Spencer Thompson explores the issue of youth unemployment and why it is more and more young people are struggling to gain employment.
While today’s labour market stats showed some signs of employment growth, it appears that the green shoots taking hold in the wider economy are yet to translate into a sustained fall in the unemployment rate, which remains at 7.8 per cent. One area of on-going concern is the persistently high level of youth unemployment; the number of unemployed young people actually rose by 15,000 in the latest figures, with 973,000, or 21.4 per cent, out of work.
It has been widely established that the level of youth worklessness was growing even before the recession. But there is still disagreement about the root causes behind this, with commentators and policymakers pinning the blame on a host of different causes, from poor quality vocational education on offer, which seems plausible, to immigration and employment regulation, which do not.
One factor that I think warrants serious attention is the very low number of young people working while studying. In 2007, only 1 in 3 young people in education were also working. By 2011 this had fallen to 1 in 4. This means around three quarters of those leaving education are entering the world of work for the first time, not having developed what is often termed ‘employability skills’. This is the knowledge of how to look for work and be successful at interviews, as well as how to work alongside colleagues and with customers.
Why is this important? Well, once young people leave education, whether or not they already have something on their CV has a big impact on their chance of finding a job. During and after the recession in 2009, the unemployment rate among those young people who left education having had no experience of paid work was 23 per cent, whereas it was 14 per cent for those with some. This is even more important for young people with few qualifications. Among those with fewer than five GCSEs at A*-C, 1 in 3 without work experience are unemployed, against only 1 in 6 for those with some.
But, as noted above, fewer and fewer young people are leaving education with anything on their CV, meaning we have a growing number of workless youth with no experience of work. In 1998 there were 330,000 young people in the UK who were not in work or full-time education, and had never had a job. By the beginning of 2007 this had topped half a million, and at the beginning of this year stood at 640,000.
It’s a bit too easy to blame this on a growing culture of laziness among young people. I have not seen any evidence to suggest that this is the case. Equally as likely is the fact that there aren’t enough programmes of study, such as apprenticeships, that formally combine work with education. The boom in apprenticeship numbers in the last 2 or 3 years has mainly benefitted over 25s.
In addition, the economy is changing in ways that do not necessarily help young people. The decline in manufacturing has meant the share of young people working in the sector halved between 1995 and 2007. This has led to more and more young people coming into competition with older, more experienced workers for the customer-facing service sector jobs that are available.
Whatever is happening, having experience of the world of work matters for young people’s job chances. But current policy is doing little to help. Schools have a statutory duty to provide careers advice, but not enough funding to do so, and local authorities facing budget cuts have had to cut back on the Connexions service. And the help and support offered to young people through Job Centre Plus and the Work Programme is only available to those who are claiming unemployment or health-related benefits, missing out on around 2 thirds of NEETs.
With youth unemployment failing to budge, we need to do better to understand the risk factors that lead young people to face difficulties finding work. It is a simple truth that having done work in the past makes it easier to find and stay in work now. An important part of the youth unemployment solution is going to be reducing the number of young people that have never done work, by opening up opportunities for those in education to gain genuine experience, and encouraging employers to get involved and young people to participate.
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