The events of the past few days in London and other cities has brought (a small minority of) the nation’s young people into sharp focus. The reasons for the riots are multifaceted and complex and they are the subject of fervent debate among media commentators and academics. Two of the reasons offered relate to the labour market – increasing income inequality and rising youth unemployment. It is the second of these I want to comment briefly on.
The youth unemployment problem
Authors: Dr Paul Sissons
Dr Paul Sissons
10 August 2011
In particular, it is important to make the point that large numbers of young people face an incredibly challenging time at the moment to get and keep hold of jobs. In this context it is absolutely vital that we do not lose sight of the needs of the hundreds of thousands of young people affected by youth unemployment, by focusing attention solely on the actions of a small minority.
At The Work Foundation we have been arguing strongly that more attention needs to be paid to the growing problem of youth unemployment in the UK. Not because it causes riots, but because it can be incredibly damaging to individuals and because it is costly to the country as a whole.
For individuals, youth unemployment can have ‘scarring’ effects on their future employment prospects and wages. Youth unemployment can also be costly for the national economy, both in terms of lost productivity, but also higher welfare costs. It has been estimated that the current societal cost of 16 – 18 year olds not in education, employment or training (NEETs) is between £12 and £32 billion.
Recently, there has been some debate and disagreement over how well the official figures represent the scale of the youth unemployment (due to rising numbers of young people in education). Iain Duncan Smith wrote to the Office for National Statistics to report his feeling that their published data was an over estimate of the problem
However, even if you exclude all those in full-time education (and it’s questionable whether you should) you are still left with 644,000 unemployed 16 to 24 years olds. It is also worth looking at the number who are NEET; there are currently estimated to be 925,000 16-24 year olds who are in this group in England alone.
Putting aside arguments about the scale of the phenomenon, there are two further trends that suggest it is a problem we need to take much more seriously. Youth unemployment was getting worse even before the recession, and the problem remains heavily concentrated in particular parts of the country.
The UK’s youth unemployment problem has been exacerbated by the recession rather than caused by it, youth unemployment was on an upwards trend already. This suggests that it is very unlikely to be solved by jobs growth alone and that a range of policy measures are also needed to reduce the numbers of young people who are out of work.
There is also a clear geography to youth unemployment. For example the NEET rate among 16-18 year olds in Knowsley on Merseyside is four times that of Harrow. More generally the greatest problems tend to be found in parts of the North East, North West, the West Midlands and in some inner London Boroughs.
The Work Foundation is currently rolling-out a new Youth Unemployment research programme which is designed to identify policy measures which can lead to sustainable reductions in the number of young people who are out of work. Now is the time to focus on solutions.
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