Saturday, February 26, 2011

Rising youth unemployment, low pay ? for teenagers it really is so unfair

In opposition the Tories were sensitive to the problems of youth unemployment ? now they just want to stand aside

Teenagers have an inbuilt tendency to believe that life is unfair; but the current crop have more to be angry about than most. Youth unemployment is rising much faster than among the workforce as a whole; they're facing the prospect of coughing up �9,000 a year to go to university; and the housing ladder is lifting ever further out of their reach, unless mummy and daddy have a few grand to spare.

One in five 16- to 24-year-olds, 965,000 of them, are out of work. That matters because of each individual story of lost chances, frustration and failing to make ends meet; but it also matters in the long term. Plenty of research over the years, including some from ex-Bank of England economist David Blanchflower, has shown that an early period of unemployment has a scarring effect that can last for the rest of a worker's life, depressing wages many years into the future, and increasing the chances that they end up back on the dole later on.

Education is failing to soak up those young people who might have found a job when times were good ? figures last week showed that the number of "Neets" ? young people not in education, employment or training ? swelled by 43,000 in 2010, to hit 938,000. In the West Midlands and the north-east, more than 19% of 16- to 24-year-olds are now in this category.

And research by Demos last week suggested that too many under-18s who stay on to do vocational qualifications such as NVQs find that when they leave, they either can't find a job at all, or if they do make it into the workplace, they are earning no more than they would have done if they had left school at 16.

Victims

In opposition, the Conservatives appeared to show great sensitivity to some of these challenges ? David Willetts researched the problem of the Neets and his book, The Crunch, revealed some of the historical social forces that have meant today's under-25s are getting a particularly raw deal.

Yet Labour's schemes to get young people into work, or nudge them into staying on in education, were early victims of George Osborne's budget-cutting zeal when the coalition came to power. The educational maintenance allowance, which goes to teenagers whose parents are on low incomes, has been scrapped; and the Future Jobs Fund, which offered subsidised jobs to young people, is being wound down.

These solutions were always going to be too statist for the Tories' taste, and they stress instead the increase in apprenticeships they want to see. But business groups say their members are not going to be ready to start hiring for many months; and even when they do, taking on an untested youngster who may never have set foot in a workplace is unlikely to be an appealing prospect, particularly when each year brings a fresh crop of graduates into the job market.

The wave of unrest in the Middle East is an extreme example of what happens when many thousands of under-occupied, disenfranchised young people decide they can't take any more. In Britain student protesters have so far done no worse than to give Prince Charles's car a bit of a kicking; but as unemployment continues to rise, so will many young people's desperation. Demos's Matt Grist is concerned that 20% ? the current rate of youth unemployment ? may become "the new normal". That will mean a very large group with no stake in the economy at all.

A new generation is starting to join the dots between, for example, bumper bonuses at the banks, large-scale tax avoidance by some of Britain's biggest companies, and the age of austerity being so painfully imposed on the rest of us. It is, as they quite rightly say, not fair ? and Osborne's doctrine that government must "get out of the way" and let the private sector flourish will cut no ice with those queueing outside the jobcentre. They may not be as organised as the "save our forests" campaign that forced the government into an embarrassing U-turn over its plans to flog off our woodland; but they have every right to be heard. Osborne should use some of the �800m windfall from increasing his bank tax this year to help young people into work. Demos is suggesting a cut in national insurance contributions for firms willing to take on young workers. That would be a great start.


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Source: http://www.guardian.co.uk/business/2011/feb/27/youth-unemployment-education-future

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