Jobs promise guarantee needed to tackle youth unemployment

Photo by Evangeline Shaw

Youth unemployment is soaring both in the North and elsewhere. The number of young people classed as Not in Education, Employment or Training (NEET) has hit 800,000 and is higher in the UK than in many comparable nations. Now the socio-economic impact of Covid-19 means that unemployment in general – and youth unemployment in particular – is predicted to rise to a level last seen in the 1980s.

For individual young people, there are significant multiple ‘scaring’ effects associated with spending very long periods of time outside education and work. These include a loss of confidence and self-esteem; greater vulnerability to various limiting illnesses, including mental health problems; increased propensity to crime, and excessive use of drugs.

As Prof Robins Simmons notes NEET young adults are also at greater risk of long-term unemployment and tend to earn less than their peers if they do find work. There are, however, wider social and economic costs linked with high levels of youth joblessness. Tax revenues are reduced with significant extra expenditure on health, social services and welfare benefits.

Any responsible government should be concerned over the situation. Last July a £2b ‘Kickstart programme’ for jobless young people was unveiled promising high quality jobs with meaningful training. Although this sounds bold and aspirational, Kickstart in essence is a six-month scheme of work placements paid at the National Minimum Wage (NMW). True, for several youngsters, a lack of work experience is a barrier to finding a job, even if they have good vocational qualifications. The NMW for those under 25 is lower than the ‘adult’ NMW of £8.7 which is, in turn lower than the ‘real living wage’ of £9.30 an hour.

 This means that Kickstart will effectively pay poverty wages but the fact that central government has pledged to cover 100% of the costs of providing placements is also problematic. We’ve been here before. During the 1980s, some unscrupulous employers used the Youth Training Scheme as an inexhaustible supply of free labour. According to the educationalist Dan Finn some YT trainees were used to displace exiting employees. It’s not unreasonable to expect employers to contribute at least something towards the cost of the programme which will after all boost business and strengthen the economy.

There are, however, big problems with Kickstart. The work placements are only available to 16 to 24-year olds in receipt of Universal Credit – and many NEET young people are not entitled to benefits. The programme promised just 250,000 placements for 600,000 jobless young people, of which fewer than 5,000 have yet been created.

There also appears to little ‘off-the-job-training’ associated with Kickstart. Although YT did involve mandatory periods of ‘off-the-job- training’, and while the quality of such provision was variable, many young people went to college and acquired worthwhile qualifications with labour market value during their time on the programme.

It is also worth noting the overall cost of Kickstart. £2b is a lot of money, yet the old YTS was launched with £3.5b of public funding. Meanwhile, the current Job Retention Bonus Scheme, which aims to encourage employers to keep furloughed workers, is predicted to cost up to £9b, even though the head of HMRC has slammed the scheme as a crude measure unlikely to represent good value for money.

Whilst the coronavirus pandemic will undoubtedly exacerbate youth unemployment ,we do need bolder measures to address the problem. Tackling this issue is no easy task. Labour’s Jobs Promise, based on its successful New Deal programme, guarantees all 16-to 24-year olds education, training or work. The New Deal for Young People and its  Future Jobs Fund in 2008 , managed to slash long-term youth unemployment.

Yet there needs to be a national organisation with regional outlets to stimulate jobs and promote robust education and training in key areas like green and renewable energy, infrastructure and public works, caring services, work with children and public services covering policing, fire and rescue, social and community work.

Please follow us on social media, subscribe to our newsletter, and/or support us with a regular donation