Young people hit by the last recession could be the first to suffer again if a Brexit occurs, according to the Confederation of British Industry (CBI) and ManpowerGroup.
Following the last recession, the employment rate for 22 to 30-year-olds fell by 4 percentage points, while remaining unchanged for 31 to 59-year-olds and the same age group saw real pay fall three times as much compared with over 30s, according to the Institute for Fiscal Studies (IFS).
Now the national business group and global recruitment firm ManpowerGroup are warning that in the event of another serious economic downturn young people will likely be hardest hit again.
The economic consensus is that a Brexit would create a significant economic shock in the short-term, with the OECD predicting 3 per cent less GDP growth by 2020. Both the International Monetary Fund and IFS echo these concerns. And the Treasury’s own analysis says there could be a ‘profound shock’ to our economy that would push it ‘into a recession’ if the UK leaves the European Union (EU).
Youth unemployment in the North East is currently 19.2 per cent according to the latest figures from the Office for National Statistics, demonstrating the challenge faced by the region’s young people in the event of Brexit.
Sarah Glendinning, CBI North East director, said: “It’s abundantly clear that if leaving the EU triggers another recession those leaving school and university in the coming years will bear the brunt of job losses and lower wages.
“We know the majority of small, medium and large firms want to remain in the EU because it helps their businesses to grow and their staff become more prosperous.
“While it can be tedious and time-consuming to wade through the claims made by both sides of the debate, it’s undeniable that the youngest were hit hardest in the last recession – and will be again if the economic shock predicted by most credible forecasters becomes a reality by leaving the EU.”
Mark Cahill, managing director, ManpowerGroup said: “Young jobseekers are facing one of the toughest markets in recent times as hiring slows in the face of concerns over the impact of the national living wage and the forthcoming referendum. They will be first in line to pay the price for any lost investment in Britain, with obvious risks including a fall in entry-level jobs and greater competition from more experienced workers.”