This post first appeared on ISE’s blog on the 7th July 2020.
On Sunday night the Prime Minister led a nationwide clap to celebrate the NHS’s 72nd birthday. As a (currently locked-down) Leicester resident I know that the health crisis is far from over. But, attention is starting to turn to the economic damage that has been wreaked by the lockdown and the pandemic.
As we try to end lockdown it is becoming clear that we are facing a serious recession and a jobs crisis that has big implications for the student labour market and the wider working population.
The government is well aware that the decline in Covid-19 cases does not spell the end of the crisis. Last week the Prime Minister promised that the country could build its way out of the economic slump and promised a raft of other policies to support employment and economic recovery. As is often the case, the details of these new proposals and policies were slight and fact checkers pointed out that a lot of them had already been announced.
This week we are hoping from more detail from the Chancellor of the Exchequer. There were a lot of rumours over the weekend which suggested that the package of policies and funding that would be announced would be substantial. In reality we won’t know what it is going to look like until it is announced. What is more, this is unlikely to be the government’s final word on post-Covid economic recovery. So, view the announcements this week as an emergency sticking plaster and expect even more in the autumn as part of the budget.
What does ISE want?
At ISE we have bee chronicling the changes that have been happening to the student labour market in our research, bulletins and all of our other Covid-19 activities. Behind the scenes we’ve also been working closely with a wide range of education and employment focused bodies to influence government and support plans that will help employers and students.
Drawing on all of this research and policy work we have assembled a new plan for the reconstruction of the student labour market. In it we set out the three areas where we would like to see government work with employers to take action:
1. Increase employer’s capacity to hire young people
Employers are facing challenging times. Many will face pressure to slow down or stop entry-level recruitment, to slash training and development and reduce the quality of jobs. Decisions to stop hiring or training workers will disproportionately impact on young people. A race to the bottom is likely to exacerbate the recession and locking young people out of the labour market will reduce the chance of recovery. Government should seek to support employers to continue to recruit and develop young people through the following approaches.
- Cut national insurance contributions for all staff under 24 for a year.
- Cover the costs of the 20% off-the-job (study) time for all new apprentices under 24.
- Free employers up to spend their apprenticeship levy on the real costs of apprenticeships.
- Provide a small incentive (£50 a week) for employers who offer placements, internships, and other forms of work experience.
2. Underpin the functioning of the labour market
The recession is likely to be too big for employers to handle it alone, even with government support. In such a situation government has a role to step in and ensure the effective functioning of the labour market throughout the crisis. Government should try to avoid mass unemployment and use the public purse to provide opportunities for young people rather than leaving them to languish on benefits.
- Appoint an independent labour market monitor.
- Offer an opportunity guarantee for all young people who have been unemployed for six months or more.
- Target additional support to areas and industries that are particularly hard hit by the crisis.
3. Support young people
Young people are facing the worst employment market for a generation. It is important that government provides a strong infrastructure for support to help them to successfully transition into the labour market.
- Support educators by providing resources for tutoring and support.
- Review the fairness of the examination system given the disruption by Covid-19.
- Provide access to career guidance and wider employment support.
- Invest in vocational education and provide young people with a maintenance allowance if they choose to pursue this route.
- Provide funding and support for young entrepreneurs.
You can read the full version of the plan for the reconstruction of the student labour market on the ISE website.