost generation
The study shows that one month of unemployment at age 18-20 causes a lifetime income loss of 2%. This can be compounded for every additional month without a job.
Dennis Tamesberger of the Chamber of Labour in Linz, Austria, who tracks joblessness among the young across Europe, says that longer bouts of joblessness when young increase the likelihood of future stints without work because people miss out on gaining skills and experience needed to keep up in the jobs market.
“Periods of unemployment during one’s youth can have a negative impact in later life, which justifies the term of a lost generation,” Tamesberger said.
The curse of being young
There were a few reasons why younger candidates would feel the brunt of the economic turbulence, which included:
- Younger people were more likely be on less secure contracts than their older colleagues and therefore easier / cheaper to be made redundant;
- Work experience and internships could be cut due to offices not being open yet;
- Younger people tend to work in the hospitality and retail sectors which have all been impacted by closures and social distancing measures.
In the UK, Rishi Sunak has announced several new schemes to try and stimulate the economy whilst also giving a boost to young workers.
This includes a £2 billion fund to create six-month work placement jobs for unemployed 16-24 year-olds and more government-funded apprenticeships.
A helping hand
We recognise that being made redundant or even just job hunting can be an incredibly stressful and challenging time. However, I am a firm believer that jobs are created to solve problems, and when I look around I still see problems.
We’ve spoken to a handful of experts, including life coaches and people from HR, about how to navigate the process, and perhaps even inspire you to pursue the dream job you thought was out of your reach.
If not now, then when? While the world is turned upside down, this could be the chance.
You can find our comprehensive guide by following this link here.
Are you a young person whose job has been impacted by the pandemic? Get in touch with us.