Young workers in North West are four times more likely to work in sectors where jobs are most at risk

New analysis published today by the TUC shows that young workers (aged 25 and under) in the North West face the highest risk of unemployment due to the coronavirus crisis.

Sectors at highest risk (UK figures)

Workers in all sectors of the economy face employment risks due to the coronavirus crisis and the recession that is expected to follow.

However, two sectors are at much higher risk of losing jobs compared to others: ‘accommodation and food’ and ‘arts, entertainment and recreation’.

Our analysis uses three measures to assess risk: (1) the rate of furloughed workers, (2) the proportion of businesses that have paused or cancelled trading, and (3) the proportion of businesses with turnover falling more than 50%.

These two sectors not only rate the highest for all three measures, they are also in a league of their own, with rates far exceeding the construction sector in third place.

NB – this table shows selected data from the analysis. For a full table covering all sectors, see the research note. 

Young workers in the North West

The analysis suggests that, without urgent action, the North West may be on the brink of a surge in youth unemployment.

• Of 508,000 UK workers aged 25 and under in the North West, 108,000 work in accommodation and food, or arts, entertainment and recreation.  
• It means that 21% of North West workers aged 25 and under work in these two sectors, compared to 5% for workers older than 25.  
• North West workers aged 25 and under are therefore four times more likely to work in one of the two sectors where jobs are at greatest risk. 

In addition to lay offs, recessions make it much harder for young people seeking to enter the labour market for the first time, as employers are doing much less hiring. This is part of the reason why youth unemployment following a recession tends to be much higher than for other workers.

UK job vacancies have already fallen 25% compared to this time last year. And the sector with the biggest fall is accommodation and food (42%).

Job guarantee scheme

The TUC is calling for a job guarantee scheme to stop those without work becoming long-term unemployed, with early access to the scheme for young workers.

It would resemble the future jobs fund, which was part of the national recovery plan following the recession in 2008 caused by the private banking crisis. A government evaluation found that two years after starting the programme, participants were 27% more likely to be in unsubsidised work.

Key features of the TUC’s proposed jobs guarantee scheme:

• Supports additional jobs that would not otherwise be created by employers
• Enables work that benefits the UK, such as helping to decarbonise the economy
• Offers secure contracts of at least six months
• Pays at least the real Living Wage
• Gives training opportunities to help people move into longer-term work
• Provides guaranteed access to trade union representation

Alongside the job guarantee scheme, the TUC says that government must work with businesses and unions to protect as many jobs as possible. This should include extending the job retention scheme for employers who cannot easily adapt to social distancing.

And ministers should form a national recovery council alongside unions and employers, to design and deliver a recovery plan that protects and creates decent jobs.

TUC Regional Secretary Jay McKenna said:

"We know it's a tough road ahead. But the more people in work, the faster we can work our way out of recession.

“Our regional recovery plan must be centred on jobs – both protecting those we have and creating more.  We need more good jobs in social care, in the green tech that our future depends on, in UK start-ups and in a revitalised manufacturing sector.

“For those who lose their jobs, the government must set up a job guarantee scheme. Young people in particular can’t be left to the misery of long-term unemployment. And it’s the best value option for the Treasury.

“If we make sure everyone has a decent job on a fair wage, we can recover faster and build back better."

- Full TUC analysis: The full analysis on which this release is based can be found in the research note linked to here: https://www.tuc.org.uk/sites/default/files/2020-06/Young%20workers%20and%20at%20risk%20industries%20-%20research%20note%20-%20final%20draft.pdf

- Job Guarantees Report: The TUC report ‘A new plan for jobs - why we need a new jobs guarantee’ can be found here: https://www.tuc.org.uk/research-analysis/reports/new-plan-jobs-why-we-need-new-jobs-guarantee

- Net benefits from the Future Jobs Fund (FJF): DWP’s evaluation of FJF in 2012 showed that overall, the programme was associated with net benefits to the employer (£6,850) and the participant (£4,000). The cost to the Exchequer per participant was £3,100, so the net benefit to society was £7,750 per participant. Two years after starting in the scheme, participants were 16% less likely to need welfare support, and 27% more likely to be in unsubsidised employment. 

- Research on young workers and long-term unemployment:  A study by the University of Bristol identified that prolonged periods of unemployment can negatively impact people’s experience of the labour market later on in life in the form of lower wages and higher unemployment rates. It shows that these impacts are especially significant for young people who experience long-term unemployment compared with people who experience it later on in life. https://www.bristol.ac.uk/media-library/sites/cmpo/migrated/documents/wp97.pdf

- About the TUC: The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together more than 5.5 million working people who make up our 48 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living.