Opinion: Tackling the elephant in the room – youth unemployment

For the past year or so, there has been an elephant in the room – youth unemployment. It had largely been ignored by the Coalition Government, not because of desire, but because no money was left to alleviate the problem. However, after last week’s news that youth unemployment rose to 1 million, it was clear something needed to be done.

I’m glad that the Government will now be investing a whopping £1billion in training and incentives for young people to get employed.

In a recession, those who don’t have experience and/or training (who tend to be young people) are those who are hit the most by the lack of jobs. Companies simply don’t have the resources to employ, then train, someone new to the profession, whatever it may be.

The Government will stump up for every young person employed half the youth National Minimum Wage for six months – £2275.

The Youth Contract will provide 160,000 subsidies in this form. It will also fund a quarter of a million Work Experience opportunities for any young person who has been on Job Seekers Allowance for 3 months.

Many Labour supporters have already said this is just a rehashing of the Future Job Fund. I dispute this. All opportunities will be in the private sector, and therefore helping to generate growth. This is also a contract: the recipient has to work hard, otherwise face being placed on the Mandatory Work Activity – effectively a Work Boot Camp, in return for the opportunities given to them. And while the Youth Contract will focus on providing sustainable and long term success, half of those who used the Future Jobs Fund went back onto JSA and other benefits after a month of completing the programme.

Youth unemployment is a big issue, perhaps the biggest we now need to contend with. The Youth Contract is a positive step in the right direction and I hope that the Government will continue to invest in young people.

Harry Matthews is a member of the Liberal Youth Executive.

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10 Comments

  • You have NO answers to unemployment amongst English people full whether it be youth unemployment or otherwise.

    The reason being your party supports mass immigration which holds down wages for the poorest whilst enriching the rich. You also allow “British” business to discriminate against English people by allowing them to imlport cheap labour and employ them first in order to do so.

  • Companies simply don’t have the resources to employ, then train, someone new to the profession, whatever it may be
    All opportunities will be in the private sector, and therefore helping to generate growth

    1. If the private sector sees demand and potential growth they will employ staff and pay them

    2. if they see falling demand and no potential growth they will jump at a cheap way to help stack the shelves.

    For goodness sake stop slapping yourself on the back – all the smooth talk about this scheme ‘focusing’ on sustainable and long term success will mean simply squat if there is no demand for jobs to go to in two years time. You are jumping for joy because a billion pounds sounds a jolly lot of money but two sentences later without irony pointing out that people will be employed for half the youth minimum wage to be sent to work.

    The Party’s neoliberals hitched themselves with glee after the election to Osbourne’s vision of a private sector replacing lost jobs – it quite plainly isn’t happening (just as many a sobre commentator predicted) and here we are reaping the whirlwind. I would like to see those same people back here now explaining now the price is now £2275 per young person how this spending of taxpayers money is helping deficit reduction.

  • IMHO, the Government should never have scrapped the Future Jobs Fund. I see this announcement as a reform of that programme, not a completely new approach.

    Huge shame it took a year and rising unemployment to jolt the Tories out of complacency. A generation doesn’t lose itself, it gets lost intentionally.

    The government now has to bite the bullet and fully flesh out structural changes to the labour market over the next few years to make this kind of subsidy obselete, instead of referring to the discredited, useless Work Programme.

  • peebee –

    By your logic, the private sector should have been employing young people between at least 2004 and 2007, during a period of demand and growth, and yet that was not the trend as youth unemployment rose.

    Do you know what the NMW is for apprentices?

  • Please explain how giving a 50% wage subsidy to some of the biggest companies in the country is a good thing?

    If Tesco can employ lots of people on a 6 month contract, and get 50% of their wages paid then they will do this. They will not do this because they want to give youths a chance in the workplace. That is not their role, their role is to maximise the wealth of their shareholders.

    Surely you aren’t so blinded by party loyalty that you can’t see this for the naked corporatism it is?

  • 1) If immigration has caused youth unemployment, we would expect areas with high rates of inward migration to have the highest youth unemployment. That is not the case. This is why very few economists think that immigration has destroyed jobs overall.

    2) If you are aged under 19 you are more likely to be employed if you live in Britain than if you live in the US, France, Germany or ***any other major economy in the world*** (OECD – Labour force by sex and age – http://stats.oecd.org/index.aspx?queryid=24861). Low rates of youth employment here are terrible – but the position is worse in other places. When you are already doing better than almost every other place you should be cautious about expecting too much from any govt scheme. I wish it were otherwise.

  • There are jobs, but they are not necessarily where the young people are living. Young people are trapped by the high cost of housing and the high cost of transport, whether public or private, and by the patchiness of public transport.

    @TimL, your immigration argument is overly simplistic and I suspect you know it. The reality is that immigrants are more willing than locals to take jobs that are below or well below what their educational attainments would justify, because for example – they have other motives for being here which compensate for lack of pay and harsh living conditions – like for example – a desire to improve their English.

  • Matthew Huntbach 28th Nov '11 - 4:39pm

    Alistair

    The reality is that immigrants are more willing than locals to take jobs that are below or well below what their educational attainments would justify, because for example

    I think we can put it another way – why should a business here employ someone from the UK who is in the bottom quartile of ability when they can employ someone from another country who is in the top quartile? Ability here may not mean natural ability, it may also include ability after being educated.

    Or why should the people at the top here pay tax to educate British youngsters when there’s other countries who will tax their people to educate their youngsters, and British companies here can just take their pick of them?

    It does seem to me that while British employers bemoan the poor standards of British youngsters, they don’t seem willing to do that much to improve it – certainly not as far as paying more taxes. This does seem to be connected with the lack of loyalty to this country and its people from those at the top, as also shown by their constant use of the threat to flee and take their money elsewhere if their privileged existence is threatened, even in this country’s hour of economic need. This is a mark of the huge social division which has opened up in this country, so those at the top don’t see those at the bottom as somehow part of the same community as them, and so instead just sees them as a resource to exploit or not, no different from any other resource or any other people.

    From this I am increasingly coming to see that the best way to view this country is as a colony – it is run by people who don’t have true long term feelings for it, they say they are modernising it to make it competitive but sometimes that modernising looks like exploitation, if the natives the uppity they’ll bring in indentured labour to do the dirty work, they’ve left the local tribal leaders in place but bought them off, taken away much of their power, and engineers things so only those tribal leaders most friendly to them stay at the top, and they’ve wrecked the local economy by specialising it so that for the essential of life the natives are dependent on imports, which the colonists control.

    LibDems find it difficult to talk about these issues and see these problems for fear it can come across as “racist”. The result is actually to turn people towards the racists when only the racists are talking about them. We should count ourselves luck that our local racist parties are so incompetent they have not managed to make headway – one of the best cures for BNP-voting is to see a BNP councillor in (in)action.

  • Alastair – sure, immigrants are willing to do jobs locals dislike. But immigrants then spend (most of) their incomes locally, give work to locals. And they may keep some jobs in the UK because a half-native born, half lower paid immigrant workforce may be cheaper than offshoring, when a completely local labour force would not be. In that case by taking job A the immigrant saves job B for a local, when otherwise A and B would go abroad. I stand by my statement: the best evidence is that immigrants have no effect on aggregate employment, plus or minus.

  • Matthew & Tim – thanks for your responses. I am interested in this area for a number of reasons. Firstly my wife is is not a UK Citizen and my kids have dual nationality, hence I know socially many people especially from accession states. Also, for my sins – my work in IT has brought me into situations where systems are deskilled and sometimes made available in multiple languages to enable employers to hire people without local labguage skills (I’ve seen this in UK and in Holland). Like anyone else who has worked in IT I’ve worked on quite a few projects involving offshoring and onshoring. One observation is that when it comes to offshoring, no matter how many people are imported into our workforce, there will always be offshoring centres abroad that appear considerably cheaper. Another observation is that for some jobs that can’t be offshored, eg in Logistics, or catering and hospitality, jobs that in the past were the preserve of local people with relatively low educational attainment are increasingly going to non-locals – often those very well educated. We need to be creative in developing our economy so that there are jobs for the people that come through our schools. Labour tried expanding Higher Education but that has still left us with a legacy of high youth unemployment. I’m not really convinced that this new policy will work either. I don’t really see that much sense in us having coffee shops staffed by economics graduates and engineering graduates working as security guards. We need to develop the flexibility of our economy to make the best use of the talents of all the young people living here, wherever they are from, and flexibility for me means things like public transport, realistic housing costs and access to retraining, rather than attacking employment rights.

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