Young people disproportionately hit by West Midlands economic shutdown

The latest research by the Institute of Fiscal Studies has shown that young people are being disproportionately hit by the coronavirus crisis.

Young people have been designated a top priority by a high-level unit tasked with managing the impact of the COVID-19 pandemic on the West Midlands economy.

The designation comes after the latest research shows that young people are being disproportionately hit by the crisis due to the high numbers working in the hospitality, retail and other sectors at the sharp end of the lockdown.

The West Midlands COVID-19 Economic Impact Group, which brings together key public and private sector organisations including the West Midlands Combined Authority (WMCA), has endorsed councils and other organisations in delivering support for young workers.

The Group, which meets virtually every week, heard last week how young people were likely to be the hardest hit by the coronavirus shutdown of businesses including restaurants, hotels, pubs, retailers and transport services.

Research by the Institute of Fiscal Studies has found that workers aged under 25 were more than twice as likely to work in a sector forced to close by the social distancing rules.

Companies in those sectors employ nearly a third (30%) of all employees under 25, not including full-time students who also have a job. This compares with just one in eight (13%) of workers aged 25 and over.

Mayor of the West Midlands Andy Street, who chairs the Economic Impact Group, said: “Young people will have a key role to play in forging a strong recovery for our region, and in the longer term will be instrumental in re-building a successful, inclusive, regional economy.

“That’s why the Economic Contingency Group is working closely with local councils and others to make sure the support available for young people is getting through.”

The research released this week by the Institute of Fiscal Studies also found that low earners were seven times as likely as high earners to work in a business sector that has shut down. It said a third of the bottom 10% of earners worked in the worst-hit sectors, against one in 20 (5%) of those in the top 10%.

It found that while many were continuing to be paid, with a 20% pay cut, under the government’s furlough scheme, there was a very real risk that across the UK thousands would be made redundant.

Tim Pile, chair of the region’s Strategic Economic Development Board, said: “One the great strengths of the West Midlands is it’s youthful and diverse population, which brings great advantages to many of our region’s key business sectors.

“It is absolutely imperative that we support young people through this period and beyond. Their contribution will be critical as we rebuild our economy together.”

Young people and others wanting more information about online training courses now available should visit the WMCA’s COVID-19 support site at beta.wmca.org.uk/what-we-do/covid-19-support/online-courses/.