Gordon Brown Urges Govt To Pay Subsidy to Employers for Hiring Workers Under 25

Summary

• Former PM Gordon Brown has appealed to the government to pay employers a wage subsidy of £100 a week to hire workers under 25
• Brown said the government's £2bn kickstart scheme announced in the summer would not be sufficient.
• About 1.5 million young people will need help to find jobs over the next year

Former Prime Minister Gordon Brown, who led the country during the financial crisis of late 2000, has urged the government to provide employers a subsidy of £100 a week to recruit workers below the age of 25. 

Amid the pandemic, unemployment has become one of the biggest problems in Britain. Keeping that in mind, Prime Minister Boris Johnson’s government has launched various schemes such as Furlough and Job Retention to provide an impetus to the rising unemployment in the country.

Ever since the coronavirus pandemic has crippled the world economies, many countries have injected monetary packages to protect people from the collapse of businesses.

Brown, who was a leader in the Labour Party, said that nearly 1.5 million young people would require help to find jobs over the next year. Unemployment, he said, is going to exceed 20 per cent in the region of Midlands, Scotland, Wales, and Northern Irelands in the coming months.

Unemployment Woes

According to the Office for National Statistics, the unemployment rate in the UK has soared to its highest for two years as the Covid-19 outbreak has disrupted the businesses. The data show that the unemployment ratio swelled to 4.1 per cent in the three months to July, compared with 3.9 per cent in the same quarter last year. Millennials faced a major setback and saw the highest drop in unemployment compared with people of other age groups.

The numbers look alarming as far as the job market is concerned, though the government-backed employment retention schemes might provide some temporary relief. However, in the coming days, the job market scenario looks bleak, given the second wave of Covid-19 cases in the country, which is followed by the implementation of new lockdown rules. Brown said

A study conducted by labour-market specialist Paul Gregg shows there are nearly 700,000 young people who need assistance for employment or training during the summer. However, the numbers have grown by 500,000 as many youngsters under the age of 25 are losing their jobs because businesses are closing down. 

The report highlighted that around 60 per cent of redundancies since March had hit the under-25s and the unemployment rate for young men is already more than three times the adult rate.

Gregg, who works at the Bath University, added that workers between the age of 16 and 24 who don’t have a full-time education degree or job would find it extremely hard to find work after the furlough scheme ends. He estimated that besides these young people, there are at least 695,000 workers in the UK, who have lost their jobs since March.

Government Schemes

Given the growing unemployment across Britain, the UK government had launched a £2-billion Kickstart Scheme that will enable those aged between 16 to 24 to find six-month work placements. Under this scheme, the employers will be paid a monthly sum of £1,500 for every worker they train.

Earlier, the British government had launched the Furlough Scheme which is likely to end on 31 October. The scheme saw 9.6 million workers furloughed, where the government initially paid 80 per cent of one's salary (up to £2,500) per month. The schemes helped to keep the unemployment numbers down to some extent, experts believe.

Conclusion:

Undoubtedly, the UK’s job market has crumbled, and it may worsen in the coming days given the rising cases of COVID-19 in the country. Chancellor Rishi Sunak is extremely under pressure to provide greater support to young people for employment.

The situation has turned bleak for the job seekers, and those who have completed college degrees will have to face the brunt of joblessness at the highest level. Moreover, with the end of the furlough scheme this month, the jobs crisis is likely to hit people hard, especially those who are aged between 16 to 24. Moreover, the government-backed job retention or job support scheme is not a long-term solution in such a grim situation. It could impact the country’s treasury.

Going ahead, the British government, which is already dealing with Brexit, needs to find a permanent solution to the job crisis. Perhaps a well-researched job support policy aimed at younger generations could prove beneficial in the days to come. Also, the government can take advantage of its resources to pre-plan before they slip into oblivion.