Current and Future Effects of Youth Unemployment

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In the early 80s I worked with unemployed young people in Wolverhampton. It had a profound impact on me as I witnessed a generation denied the life chances and opportunities they deserved. Youth unemployment continued to rise for four years after that recession. A recent poll for the Independent on Sunday reveals that 8 out of 10 people believe it’s harder for youngsters to get a job now than 20 years ago. Three quarters want a tax on bankers’ bonuses to help fight youth unemployment.

 There are 31,000 more chasing work now than last summer with youth unemployment hovering around the one million mark; that’s one in five without work. In Birmingham 13,000 young people are without work or training. OECD data shows we compare poorly with competitors in tackling youth unemployment and NEETS (those not in education, employment or training). Youth joblessness here is more than double that in apprenticeship nations like Germany and Switzerland. Unemployment at a young age can impose a wage scar of 8% and 15 % for the duration of the working life.

 One of the government’s first actions was to scrap the Future Jobs Fund. They claimed it was inefficient but we’ve seen no effective replacement and youth unemployment continues to grow. It’s estimated that £600M could fund a jobs and training programme for 100,000 young people; about 10,000 would benefit in the West Midlands. It’s not enough but it’s a start. Instead of taking action like this the government is abolishing the Connexions service and leaving young people to fend for themselves.

It’s true that Government initiated the National Citizen Service which offers 10,000 places for 16 year olds but this is a 6 week programme. They want to create 100,000 more apprentices but only 8% of small companies have taken on an apprentice in the past year while figures for 2008 show that nearly half of all apprenticeships were in businesses with fewer than 50 employees and of course most of the new Government apprenticeships are actually aimed at those over 24. The FSB (Federation of Small Businesses) argues that more needs to be done. They’ve suggested a National Insurance holiday and limited wage support. They’re concerned about bureaucracy and call on the government to re-engage with ATAs (Apprenticeship Training Agencies) which help small and micro businesses take on apprentices by taking over the training and administrative responsibilities for them.

There are some good signs, 25% of Tesco’s workforce is under 25 and they’re providing 3000 work experience placements and also recruited 335 graduates last year. And, competitors the Coop plan 2000 apprenticeships over the next three years but youth unemployment remains a scar.

We need an immediate jobs and training programme which should be funded from a tax on bankers’ bonuses and a proper careers and guidance service. Government should encourage others to follow the examples of large retail chains but they should also listen to the FSB, particularly in relation to ATAs. These measures would show that the government cares and is not prepared to sacrifice a generation as so cruelly happened in the 1980s.

Steve McCabe MP

Birmingham, Selly Oak

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