David Miliband is spot on in highlighting the structural roots of youth unemployment

David Miliband is right to draw attention to the youth unemployment emergency as one of the most pressing issues facing the UK, writes IPPR’s Tess Lanning.

 

David Miliband, speaking on the Today Programme this morning, is right to draw attention to the youth unemployment emergency as one of the most pressing issues facing the UK writes Tess Lanning, research fellow at the Institute for Public Policy Research (IPPR)

Launching the final report of the commission on youth unemployment that the former Labour cabinet minister chairs, Mr Miliband importantly drew a distinction between the current lack of demand for young people’s labour, and the deeper, structural problems in the nature of the education system and the labour market that mean youth unemployment has not fallen below half a million since the 1980s.

The dramatic social and economic changes of the 1980s saw the transition from learning to earning become longer and riskier. Deindustrialisation led to a decline in the availability of routes into skilled work for young people, such as apprenticeships, making it more difficult to move straight from school into work.

Good jobs in manufacturing (albeit mainly for young men) have been replaced by low skilled jobs in the service sectors, many of which by their nature – casual, insecure – lead to a more protracted transition and offer few opportunities for progression.

The drop in demand for labour after the global financial crisis exacerbated these long term trends leading to high unemployment among university graduates as well as school leavers.

First in are often first out, and as a result young people were hit harder and faster than more experienced workers.

The pace of redundancies has slowed, but the deteriorating outlook for demand, reduced business confidence due to austerity at home and turmoil in Europe, and a reluctance to recruit new workers have all contributed to the continued upward curve in youth unemployment. Indeed the unsung difference between how European countries have fared since the downturn is not growth levels but unemployment.

Youth unemployment is most alarming in the Mediterranean states such as Spain, where over half of all young people are unemployed. But other northern European countries have long had lower rates of youth unemployment than the UK, and in Germany the proportion of young people out of work has actually fallen since the economic downturn.

The ‘chaotic’ landscape of support for those who do not choose the academic route is partly responsible for this difference, as Miliband’s commission argues.

The strong apprenticeship systems in the German-speaking countries and high quality vocational education in the Scandinavian countries play an important role in preparing young people for work and responsible adulthood, as well as providing them with broad qualifications that support mobility and progression in the labour market.

In contrast, most of the recent increases in apprenticeship numbers in England have occurred for older workers in the low-skilled sectors where concerns about quality are most acute.

The structural youth unemployment problem will remain unless employers’ enthusiasm for hiring and training the next generation of workers improves. Forthcoming research by IPPR calls for a radical new approach to skills and the labour market designed to raise employer commitment to skills and training.

The lesson from other northern European countries – where many firms train more, and to a higher standard, than comparable British firms and sectors – is that this requires far more than education or welfare reform.

Raising both the quantity and quality of jobs and apprenticeships available to young people requires a return to an active industrial policy, with a combination of hard and soft measures to help firms to rethink the low road competitive strategies that underpin weak demand for skills.

Until this is addressed the country’s increasingly well-qualified crop of young people will continue to compete for limited opportunities, with school leavers most likely to lose out.

While the short term priority must be to ensure a return to growth and rising demand for labour, we also need to think hard about those young people who won’t necessarily be lifted by a rising tide, or those whose prospects may have been permanently scarred by the recession.

The commission’s call for the public sector to fill the socialisation gap, offering more high quality apprenticeships and job guarantees for young people unemployed for more than two years, offers a useful starting point.

See also:

Ken stays ahead as Boris doubles-down on blaming young people for youth unemploymentAlex Hern, January 23rd 2012

2012: The year ahead for young peopleAlex Hern, January 7th 2012

Unemployment: How Cameron and Clegg are letting the next generation downRachel Reeves MP and Stephen Timms MP, December 14th 2011

Million young unemployed figure highlights enormity of the situation hitting our youthRory Weal, November 16th 2011

Clegg under fire over voter registration, party funding and youth unemploymentShamik Das, November 15th 2011

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