By Ian McConnell

THE long-running “scarring” cost for young people entering the labour market in 2021, as a result of higher unemployment resulting from the coronavirus pandemic, is forecast in a new report at £14.4 billion over the next seven years.

This predicted cost, relating to “lost earnings and damage to employment prospects”, is revealed in a report published today by the Learning and Work Institute and The Prince’s Trust, supported by banking group HSBC.

The report warns young people will “increasingly bear the brunt of the unemployment crisis, at a growing cost to the UK economy”.

Analysing the likely effect of the coronavirus pandemic on the UK labour market, the report concludes the economic cost of higher youth unemployment in terms of lost national output will be £5.9bn in 2021, rising to £6.9bn next year.

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The fiscal cost of higher youth unemployment, in the form of lower tax revenue and higher benefit spending, is projected to be £2.5bn in 2021, rising to £2.9bn in 2022.

Young people in Scotland have seen a 14 per cent drop in hours worked, compared with before the pandemic, according to the report.

Around 55% of employers surveyed in Scotland expect the pandemic to continue to have a negative impact on young people’s employment prospects over the next three to five years.

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The report warns that youth unemployment will “remain high after other areas of the economy begin to recover”.

It notes that, while some areas of the economy might “begin on the road to recovery”, young workers are under-represented in these sectors. The report adds that industries which typically employ young people will be hit hardest in the long term.

Kate Still, director of The Prince’s Trust in Scotland, said: “This report is a stark warning of how the current economic crisis will have a scarring effect on young people, their earnings and prospects. We also know from 45 years’ experience of working with young people that youth joblessness can impact self-esteem and mental health for years to come, if we fail to act.”

Ms Still added: “Government, employers and charities must work together to ensure that the young people who need the most support are not forgotten.

“They need the opportunities to upskill, retrain and access job opportunities, or we risk harming not only our young people’s futures but the recovery of our economy.”