“If at first you don’t succeed, you don’t succeed”

Posted By Rhian Johns, Private Equity Foundation

11 May 2012

It is easy to assume that youth unemployment is merely another sign of recession Britain. Yet at yesterday’s launch of the Missing Million research programme with David Miliband at The Work Foundation, each of the four speakers pointed to a very different premise. Youth unemployment was on the rise long before the recession hit, and although our post-2007 world has had a detrimental effect, it is not the only factor.

In some parts of the UK, one in three young people are not in employment. Youth unemployment is both cyclical and structural. The message from yesterday’s event was loud and clear – in order to ensure young people land safely in the labour market, we need to fix both the cyclical and the structural. If we don’t, economic recovery will not be enough to get our young people into work.

The costs are too high to ignore. According to the Audit Commission (2010), the current cohort of young people not in education, training or employment will cost the UK economy £35 billion in lost economic opportunities and cost taxpayers £13 billion over their lifetimes. Wage scarring is also an issue; young people who are unemployed for a long time will earn less throughout the rest of their lives. They will be less employable. They won't have the skills that business needs and they are more likely to have long-term health problems. The costs are economic, societal and individual. A sheer waste - or as David Miliband so eloquently put it, “not solving the youth unemployment issue is economic stupidity” and tackling it is a moral responsibility.

Last year, the Private Equity Foundation developed a Manifesto for Action, a ten-point plan for improving the way we as a nation tackle the NEET issue. It looks at strategic enablers and more pragmatic approaches for getting young people into work. As both Shaks Ghosh and David Bell highlighted, some of the barriers to work can be as straightforward (and solvable) as transport being too expensive for some to seek or start work or as culturally significant as a lack of motivation. We heard some stark statements from young people on what they believe the problems to be: services are often termed “irrelevant” or “confusing and difficult to navigate”, formal classroom training “lacks relevance” for some. Somewhat depressingly, others commented that there are no second chances: “If at first you don’t succeed, you don’t succeed,” was one young person’s conviction.

Building on work so far, we’d like to hear more from employers. Why do they struggle to recruit young people, what are the barriers? We often ask whether our young people are ready for work, but how ready is the world of work for our young people? The event captured some interesting perspectives but missing from the debate was any discussion of local labour market supply and demand. The UK is not one labour market, but rather many localised labour markets, each with differing needs and requiring different skills. Are we giving the local labour market an adequate voice in the preparation and skilling of our young people? Are we training young people for jobs that simply do not exist or not training them for opportunities which are in demand? Several speakers raised the importance of young people having realistic expectations of the labour market. I’d ask, is there also a need for employers to be realistic about their role in training and skilling young people?

With the two-year Missing Million research programme now launched, I’m looking forward to working closely with The Work Foundation to identify solutions. Throughout the programme, we will be looking at both short and long-term ways to help young people become productive members of the labour market, putting forward policy recommendations for fixing both the cyclical and structural relationship our young people have with it. After all, it would be economically stupid and morally irresponsible not to do this.

Rhian Johns is Marketing & Communications manager at Private Equity Foundation

Download the presentations here