Hopes of a V-shaped recovery have given way to reality of a U-shaped crisis, with young adults and young pensioners most likely to have stopped working during the pandemic according to a report out this morning
The Resolution Foundation’s Intergenerational Audit found that the coronavirus crisis has caused loss of life, threatened livelihoods, and upended daily life. And it has been felt differently across different age groups.
Over half of workers in their 20s and early 60s have stopped working since the pandemic began, either by being furloughed or losing their job
Young adults and young pensioners have experienced the biggest deterioration in their mental health during the crisis so far. This likely reflects the wider economic and social impacts of the pandemic.
However the starkest impact of COVID-19 has been on mortality, which has overwhelmingly fallen on older generations.
The Foundation warns that young and pension-age workers are most at risk during the next phase of the crisis, as furloughing ends and unemployment continues to rise. It notes that should the Office for Budget Responsibility’s projection for unemployment to reach 11.9 per cent materialise, youth unemployment could rise to around 17 per cent – the same level as the early 1980s peak.
But while the jobs crisis has affected young and old alike, the report shows that the impact of the crisis on people’s living conditions has fallen most heavily on young people. Around one-in-seven people under the age of 30 have missed a rent or mortgage since the pandemic began, compared to just one-in-thirty 60-69s.
Young people (aged 16-24) have also experienced lockdown living in housing with half as much space as those aged 65+ (26 square meters per person, compared to 50), with greater risks of damp, no garden access – and now eviction.
Finally, the report notes that while generations have had very different experiences of the covid crisis so far, Britain’s path out of the crisis rests on a strong living standards recovery for all age groups.
For younger generations, holding back rising unemployment by protecting jobs and supporting the creation of new jobs, including via direct public investment, will be vital to prevent losing a covid generation to long periods out of work.
For older generations too, the report notes that pensioners typically spend a bigger share of their income on activities that involve socialising, such as eating out, than any other age group.
Suppressing the virus would therefore encourage back the pre-pandemic boom in pensioners’ social spending – helping to rebuild Britain’s hospitality, retail and leisure sectors, and the jobs they provide for young adults and young pensioners.
David Willetts, President of the Resolution Foundation, said:
“The pandemic has already cost tens of thousands of lives, millions of people their livelihoods, and upended everyone’s daily lives. As hopes of a V-shaped recovery fade, our analysis reveals the reality is more of a U-shaped crisis, with young adults and young pensioners most likely to have stopped work or suffered mental health problems.
“For younger generations, this crisis has created wider problems. The growth of the high-cost, low-security private rental sector has led to missed housing payments and cramped living spaces during lockdown. It has also reinforced the underlying trends for younger people to have less wealth than young people did a generation ago, while increases in the value of houses and pensions particularly benefit older generations.
“With infections rising again, the covid crisis is sadly far from over. That means the risk of losing a covid generation to long-term youth unemployment is real. But there is plenty that policy makers can do to prevent it – from extra training provision to a greater focus on creating new jobs to support people out of this crisis.”
