Coronavirus: 50pc more youth on unemployment benefit, more job losses predicted

POOL VISION
Finance Minister Grant Robertson says the government's plan for level 2 will get as many people as possible safely working again.

The number of young people on the unemployment benefit has risen by about 50 per cent during the coronavirus pandemic.

Between February and April 2020, the number of 18- and 19-year-olds receiving the Job Seeker Work Ready benefit increased by 46 per cent to 10,131, data from the Ministry of Social Development showed.

An even greater increase, of 62 per cent, was seen among 20- to 24-year-olds, with 24,287 people in that age group accessing the support programme.

There's been a huge increase in young people applying for the unemployment benefit - and experts warn more job losses are likely (file photo).
12RF
There's been a huge increase in young people applying for the unemployment benefit - and experts warn more job losses are likely (file photo).

A jump in the youth unemployment rate is also expected when the wage subsidy scheme ends and the country enters a recession.

READ MORE:
* Budget 2020: Government must choose between prudent debt levels and a 'borrow and hope' approach
* Past pandemics show how coronavirus budgets can drive faster economic recovery
* Working over-65s could stand aside to ease unemployment, economist says
* Old budget 'put on ice' by coronavirus - Grant Robertson

Shirley Johnson, employability director at the Auckland Council-controlled charitable organisation Comet Auckland, said the Covid-19 pandemic would put a spotlight on existing inequalities.

"Young people who have come out of university with qualifications are not going to be as badly hit as young people who are going to be coming directly from school to work."

Māori, Pasifika and migrant young people are more likely to work in industries which have been the hardest hit, such as retail, hospitality and tourism.

Johnson warned another "wave" of job losses would likely sweep through once the wage subsidy dried up.

She hoped the Government would consider providing additional funding for businesses that offered young people jobs or training opportunities.

The good news was it was now an excellent time for young people to upskill or study, she said.

The hospitality sector has been significantly impacted by the coronavirus pandemic (file photo).
The-Dominion-Post
The hospitality sector has been significantly impacted by the coronavirus pandemic (file photo).

An independent survey conducted on behalf of New Zealand's largest online hospitality job search platform Barcats found 46 per cent of a sample of 123 people employed in the industry had lost their jobs due to Covid-19.

The crisis appeared to have taken the greatest toll on younger workers, with 78 per cent of respondents aged 18 to 24 reporting suffering from coronavirus-related anxiety and stress.

Their most commonly cited worry was being unable to find another job in the near future.

Shamubeel Eaqub says now is a good time for young people to upskill.
Supplied
Shamubeel Eaqub says now is a good time for young people to upskill.

Research commissioned by the organisation before the lockdown showed nearly a quarter of 18- to 24-year-olds in the industry were unemployed and just 28 per cent had full-time work. About half, 48 per cent, were on part-time contracts.

Independent economist Shamubeel Eaqub had no doubt more young people would lose jobs in the coming months.

"There’s always more unemployment among young people because they’re looking for work but they may not have experience in industries that are very competitive," he said.

Data from past recessions showed the unemployment rate for 15- to 24-year-olds rose from about 9 to 15 per cent compared with an increase from 3.5 to 6.5 per cent for the general population. 

He agreed with Johnson that now was an ideal time for young people to enrol in further training or study.

Finance Minister Grant Robertson's office has not yet responded to questions from Stuff about whether the Government has considered providing businesses which keep young staff employed with financial incentives, as suggested by Johnson.

Stuff