While the pandemic’s health impacts have fallen mainly on older generations, in many countries it is the young who have proved most vulnerable to its economic impacts. For the young, this has become a crisis not just of health but of opportunity. For more than a year, they have seen job prospects dry up and their learning interrupted.
The COVID-19 crisis has already pushed youth unemployment rates upwards in nearly all OECD countries with the rise in youth unemployment twice as strong as for other generations. In the UK, 16-35 year olds accounted for 65% of the fall in employment since the start of the pandemic. In 2020 the youth unemployment rate rose to 7.1% from 5.4% in 2019 across the OECD, while globally 1.5 billion students were locked out of their schools.
There will be long-lasting impacts. We know that periods of unemployment can cause long-term scarring for young workers, and for students, OECD work has estimated that the cost of their interrupted education could amount, on average, to 1.5 percent lower annual GDP over the remainder of the century.
Tragically, these impacts will hit – are hitting – those from disadvantaged backgrounds hardest. Those without the means, networks and connections to access work and remote learning opportunities found their existing disadvantages compounded by the pandemic.
It is important to act urgently and collectively to tackle this crisis of opportunity. At the OECD, the Centre for Entrepreneurship, SMEs, Regions and Cities (CFE) is already working with national and local governments across the world to support them in tackling these issues. In April, we convened our Local Employment and Economic Development Committee (LEED) to discuss policies to support young people, including programmes to support youth entrepreneurship, local employment and skills. And in May, we convened our coalition of more than 60 OECD Champion Mayors for Inclusive Growth, who signed a pledge to go further in providing support to young people.
Businesses have both a moral and economic imperative to act to support prospects for young people. But they also have a lot to gain: in doing so they are developing the talent and future leaders that will be integral to their success. Many are already doing so. Over the last 25 years, Santander’s global partnership with universities has invested more than €2 billion and awarded over 630,000 scholarships and grants. And in Mexico, Daimler has joined forces with Inroads, a local NGO, to provide corporate mentoring and apprenticeships to disadvantaged young people through their “Leaders in Movement” project.
But their role – and actions – need to be more urgent and more visible to inspire others to join the cause. Companies – big and small – can help young people in many ways:
- As employers. They can keep open recruitment channels, and enhance their intake this year above all others. They can provide opportunities for paid internships, placements and apprenticeships. They can also reach out to schools to enrich career guidance programmes, helping students to develop the insights and skills that underpin their transitions through education into ultimate employment.
- As managers. They can work within their firms to create opportunities for training and progression to enhance the skills and career prospects of young workers.
- As mentors. They can reach out to young people in the community – through schools or in partnership with local employment agencies – to provide mentorship and guidance, particularly to those from disadvantaged backgrounds.
Whilst larger firms have the resources and capacity to run big programmes to support the young smaller businesses can play their part too, building on their own engagement and influence in their communities. Capassa, a Norwegian fintech startup, responded to the pandemic by establishing an internship scheme last summer, and were so impressed by the ideas, spirit and passion of their new recruits that they have since decided to extend and expand the programme. The OECD Centre for Entrepreneurship, SMEs, Regions and Cities (CFE) stands by youth because they are the future. We need to provide them with the opportunities to realise their potential. Doing so is not just a matter of fairness, but the surest route to future prosperity – for businesses as well as society.
 LFS data. Feb-April 2021 compared with Dec-Feb 2020.