Today (29 September) saw the Prime Minister, Boris Johnson, announce new plans to address long-standing technical skill shortages in this country, the consequences of which will almost certainly be accelerated and magnified by the impact of Covid-19. This has been a concern for Gatsby since the outbreak of the pandemic and is why we asked Charlynne Pullen to explore what lessons, if any, could be learned from policies that were developed to tackle youth unemployment during previous economic shocks.
Her report, which looks particularly at experiences of the 2008 financial crisis in Greece, Italy, and Switzerland; the impact of German unification on Eastern Germany; and the responses to recessions in the 1980s and late 2000s in the UK, suggests that there can be significant benefits to prolonging the education of young people during such times of crisis. It is young people who find it most difficult to secure work during downturns, and they also find their longer-term employment prospects adversely affected compared to those entering the labour market in more prosperous times. Combining these historic trends with the particularly pernicious impact that Covid-19 has had on the sectors which recruit heavily from the younger cohorts, there is much to be concerned about.
Full-time undergraduate study may seem like a haven for weathering the Covid-19 storm, but as has happened in the past, there is a risk that significantly increasing the number of undergraduates will simply worsen the skills mismatches in the economy and lead to a delay rather than prevention of youth unemployment. Rather, the author suggests that we should look to develop a more flexible Higher Technical Education with a focus on Higher Technical skills, noting that the Swiss system of Higher Technical Education may have been one of the reasons why following the financial crash the youth unemployment rate only increased from 7% to 8.5% during the crisis, staying well below half of the rate of the EU at 20% in 2009.
Incentivising employers to create new positions for young people has been undertaken by various governments during periods of recession, from the ill-fated YTS schemes of the 1980s, to the more successful Future Jobs Fund of the previous decade. The recently announced Kickstart scheme appears to be building on the lessons, however it is vital that as well as getting young people into (any) work we need to ensure that there is a pathway for them to continue to develop the knowledge and skills to build a sustainable career. As Charlynne notes, apprenticeships still have a critical role to play in ensuring the longer-term prospects of young people.
At the moment it is hard to think beyond the current crisis, but we should not lose sight of the fact that the labour market was already changing and will continue to change in the face of automation and AI, if anything Covid-19 is likely to accelerate existing trends. There is much to welcome in the announcement from the Prime Minister of greater flexibility in loans and funding for Higher Technical qualifications in response to the impact of Covid-19. However, it is vital that we equip young people with the knowledge and skills that will enable them to have full and rewarding careers long beyond the lifetime of the pandemic.