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Government Kickstart program helps 100,000 young people


The UK government started a program in September 2021 which so far has helped over 100,000 young people in the UK to find work in developing sectors.

The program itself is designed to target young people who are at threat of long term unemployment as targeting 16-18-year-olds who are currently out of work and out of education is designed to ensure that these young people develop the skillsets necessary for working life.


This is because Youth unemployment, which is currently at 12.2% a decrease from 12.9%, according to July’s most recent figures, has very adverse effects on the economy.


This is attributed to the fact that young people, who are unemployed or not in study, become increasingly unemployable every year as each year as new graduates flood labour markets, thus placing the previous group, who have not been developing skills, at a major disadvantage.

Consequently, as more ambitious individuals join the workforce, those who have been left behind continue to have their skillsets deteriorate, decreasing the chance of employment and leading to increased risk of this becoming a long-term issue.


For the economy, this has adverse effects, as this long-term unemployment is leading to wasted resources as young people are not at work earning the disposable incomes they could be receiving to raise their standards of living. This loss in potential output slows down economic growth in the short run as a lack of consumer expenditure in young people, due to high youth unemployment rates, decreases the rate at which aggregate demand rises, thus reducing increases in Real GDP, or, short-run growth. This reduction in growth can also lead to lower tax revenue from the government from sources such as income tax as unemployed individuals for one, do not contribute to this tax, and, two, make it so that a multiplier effect is less likely to be achieved as their lack of disposable incomes yields lower consumer spending, which, makes up 66% of aggregate demand. At the same time, if young people become unemployed in the long-term, this can place further burdens on the third party as the government will be forced to allocate additional spending to automatic stabilisers such as Job Seekers Allowance or Universal Credit, thus worsening the opportunity cost as this funding could be spent elsewhere on public goods such as the NHS to reduce pressures on the health service which has 6 million waiting for treatment. Furthermore, young people who are without jobs or not in education have a higher chance of becoming affiliated with anti-social behaviour, as their potentially vulnerable states may make them prone to radicalisation. Consequently, because of these potential adverse trends, the UK government has decided to step in to give young people a helping hand by providing opportunities such as the kickstart program. The program itself has so far helped 100,000 young people since its introduction in September of last year with an overall cost of £2 billion.

Yet, money is available for up to 250,000 roles.


"Having hit the 100,000 milestones, we are now on the last lap and I encourage employers and young people to take advantage of this opportunity," said Work and Pensions Secretary Thérèse Coffey. Currently, many ministers are appealing for firms to come forward with additional jobs before the scheme finishes in December.

Through this scheme, young people aged between 16 and 24 who are on Universal Credit are matched to roles by their local jobcentre. If successful, they are interviewed by potential employers, who then decide whether to take the young person on. Yet, due to the increased risk attributed with employing an individual who has been out of work, the government over the national minimum wage for a six-month period, at 25 hours per week.


A further £1,500 grant is available per placement to help cover set-up costs and assist in developing skills.

With this financial assistance, firms are able to take on young people who otherwise would not be considered for certain positions, thus helping to develop skillsets, and, in the long-term, future employment opportunities. The economic benefits of this scheme are night and day, with a cost of only £2 billion, it may be logical for the UK government to continue an extension of the scheme.

 

Written by Hubert Kucharski




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