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Jonathan Wright
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Jonathan  Wright

Allowing young people to ‘earn a few bob’ is not the answer

Authors: Jonathan Wright Jonathan Wright

27 July 2011

Lord Jones – the former CBI director and Labour Trade Minister – thinks that children who are struggling at school should be allowed to leave education and ‘earn a few bob’. His argument follows that by allowing disruptive young people to leave school at 14 and embark on vocational training and employment, the UK would be able to address its skills shortage problem, while simultaneously rebalancing the economy and stimulating economic growth. While well intentioned, his thesis is flawed and potentially damaging for both individuals and the wider economy – a view shared widely by the teaching profession.

Firstly, we know that educational attainment is profoundly important in determining future labour market outcomes. Last year the government commissioned Professor Wolf to report on the state of the vocational education system. The Wolf report found that by the age of 16 less than 50 per cent of students have English and Maths GCSE at A*-C – fundamental to a young person’s employment prospects, whether that be in a factory,  a shop, or an office – and at age 18 the figure is still below 50 per cent.    

Secondly, at all costs we must not allow young people to lose contact with the education system or the labour market. There are serious scarring effects – in terms of future wage and employment prospects, but also social and psychological outcomes. Further, there are large public resource costs (in terms of lost productivity) and public finance costs (in terms of higher welfare bills).

Earlier this month, my colleague Paul Sissons showed that in recent years the labour market has become increasingly polarised, with an increase in both higher level and elementary level occupations, and a worrying decline in middle level occupations. The result: many people have been forced to take lower level jobs than they previously held. This makes it even more challenging for young people entering the world of work for the first time with little to no work experience. There are already almost 1.4 million 16-24 year olds not in full-time education and employment – a figure that has been rising since 2000.

Thirdly, although poor educational attainment is a common cause of labour market disadvantage, young people are not a homogenous group and there are multiple risk factors that must be considered. These range from a lack of softer skills such as interpersonal and communication skills, to personal and home life problems, psychological and emotional problems. The state of the local labour market also plays a role – many towns and cities have lost their economic rationale, have shed private jobs, and are now vulnerable because of their dependence on the public sector for employment. Jones rightly points out that there are skills shortages, but these are not going to be filled by ‘disruptive’ and disengaged 14 year olds.

The Coalition recognises the challenge. One of its five priority action points in ‘Supporting Youth Employment’ published in May is driving up educational attainment – it recognises that a good education is fundamental to the success of a young person. However, less welcome was its decision last year to abolish the Education Maintenance Allowance, an initiative which increased education participation rates.

The government’s other focus has been apprenticeships. Earlier in the year it promised it would create 50,000 new apprenticeships as well as 100,000 new work experience places. It has exceeded these expectations. But while one in four employers offer apprenticeships in comparator countries such as Germany, only one in ten offer them in the UK. Jones believes vocational pathways would support our manufacturing sector, but it must be noted that only 7 per cent of apprenticeships are in this sector – the overwhelming majority are in services.

What we need – as advocated in the Private Equity Foundation’s Manifesto for Action – is a coordinated and holistic approach to dealing with disengaged young people. The Coalition’s emphasis on apprenticeships is clearly welcome, and will make a genuinely positive difference. But there is no single solution because there are multiple risk factors that make a young person more likely to be detached from school or employment – and discouraging or disincentivising school is definitely not the answer. In the Netherland’s for example – which has the lowest youth unemployment rate in Europe – they created a youth unemployment task force alongside €250 million of resource. It incentivised young people to stay in school, and also helped to create more work and learning opportunities. We need this kind of action, leadership and commitment in the UK.