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Rhian Johns
Director of Policy and Campaigns, Impetus-Private Equity Foundation
Rhian  Johns

Location, Location, Location

Authors: Rhian Johns Director of Policy and Campaigns-Impetus

17 April 2014

When it comes to youth unemployment, location matters.  The latest report in the Missing Million [GN1] series, published last week identifies clear geographical disparities across the UK.  Although nationally one in five young people are seeking work but unable to find, this headline figure masks the true extent of the problem within some towns, cities and regions.

 As the UK begins to recover from the economic recession, it is tempting to think that youth unemployment will recover with it, however the report points to structural challenges with the youth labour market that are not merely symptomatic of the recession.  Many of the places currently experiencing the highest levels of youth unemployment are the same places that have experienced economic difficulties for some time.   

In London the disparities are stark, with some boroughs seeing youth unemployment rates of 9% and others 26%.  Up and down the UK the story is the same.  It is tempting to conclude that we must put all our efforts into cities such as Middlesbrough, Barnsley and Glasgow (all have rates over 25%) and ignore those cities with comparatively low levels such as Southampton, York and Cambridge (all have rates below 13%).  However, when compared to Germany that has a youth unemployment rate of 8.6%, the UK’s disparity is not between high and low levels; rather it’s between high and higher levels. 

Skills play an important role in determining employability for young people.  However, contrary to common consensus it’s not as simple as low skills equals high unemployment.  Geography again has a role to play.  The evidence suggests that low skilled workers do better in more successful economies.  Young people with low on no qualifications have much higher rates of unemployment on average, but cities with high concentrations of high skilled workers generate higher demand for low skilled work, such as in restaurants, bars and security services.  Those earning low wages often find it difficult to re-locate or travel long distances to more successful cities, as a result of, amongst other things high housing costs and the availability of public transport and so those living in struggling cities have less employment opportunities.

The paper calls for both national co-ordination and targeted local intervention.  No one government department or agency can tackle youth unemployment alone, however better co-ordination is necessary.  Impetus – PEF are going a step further and call for a ‘time-limited’ Secretary of State for School to Work Transitions, responsible for co-ordinating efforts across Whitehall and Westminster, ensuing there are clear pathways to employment for all young people, including further development of quality apprenticeships and traineeships, including in those industries that employ large numbers of low skilled young people such as retail, health and social care.  However, a national response alone is not enough.  The paper also calls for the development of local Youth Transition Partnerships (YTP’s).  YTP’s would identify young people most at risk of disengaging, tackle local barriers to employment, co-ordinate the efforts of local service providers and  engage the local business community in supporting young people into training and employment.

Youth unemployment across the UK is too high.  However, location matters.  There are huge disparities in youth unemployment levels between cities.  Young people with low or no qualifications have a particularly tough time finding work, especially in less economically successful areas.  The challenge for us as a country is to both have national government’s leadership in setting the policy framework that ensures every young person, leaves education with the qualifications, skills and experiences required for the transition from education into employment, and local area solutions that take into account the particular challenges those areas face.

 

Rhian Johns is the Director of Policy and Campaigns at Impetus

Comments in Chronological Order (Total 2 Comments)

Mike Campbell

26 Apr 2014 10:52AM

A good and interesting piece,but with one major error!

How many times do I have to say this!Listen up everyone:1 in 5 young people are NOT seeking work.Nor are 1 in 5 unemployed. It is 1 in 5 of economically active young people:this makes the youth unemployment rate between 8 and 13%.See my blog for detail-professormikecampbell.wordpress.com
Yes,youth unemployment is a serious problem but it misleads people and policy makers to overestimate it,as so many do!

Mike Campbell

26 Apr 2014 10:58AM

Technically,the proportion of young people who are unemployed should really be referred to as the 'youth unemployment ratio'.the 'unemployment rate' for young people misleads folk because such a high proportion of young people are in full time education.By the way,as this rises so does youth unemployment,ceteris paribus