The UK is sick. It’s much sicker than other similar countries, and the situation is getting worse, snowballing into a health, social, medical, economic, and potential budgetary crisis.
We are heading to an all-time record for health-related benefits, according to recent forecasts, and the Treasury is worried. The rise in the bill for working-age health-related benefits has surged from £36bn before the pandemic to £48bn in the last financial year, and the official Office for Budget Responsibility (OBR) forecast is that it will reach £63bn per year in the next four years, with all these numbers accounting for inflation.
The big fear is that this could lead to a post-pandemic cohort of younger workers who will permanently drop out of the labour market.
New data shows that benefit claimants are trending younger, and suffering more with mental health problems. This has created a new set of problems for the state.
And then with this, comes a more existential conundrum for Gen Z. What if a large swathe of this generation is permanently semi-detached from the jobs market? Economists call this “hysteresis”, where joblessness begets more of it. And could this same generation also be at the sharp end of the explosion of AI replacing a wide set of entry-level jobs – in call centres, retail, law, the financial and creative industries and much more. Britain’s biggest corporations are racing to implement effective AI solutions to handle everything from customer service to their marketing output.
These transformations are happening more quickly than had been expected, affecting everyone from entry level front-line workers through to highly skilled professionals such as art workers, media planners and legal clerks. It will inevitably become a significant reality – perhaps the defining social and economic change over the course of this Parliament.
On a new block of flats being built on the site of an old glass works next to the Birmingham HS2 terminus in Curzon Street, I meet some construction apprentices during a visit by the Work and Pensions Secretary Liz Kendall.
The apprentices acknowledge the challenge with their age cohort.
Mohammed Khan, 23, and Elizabeth Allingham, 18, are both trainee bricklayers on much sought-after apprenticeships. Mr Khan says of his generation, who came of age in the pandemic: “All they’ve known is online or social media. Some people just choose not to work, or some people just don’t know how to get out there and start looking for jobs, and talk to people.”
Ms Allingham says these issues are an expected consequence of mental health worsening during successive lockdowns. “It did stop quite a few people working, but I think it’s slowly getting better. Schemes like this can help motivate people, definitely, especially the part where you can earn while you learn,” she tells me.