Financial crisis ‘scarred’ younger workers

When Carole Farish left school 11 years ago she thought it would be fairly easy to find a job in retail or hospitality.

But like many of her peer group she found it was not so straightforward.

Carole belongs to a generation that, according to a new report, has been “left scarred” by joining the workforce just as the financial crisis hit.

The Resolution Foundation says this “crisis cohort” has suffered from lower pay and worse job prospects for a up to a decade since the downturn.

Carole’s early optimism over job seeking faded when it took her five months just to get an interview, only to find she was competing against candidates with business degrees.

“It was a bit disheartening,” she says. “It took a lot of perseverance to keep applying. I didn’t expect it to be as tough.”

Since then she has worked in a leisure centre, in catering and looking after children. Although she has in the meantime been to university, she is now working as a carer.

The Resolution Foundation says those who entered the world of work between 2008 and 2011 bore the brunt of the sharp economic decline, when compared to young people entering work before or after the downturn.

“Low-skilled workers faced a higher risk of unemployment, while graduates were more likely to trade down the types of jobs they did, with their pay and prospects stunted as a result,” said Stephen Clarke, senior economic analyst at the Resolution Foundation.

“These scarring effects have stayed with the crisis cohort for up to a decade, reducing their living standards at a time when they may be facing the additional financial strains of buying a home, or bringing up kids,” he said.

Policy makers should look at ways to mitigate the impact, he added.

Although unemployment did not rise as sharply as in previous recessions, in 2012 it was still twice the rate for the population in general, the report says.

Those who “trade down” to a low-paying occupation because they are struggling to find work rarely move into a higher-paying occupation, even after the economy has picked up, the report adds.

The Department for Work and Pensions highlighted new jobcentre programmes which it said were examining ways to support people to change jobs and improve their pay and career progression.

“Employment is at a record high, with youth unemployment having halved since 2010. And we believe every worker should be in a job which reflects their skills and offers opportunities to progress,” the DWP said.

In 2018, analysis carried out for the BBC by the Institute for Fiscal Studies (IFS) showed that people in their 30s were earning £2,100 a year less than people in the same age group in 2008.

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