he young are hit hardest by unemployment because not having a job, or losing a job early in a career, often blights them for life. So while everyone suffers in a recession, young people suffer worst. The developed world is now struggling out of the deepest recession since the Second World War, so there is the gravest danger that people in their twenties will be disadvantaged long after recovery has taken hold.
The latest UK figures for unemployment show it has grown from 3.9 per cent to 4.1 per cent in the three months to July, but that is artificial in the sense that many jobs are being protected by the furlough scheme. If you take employment, rather than unemployment, and look at August, there was a fall of 156,000 jobs for 16 to 24-year-olds. You can’t be furloughed if you are entering the job market and have not yet got your first post.
Look around the world and different countries have different policies, and very different outcomes. In the US the aim has been to allow unemployment to rise and then punch up demand so that people are quickly back to work. The result has been that youth unemployment hit 27 per cent in April, but now has come back to below 15 per cent. In Sweden it reached nearly 29 per cent and in Spain it went to over 40 per cent. By contrast, in Germany youth unemployment is only 5.7 per cent. So is Germany doing something right while much of the rest of the world is doing something wrong?