What have you always wondered about the economy? Tell us
COVID & Unemployment

The U.K. has a plan to pay businesses that hire young people

David Brancaccio, Victoria Craig, and Meredith Garretson Sep 4, 2020
Heard on: Marketplace Morning Report
HTML EMBED:
COPY
The goal is to create around 300,000 jobs and help train these entry-level workers. Pictured: U.K. Chancellor of the Exchequer Rishi Sunak at a Jobcentre Plus in London. Anthony Upton-WPA Pool/Getty Images
COVID & Unemployment

The U.K. has a plan to pay businesses that hire young people

David Brancaccio, Victoria Craig, and Meredith Garretson Sep 4, 2020
The goal is to create around 300,000 jobs and help train these entry-level workers. Pictured: U.K. Chancellor of the Exchequer Rishi Sunak at a Jobcentre Plus in London. Anthony Upton-WPA Pool/Getty Images
HTML EMBED:
COPY

The job market is terrible for adults with résumés. Imagine being a young person just starting out.

Here’s an idea: The government pays businesses cash if they hire young people. That’s just what the British government is doing. This week it launched a $2.5 billion “Kickstart” program.

The BBC’s Victoria Craig, who hosts the global edition of the “Marketplace Morning Report” from London, has more on this. She spoke with host David Brancaccio and the following is an edited transcript of their conversation.

David Brancaccio: So money changes hands in this new program. How does this Kickstart thing work?

Victoria Craig: It gives businesses about $2,000 for every six-month work placement they provide for people aged 16 to 24 who are on an unemployment benefit here known as Universal Credit. Now job centers are going to be the ones responsible for identifying people at risk of long-term unemployment and referring them to the scheme. Ultimately, the goal is to create around 300,000 jobs and help train these entry-level workers.

Many big businesses have already signed up. Dale Vince is the owner of one of those companies. It’s in green energy company called Ecotricity. He told the BBC his business could likely create several dozen jobs. But he worries about the implementation.

Dale Vince: We reached out to our local Job Center to say, look, how’s this going to work? And they said, actually, they didn’t know, they weren’t in the loop. We’ve not heard back. So it seems like the details of the policy have not been communicated to local job centers.

Brancaccio: And the U.K. has tried a version of this before, right? What’s the track record in getting young people working?

Craig: Yeah, so in the aftermath of the 2008 financial crisis, the U.K. launched a program called the Future Jobs Fund. And the biggest problem for young people is that the longer they’re unemployed, the worse their longer-term pay prospects are. And that can cause a drag on society in the country’s economic prospects overall. So academic research shows, and the think tanks that we spoke to say, that these types of programs do help combat this problem.

Critically, with this scheme that the government has launched this week, for businesses to be able to get the funding they have to prove that they’re actually creating jobs and not just laying off older workers to make way for newer younger ones. The question though, is going to be whether this program goes far enough. Thousands of young workers work in hospitality and retail and they’ve been furloughed, so they’re the ones at risk of permanent unemployment because of the coronavirus pandemic.

COVID-19 Economy FAQs

What are the details of President Joe Biden’s coronavirus relief plan?

The $1.9 trillion plan would aim to speed up the vaccine rollout and provide financial help to individuals, states and local governments and businesses. Called the “American Rescue Plan,” the legislative proposal would meet Biden’s goal of administering 100 million vaccines by the 100th day of his administration, while advancing his objective of reopening most schools by the spring. It would also include $1,400 checks for most Americans. Get the rest of the specifics here.

What kind of help can small businesses get right now?

A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.

What does the hiring situation in the U.S. look like as we enter the new year?

New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.

Read More

Collapse

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.