It’s been a turbulent decade for the labour market – especially for young people. For one, the impact of the financial crisis a decade ago has lingered. Those who graduated in the midst of a recession – between 2008 and 2012 – were by far the unluckiest. They face higher unemployment, lower pay and worse job prospects up to a decade later.
And while real wages are rising at their fastest rate in two years, growth remains weak by pre-crisis standards. At the Resolution Foundation, we found the UK’s continuing poor performance on productivity – which was down 0.2% year-on-year at the end of 2018 – may limit the scope for faster pay growth.
That this has not yet recovered is unprecedented. And young people are still bearing the same scars: they’re experiencing housing insecurity, and having less secure pensions than previous generations.
Today, young people are much more likely to work in lower-skilled, lower-paying occupations. And that has had long lasting effects on the labour market, because we’re not seeing people move out, move jobs, and move up their career ladders as fast as they used to.
The rates of people moving from one job to another are well below pre-financial crisis levels. And that’s actually really worrying because moving jobs, especially when you’re young, is one of the best ways to get paid better and progress your career.
This has led to an increase in zero-hour contracts, part-time working, and agency working. And it’s not decreasing as fast as we’d expect, given record high employment, which has been driven by relatively low-employment parts of the country catching up.
Despite the challenges of job insecurity for young people, there are things to consider, and feel hopeful about when looking at the future of work.
Firstly, we shouldn’t be scared of the robots!
In a technology-driven world, there is a lot of fear about robotics and automation, smart algorithms, and artificial intelligence, disrupting the labour market. But in the long run, these things tend to be complementary to labour, and we won’t have robots replacing all jobs.
Of course, automation is going to become a bigger feature of many industries, so the types of jobs that exist will undoubtedly change. And that will put an emphasis on employees having adaptable skills. In short, it will hopefully make jobs more interesting, and less monotonous.
While productivity growth has been lacking, I don’t think we’re heading for a stagnating future.
I think that the continued up-skilling the younger generations – who are the best educated generations in history – will mean more higher-skilled employees, and better, more interesting job opportunities.
We can’t predict what jobs will look like in 10 years’ time. But what we will see is technology bringing many new job roles and opportunities into the market.
The jobs of the future might not be the jobs of the past. But I’m confident there will be jobs – challenging, rewarding, enjoyable jobs – available for young people. My main advice to those entering the labour market is to find ways to be adaptable with their skills, have grit, and learn to roll with the tide.
Laura Gardiner, research director, Resolution Foundation. As told to Rossalyn Warren