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The economic impacts of the coronavirus outbreak: what the experts are saying

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While the coronavirus outbreak is first and foremost a public health emergency, the economic damage caused by the pandemic is also a huge concern. In recent weeks, think tanks and economists have been offering their thoughts on just how badly they believe the economy will be affected by Covid-19, and how long it might take to recover.

With each passing week it’s emerging that the economic impact of the coronavirus could be more severe than first thought. The International Monetary Fund (IMF) has warned that the shutdown of economic activity in the world’s major economies is likely to trigger a far more painful recession than the one following the financial crisis of 2008. The IMF now believes that the world is facing the worst economic downturn since the Great Depression of the 1930s.

In the UK, an equally gloomy prognosis has come from the Office for Budget Responsibility (OBR), the government’s fiscal watchdog. Its stark assessment of the possible economic impact of Covid-19 indicates that the UK economy could shrink by 35% and unemployment could rise to more than two million.

The regional picture

The economic impact of coronavirus is varying significantly across the country. Research by the Centre for Progressive Policy (CPP) has revealed that the decline in economic output is estimated to reach almost 50% in parts of the Midlands and the North West in the second quarter of this year. In terms of decline in Gross Value Added (GVA), Pendle in the North West is estimated to be the hardest hit local authority in the UK, followed closely by South Derbyshire and Corby in the East Midlands.

In Scotland, since the coronavirus outbreak began, the University of Strathclyde’s Fraser of Allander Institute (FAI) has been publishing regular updates about how business is being affected.

The FAI’s most recent survey of Scottish businesses  finds that, while all sectors of the Scottish economy have been severely affected by the crisis in terms of staffing levels, the accommodation and food services sector (which includes hotels, bars and restaurants) has experienced the harshest impacts, with 77% of businesses reducing staff numbers. In addition, 85% of businesses expect growth in the Scottish economy to be weak or very weak over the next 12 months.

On a more positive note, the FAI survey found that more than 95% of businesses which are planning to use the UK government’s  Coronavirus Job Retention Scheme believe it will be ‘very effective/effective’ in supporting their survival during the pandemic.

Business and employment support

The Job Retention Scheme is one of a series of measures introduced by the UK government aiming to limit the impact of the coronavirus, and ensure much of the economy is able to recover when the health crisis is over. While these actions have been widely welcomed, there have been calls for the UK to learn from more innovative measures adopted by other governments.

A report by the Policy Exchange think tank has highlighted Denmark’s wage subsidy, which is differently calibrated to the Job Retention scheme in the UK. While the Danish government is covering 75% of the salaries of employees paid on a monthly basis who would otherwise have been fired, for hourly workers the government will cover 90% of their wages, up to £3,162 per month. The Policy Exchange report notes that this assumes that workers paid by the hour won’t have the savings and support networks that generally better off salaried workers are likely to have.

Household challenges

The bigger economic picture is bad enough. But the real pain of an economic recession will be felt much closer to home. For individual households, social distancing measures aiming to contain the spread of coronavirus are already having significant impacts on spending habits. Research by the Institute of Fiscal Studies (IFS) has highlighted how these changes may be affecting people on different incomes.

The IFS suggests that richer households will be more resilient to falls in income since a considerable proportion of their spending goes on things that are currently not possible, such as eating out and holidays. But because lower-income households spend a higher share of their income on necessities, such as rent and food, the IFS suggests that they will be less resilient to any fall in income.

Exiting lockdown

In recent days, governments in France and Germany have set out plans for easing their lockdown restrictions, while Austria and Italy have already allowed some shops to open.  But the UK government has extended its lockdown to the beginning of May, and has not announced a clear exit strategy.

The uncertainty surrounding the trajectory of the coronavirus makes it exceptionally difficult to see when things might return to normal. But some analysts are becoming concerned about the harm that a prolonged lockdown might do.  A discussion paper published at the beginning of April highlighted some of these dangers:

“A long lockdown will wipe out large swathes of the economy. There will be a negative impact both financially and mentally on too many people. Already the lockdown has seen a surge in domestic violence. How to end the lockdown is key to helping restart the economy.”

The authors of the paper have put forward a strategy for ending the lockdown, suggesting that a phased traffic light approach (red, amber, green) would give everyone a clear sense of direction and address the economic, social and quality of life challenges posed by the lockdown.

After the virus

There is no clear agreement among economists on how the economy might fare once the health emergency has passed. Some economists forecast a sharp recovery, others suggest it will take two or more quarters, while still others forecast an initial boost in activity followed by another dip when the effects of unemployment and corporate bankruptcies start to filter through.

But there is a growing sense that the pandemic will have a fundamental impact on the economic and financial order. And in the UK, Paul Johnson, director of the IFS,  has suggested there will be an economic reckoning:

 “We will need a complete reappraisal of economic policy once the current economic dislocation is behind us. Tough decisions will have to be made which are likely to involve tax rises and higher debt for some time to come. The only other alternative would be another period of austerity on the spending side. That looks unlikely.”

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Youth Work in the Digital Age – What Next?

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by Scott Faulds

On Tuesday 3rd September, youth work organisations from across the European Union came together in Glasgow to launch the European Guidelines for Digital Youth Work, training materials and a collection of short films showcasing Good Practice. This was the culmination of a two-year transnational Erasmus+ project, designed to foster shared understandings and inform, inspire and empower the wider youth work sector to get to grips with youth work in the digital age.

The project was conducted in partnership with YouthLink Scotland, Centre for Digital Youth Care (Denmark), Verke – The National Digital Youth Work Centre (Finland), wienXtra MedienZentrum (Austria), JFF – Institut für Medienpädagogik (Germany), National Youth Council of Ireland and Camara Education Limited (Ireland).

Keynote Speaker: Dr Jane Melvin

To kick off the conference, keynote speaker Dr Jane Melvin of the University of Brighton, spoke of her journey from technophobe to technophile and of her belief that there is no longer an option for youth workers not to embrace digital technology.

Dr Melvin argued that youth workers should utilise any tool which could allow for the better engagement of young people. She described this as the “digital hybrid approach”. This approach encourages youth workers to adopt a critical standpoint when considering the use of digital tools and actively encourages the questioning of why and when digital tools are utilised. Dr Melvin contends that it is as much about using digital tools thoughtfully as it is about deciding when not to use them.

Additionally, Dr Melvin stressed that the concept of young people being digitally literate is no longer relevant in a time where technology is advancing at an ever-faster pace. In the digital age, it is vital that young people can navigate a variety of different digital tools and be confident in adopting new technologies as they emerge. This ability to transfer existing knowledge to critically assess the best way to interact with new and emerging technology has been described as digital fluency, and Dr Melvin advocates the need for every young person to develop this fluency to enable them to thrive in the digital age.

In closing, Dr Melvin stated that for youth work in the digital age, it is essential to find a balance between conservative stability and runaway adoption, to ensure that youth workers can truly reap the benefits of the digital age.

Digital Youth Work in Scotland

As the conference was held in Glasgow, it seemed only fitting to hear about some of the work that youth work organisations in Scotland were doing to help adapt to the digital age.

We heard from Claire McGinley and Inigo Sands from Paisley YMCA, which has received awards for their digital youth work and has fostered partnerships with Microsoft, Google and the University of the West of Scotland.

Claire and Inigo began by stressing that there is no specific type of young person who will take part in digital youth work, as digital skills are vital to allow young people to access the world of work. We all access the digital world as part of our day-to-day lives and for young people there is less of a distinction between the real and online world. Therefore, is it crucial that youth workers are able to help young people develop their digital skills. This is something Paisley YMCA has had a great deal of success at with, through fostering a good environment for ‘stealth learning’.

Paisley YMCA has a maker space, a STEM for girls’ club, coding dojo and are able to adapt to the needs of young people as new digital tools emerge. However, it is not simply about young people becoming experts at using a 3D printer; the activities offered by Paisley YMCA are about giving young people an opportunity to try new things.

Claire and Inigo concluded that there is no secret formula to digital youth work; you just have to do it, and be open to the opportunity for vertical learning.

We also heard from representatives from the Young Scot 5Rights Young Leaders, who spoke of their work to promote the five digital rights for young people, which were based on the United Nations Convention on the Rights of the Child. The five rights are:

  1. The right to remove
  2. The right to know
  3. The right to safety and support
  4. The right to informed and conscious use
  5. The right to digital literacy

The Young Scot 5Rights Young Leaders presented the Scottish Government with their report, Our Digital Rights, which featured 20 recommendations of how the Government can best support the protection of these rights. Recommendations included the integration of digital literacy across all school subject areas, the ability to limit the unnecessary collection and use of young people’s data and the provision of greater internet access in rural areas of Scotland.

The Scottish Government accepted the recommendations of the report and the Cabinet Secretary for Culture, Tourism and External Affairs, Fiona Hyslop, has agreed to keep the 5Rights Young Leaders involved during its implementation. The 5Rights Young Leaders concluded by voicing their desire for Scotland to become a leading example of how young people and children can benefit from the digital age without having their safety and privacy compromised.  

Good Practice

One of the key aims of this Erasmus+ project was the facilitation of the exchange of good practice and knowledge across the European Union. At the conference, we had an opportunity to hear from each of the partner organisations and learn about the work they were doing in their respective countries. The Digital Youth Work website features a collection of videos featuring Good Practice, as well as an extensive library of training materials.

One particularly interesting example was the online counselling services offered by Denmark’s Centre for Digital Youth Care, who operate three tailored online services.

  1. Cyberhus – a general forum for young people aged between 9 and 23 years old
  2. Mitassist – focused on young men and utilises gamification to keep them engaged
  3. Netstof – focused on discussing drug and alcohol problems for young people aged between 15 and 24 years old

These services offer a space for young people to seek advice and discuss problems anonymously, either with their peers on the moderated forum or with qualified social workers. Cyberhus has 40,000 unique visitors each month and the top three issues regularly discussed are self-harm, eating disorders and relationships. The number of regular users and the type of issues discussed can be challenging for staff, who all have to complete a twelve-week course before working on the platform.

 

Digital Youth Work Good Practice video featuring Denmark’s online counselling platforms


The Centre for Digital Youth Care view this service as vital in helping support young people in Denmark. The anonymity these platforms provide is often attractive to young people, with the vast majority not wishing to provide social workers with their location or confirming if they are already in touch with a professional treatment provider. Anni Marquard, the creator of Cyberhus, believes that youth workers must be willing to adapt to allow them to engage with young people. After all, 88% of all visits to Cyberhus are from smartphones. The use of digital tools to enable anonymous online counselling has enabled young people across Denmark to access support when they need it most and the platforms regularly provide more counselling sessions than their real-life counterparts. Thus, it is clear that youth workers must be ready to adapt to the digital age in order to best engage young people.

Final Thoughts

The conference demonstrated that a great deal of work has been done by organisations and countries across the European Union.

The ability to exchange good practice and knowledge from youth workers across the EU enabled everyone to gain a new perspective on how to approach the implementation of new digital tools and was aided by the format of the conference which encouraged networking and dialogue.

The basis of this transnational Erasmus+ project was the exchange of good practice to enable youth workers across Europe to harness the tools of the digital age to better support young people.

Through the production of the European Guidelines for Digital Youth Work, Good Practice videos and training materials, it is clear that not only has this project been a success, but it has resulted in the creation of a powerful and effective resource that can empower youth workers across the world to meet the challenges of the digital age.

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