Coronavirus: Young people bear the brunt of first Covid-19 unemployment wave

Sunday, 7 June 2020

Last month, more than 25 per cent of people in the US aged between 16 and 24 were out of work.

Young people have borne the brunt of the first wave of coronavirus redundancies, with the proportion of people under-30 seeking unemployment support rising twice as sharply as their older peers.

And economists have warned young people could feel the consequences of Covid-19 for decades to come, particularly those among fresh to the job market.

A 24-year-old junior lawyer, who asked not to be named, told Stuff he moved from Christchurch to Wellington in September for his first job.

However, his workload started to drop as the pandemic hit in mid-February, and he was made redundant.

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Now he is facing financial stress.

'The biggest issue for me is just finances. Most people in their first job don't have that in order.

'My finances have taken a big hit,' he said.

Wellington City councillor Tamatha Paul says there is a sense of hopelessness among graduates.

He is not alone.

The latest Ministry of Social Development figures show the percentage of 18 to 29-year-olds on the job seeker's allowance rose from 4.1 per cent to 6.5 per cent between February and April.

Meanwhile, those aged 30 to 64 on the job seeker's allowance grew from 2.3 to 3 per cent.

Infometrics economist Brad Olsen said young people have borne the brunt of job losses.

'In April, you had 3 per cent of population aged between 30 and 64 who were on jobseeker's allowance.

'For those aged under 29 it is 6.5 per cent - which is double.

'That is a big difference,' he said.

Competing for jobs will be incredibly tough for people with only one, two or three years' experience, he said.

Infometrics economist Brad Olsen says young people have borne the brunt of redundancies so far.

And spending months or years out of work will have life-long impacts.

'Kiwisaver is a good way of looking at this; you will have less retirement money and less of a nest egg.

'There will be a generation divide.

'They won't be able to amass a similar level of wealth,' he said.

Aotearoa Legal Workers Union secretary Bridget Sinclair said some law firms were making some redundancies, with juniors often the first to go.

And the market was already saturated, with around 1000 new lawyers each year competing for jobs.

“I really feel for people at the moment.'

Wellington City councillor Tamatha Paul - who became a councillor last year at the age of 22 - said she knew many of her peers felt like they had fewer options when they graduated, a feeling compounded by Covid-19.

'A lot of places that would've been hiring around the same time haven't been doing the same things,' she said.

'There is definitely a sense of hopelessness.'

Paul, who is a former president of Victoria University's student association, said this was on top of existing financial pressure and insecurity.

'We already knew before Covid-19 we wouldn't have the luxury of ever owning a house.'

Grant Robson from recruitment agency GradNew Zealand said fewer jobs would create more competition.

But after big-name companies suffered reputation damage after reneging on contracts with graduates following the global financial crash, they were unlikely to repeat those mistakes.

While some companies have already shed staff, many have predicted a second, deeper, wave of redundancies when the wage subsidy runs out.

Olsen said while a high level of uncertainty remained the outlooks over the coming months was grim.

'It will get much worse before it gets better,' he said.