This summer, new cohorts of young people will tumble out of their closed-down schools and colleges into a shut-down world of no work. Some half a million will be leaving university, as many more may be leaving school or ending training and further education to emerge into nothingness. If they have lost their entire summer term, they will have had precious little careers advice, most of which was an early victim of austerity cuts anyway. The wealth of research from previous recessions shows that a long spell of early unemployment risks people being scarred for life.
Before the virus struck, they might have found jobs that didn’t match their qualifications in pubs, bars, restaurants and cafes – almost all are now closed. On the dole they will join millions of others, many of them young, along with the 1.4 million people newly thrown on to universal credit. The Institute for Fiscal Studies warns that young people are already hardest hit, as under-25s were two and half times more likely to have been working in shut-down sectors: just 5% of those in the top decile of earners have lost jobs.
Here’s a shocking fact hidden by the steep fall in unemployment figures in recent years: there were always at least 800,000 unemployed under-25s adrift – not in education, employment or training (Neets). Many have physical disabilities, illnesses and mental health problems that have been ignored. Many are part of that long tail of lost youth from addicted or violent families; they are care leavers, people with no qualifications pulled into gangs and drugs, and failed by schools and underfunded social services that are unable to pick them up in time. As one employment expert said, “These were the ones we didn’t fix when the sun shone.” Instead of help, they were chased away from claiming benefits by Iain Duncan Smith’s exceptionally punitive Jobcentre-sanctioning regimes demanding they sign in every day.
This week the alarm was raised by the Youth Employment Group, a new consortium including the Institute for Employment Studies (IES), the Prince’s Trust and others determined to prevent another lost generation of long-term unemployed people. Tony Wilson, director of the IES, and a former senior DWP researcher, has been watching the weekly vanishing of vacancies in horror: “They are the lowest ever, three times worse than ever before and each week it gets worse.” All sorts of jobs have gone, he says – in accountancy, finance and IT, along with the rest. In a recession, “what kills is not people losing jobs, but the lack of anyone hiring,” says Wilson.
It will take a phenomenal government effort to fire up good work programmes. Already Rishi Sunak, the chancellor, has talked this week of winding down the government’s furlough scheme. But what happens next to all the millions of employees who will be cast off? Young people are always at the back of the queue.
Ministers have no memory: they deliberately forget anything some other government did. They prefer to reinvent wheels, marking their own thumbprint on schemes, regardless of voluminous evidence on what works. But this time, if they want to prevent unemployment armageddon, they should look back to what Labour did, both with 1997’s new deal for young people and its post-2008 crash rescue programmes. What worked was job guarantees and high-quality training, experienced advisers and subsidies to employers to hire those who were unemployed.
One of the most successful was the post-crash Future Jobs Fund, a generous-spirited and popular plan. I followed its progress in detail, interviewing its beneficiaries and employers who took people on. After six months’ intensive help to find work with a personal adviser, people were offered expensive training in almost anything. If still out of work after nine months, any employer taking them on was given a subsidy of £6,500. There were strict conditions, drawn up with the CBI and TUC: no job substitution, no displacing other workers, but the creation of an extra job doing something of benefit to the community. All these Labour-era work programmes were intensively researched.
The Future Jobs Fund ran for little more than a year before the Tories turned it into a 2010 election weapon. David Cameron abolished it with a flourish; he said it was “expensive, badly targeted and did not work”, an example of Labour over-spending. Not so. Instead his action was an example of his government’s taste for policy-based evidence-making – pick your political policy first and invent the evidence later. Cameron didn’t bother to wait for actual results. The academic evidence supporting the programme – which involved following up all cases and control groups, tracing what became of recipients – emerged a year too late. But it showed this had been an unprecedented success that produced a net gain to the UK: compared with control groups “it had raised the number of unemployed who went into permanent work by a quarter – a phenomenal success”, says Wilson.
It saved £7,750 for each participant in extra tax receipts and reduced benefit bills. There is plentiful research on other schemes, too: the successful German Kurzarbeit (“short-time work”) scheme offers a way to turn furloughing into a part-time work subsidy. Look back, too, at Franklin D Roosevelt’s New Deal for how governments can invest to employ: there was no lack of urgent public works after a decade of neglect. But above all learn from the best of Labour’s programmes. Rebrand them as Boris bonuses or whatever, deny their Labour origins, but use the high-grade evidence for what works to help save another generation from the lifelong damage of extensive unemployment.