Pandemic Threatens to Widen U.K. Gap Between Old and Young

The gulf between generations in the U.K. is yawning as the pandemic exposes inequalities and damages younger people’s work prospects.

The Covid-19 pandemic risks a prolonged impact on workers starting out in the labor market, according to research published by the Institute for Fiscal Studies Friday. The crisis is reducing demand for the kind of jobs typical of career-starters, such as in hospitality and retail, as well as making it harder for those in employment to find better opportunities.

The bleak outlook comes as young Britons have been living through lockdown in half the space of older age groups, with less access to outdoor space and a greater risk of damp, the Resolution Foundation said in a separate report. One in five children from low-income households are living in an overcrowded home, while 6% have no home Internet access.

The problem is even more acute for Black, Asian and minority ethnic households, where close to a quarter live in a poor-quality environment, it said.

Many lower-paid workers are riskier, high-contact jobs or have been fuloughed or laid off, while higher earners are more likely to be able to work from the safety of home. Unequal access to online education resources and higher infection rates among some minority groups are also concerning policy makers as they seek to avoid economic scarring.

“The recession associated with the Covid-19 pandemic threatens to be doubly bad for early-career workers, because the particular sectors being hardest hit are very disproportionately likely to employ them,” said IFS Research Economist Agnes Norris Keiller. “Without effective action, young people are likely to find the economic costs of Covid-19 persist far beyond the pandemic itself.”

As the U.K. prepares to reopen pubs, restaurants and hotels on July 4, job postings are starting to rise, according to the Recruitment & Employment Confederation. Postings for bar staff climbed 57% over the course of last month, although they remain low compared to before the crisis, it said.

Consumers are also beginning to show more signs of optimism, with GfK’s flash sentiment gauge rising slightly in July.

— With assistance by Zoe Schneeweiss

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