Youth unemployment: learning and earning

http://www.theguardian.com/commentisfree/2013/nov/20/youth-unemployment-learning-earning

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Growing up is always tough, and it is tougher than ever in a recession that eats away at decent jobs. Not many of the million or so 16- to 24-year-olds who don't go to college and don't have a job are willfully idle. But it's hard to get a job when you've had no experience, and harder still when you don't have the right qualifications. Both can be the unavoidable consequence of being young. So nearly one in five young people is unemployed. The difficulties of the under-qualified are compounded when the latest data from the Student Loans company, which monitors graduate incomes, shows that each year since the recession, new graduates are taking lower-paid jobs than those who graduated the year before and half of new graduates have taken non-graduate jobs, shrinking everyone else's options even further. The coalition is so conflicted about the best way of tackling the problem that in a rare move, Sir Jeremy Heywood, the cabinet secretary, has been asked to step in to assess which of the policies is making a difference. Where all parties seem to agree is that constraining access to benefits will be part of the answer. But a report from the IPPR thinktankon Wednesday suggests a more intelligent approach.

There are two crises going on here, and it's not clear whether they'll persist through economic recovery. The first is that the number of graduates is rising but the number of graduate-level jobs is still below the level it had reached in the year before the crash. Nearly half of those who graduated since 2008 are working in the notoriously low-paid retail and care sectors. There is a new tranche of figures due from the Office for National Statistics next week which might show whether the recovery is beginning to make a difference in graduate recruitment. But economists reckon it could take at least 15 years, about a third of a working life, for those who left university during the recession years to catch up.

All the same, graduates are still more likely to be working – nearly nine out of 10 have jobs – than non-graduates. At the other end of the scale, very nearly half of those who left school at 16 without five good GCSEs have no job at all. Nor are they in education or training. These so-called Neets must have been the target for more policy initiatives in the last 20 years than any other group in society. Each recovery finds a proportion of them back in work, but never enough of them. That was the issue Labour hoped their new deal for young people would tackle in 1997. And all the fair deals, contracts and work programmes that followed. Successive governments tinker with benefits-related incentives, trying to devise ever more complex incentives in what can seem little more than a macho contest for votes.

It's hardly a novel insight to suggest that at the core of the problem is the hole that opens up at the feet of too many 16-year-olds when they leave school. They may not have good enough exam results, or the right ones. They may never have had access to the kind of training that would make them more employable. They may have had little or no useful work experience. But nor is there a single funding source that would give them the scope to get it right. The IPPR suggests replacing the existing out-of-work benefits for 16- to 24-year-olds with a single payment that could be used to fill the unfair gap in funding for school leavers. It could be what's needed to make a reality of a commitment to raise the status of technical education, and it could drive reform of further education and vocational training. Rachel Reeves, the shadow work and pensions secretary, may come to regret ruling it out quite as swiftly as she did on Wednesday. There is a difference between withdrawing jobless benefits and redesigning a payment so that it suits the needs of a very particular group.

The way the state supports young people is part of a far more complex equation. A long-term solution means tackling the shortage of quality apprenticeships, the decline of manufacturing and the growth of a huge low-skilled service sector. But the system has failed a generation of young people. They deserve better.

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