The Thorny Problem Of Youth Unemployment…

Jonathan Portes puzzles over the high level of youth unemployment:

Since 1987, the UK labour market has changed hugely – mostly for the better. It is much more dynamic and flexible, yet at the same time the protections for workers (for example, the minimum wage and laws prohibiting unfair discrimination) against exploitation and abuse are stronger. And overall, young people are better educated than at any time in our history.

They are? Really?

You might find that numerous people – many of them potential employers – would look askance at that…

So why is youth unemployment so high? Obviously, the most pressing problem is a lack of jobs, the result of macroeconomic policy failures. But the government is right to point out that youth unemployment was persistently too high even before the recession. So what's gone wrong?

And Jonathan trots out the usual suspects simply to dismiss them, one by one.

First it is worth busting some myths. It is not the immigrants; youth unemployment has risen just as fast, if not faster, in areas where there are few or no migrants.

It might not be the most significant factor, but it can’t be said to be completely off the table, surely? Chris Grayling certainly seems to believe it to be a factor…

It is not the minimum wage; research has repeatedly failed to find any significant negative impacts.

What research is that? He doesn’t mention any. Are we just supposed to trust him?

It is not the benefit system, which for young single people is very far from generous.

And yet many seem to be quite happy to exist on it, perhaps suggesting that they have access to alternative sources of income?

And it is not that universities are churning out unemployable graduates; graduates still do far better than other young people in the labour market.

Aha! Now we’re getting to the nitty-gritty…

Overwhelmingly, it is young people with few or no qualifications who can't find jobs.

Wait. What?

I thought you just said that we had a world-class educational system? How can this be, then?

So what should the government do? As a matter of urgency, it needs to find out why outcomes for young people have deteriorated so rapidly. And at a minimum, it should adopt the commission's recommendation for a part-time job guarantee after a year of looking for work.

A part-time job with….whom?

With local or central government? That’s a cost.

With businesses who sign up to some scheme? What’ll they want in return?

But it's not just about government, employers too have responsibilities: not to reject young people who want to work just because they lack experience or job-specific skills, to provide access to good quality training and to invest in their workforce.

That’s a cost on the business. Will prices rise to offset it? Common sense says they will.

And young people have a responsibility to make good use of the support that is on offer.
Work experience is a good example of how these responsibilities interact: new research by the Department for Work and Pensions (independently reviewed by the National Institute of Economic and Social Research ) shows that it works, increasing the chances of moving off benefit and getting a job. So it's reasonable to expect young people on benefit to try work experience…

Are we talking here about unpaid work experience? Because a few of your fellow CiFers might take issue with that!

More broadly, we need, collectively, to reject the logic that says it's economically sensible to keep unemployment unnecessarily high for unnecessarily long.

Who says that it’s sensible?