sam boyd | politics

Youth Unemployment: the only solution is growth

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Youth unemployment burst through the one million mark yesterday, reaching 21.9 percent of all 16-24 year olds – higher than at any point since records began in 1992. This represents bad but not surprising news for young people: youth unemployment begun rising steadily in 2004, spiked dramatically during the 2008 financial crash, and has been coasting towards its current record-breaking level ever since. It shows no sign of stopping.

It is in everyone’s interest to stem this tide. Such a huge amount of young people out of work costs taxpayers billions extra through higher welfare payments and losses in tax revenue. The problems that stem are social and psychological as well as economic: it is well documented that extended periods of unemployment at the beginning of a career can leave lasting scars on individuals and communities, creating pockets of long-term joblessness across the country that stagnate for generations. I’m all too familiar with the confidence-sapping drudge of successive months of unsuccessful job searching, as are many of my friends; to be doing it for over a year, as 260,000 young people have now been doing, will have damaging and potentially irreversible repercussions.

Unsurprisingly, Tory ministers have wheeled out the now familiar scapegoat of the eurozone crisis in order to explain away failings under their watch. Employment minister Chris Grayling duly appeared on Daybreak claiming that “youth unemployment was falling four months ago and was below the level at the general election, but since then we have seen the impact of the European crisis”. He also implied that there are enough jobs out there, if only people tried harder: there were 90,000 new vacancies every week in October, apparently.

Let’s put aside the fact that the real figure was 78,000 per week and they were mostly “elementary occupations” like shelf-stacking and street cleaning, and instead focus on the fact that in there are still 5.6 times more unemployed people than vacancies across the country. In the London borough of Haringey, there are 10,602 jobseekers and 413 vacancies – a ratio of nearly 26 to 1. Most importantly, the eurozone crisis only really hit about four months ago: the chief economist at the Chartered Institute of Personnel and Development told the Guardian that the time lag between economic events and unemployment changes is typically “six to nine months”. The logical conclusion does not bode well: “If there is going to be a significant impact [from the Eurozone crisis] we haven’t seen it yet.”

David Miliband, in his gradual slink back into frontline politics, has called for “extraordinary measures” to combat youth unemployment. Others rightly lament the abolishing of Future Jobs Fund, Connexions and EMA. But history shows that youth unemployment is properly reversed not by targeted programmes but by a general return to growth in the economy and the new jobs that result. On this crucial benchmark the government is palpably failing: growth is forecast to be just 0.6 percent next year. According to the Bank of England, there is an increased chance of the economy even sinking back into recession. Consequently, the Independent reports today that the government is set to borrow £100bn more than planned – higher than would have been necessary under Labour’s more gradual deficit reduction plans. These are damning verdicts of the coalition’s economic policies.

So whilst the government tries to blame the eurozone, let’s bear in mind that Germany, in the eye of the euro storm, has youth unemployment of just 9 percent. Let’s also reflect on the fact that the UK is forecast to grow slower than 19 other EU countries in 2012. Of course, the euro crisis will certainly affect our economy – 40% of our exports go to the eurozone. But can it really render us worse off than countries at the very epicentre of the crisis? Given the Tories recent record in successfully misleading the public over financial matters (“brink of bankruptcy” comes to mind), we must hope that this time the facts win out.

This article was also published on PoliticsStudent

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Written by Sam Boyd

November 17, 2011 at 5:08 pm

Posted in Politics

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