Youth Unemployment

I was speaking last night at the AGM of our Skills Development Scotland Branch on the subject of youth unemployment. Hard to think of an audience that knows more about the subject than careers officers in this branch.

The jobless rate in Scotland stands at 231,000, with 88,000 falling into the 18-24 year old category, rising to over 100,000 when you include 16-18 year olds. The highest figure for a generation and an 83% increase since the economic downturn. Youth unemployment in Scotland is 3% higher than the UK average and increasing more rapidly. This is caused primarily by the recession and the UK government's austerity measures that are taking demand out of the economy through public service cuts, just at the time when they are most needed.

Youth unemployment in Scotland can be broken down into three groups:
• 35,000 in education while looking for work.
• 21,000 with minimal or no qualifications coupled with other disadvantages
• 44,000 with reasonable qualifications who in a stronger labour market would probably be in employment.

Let’s start by looking at some of the reasons why should we care about unemployment:

• Because of the lost output involved. During a long period of unemployment, workers can lose their skills, causing a loss of human resources to the economy.

• Unemployment is a stressful life event that makes people unhappy. It increases susceptibility to illness and loss of self-esteem, leading to depression and a higher propensity to commit suicide. It can also reduce life expectancy.

• The long-term unemployed are at a particular disadvantage trying to find work and the effects of unemployment appear to depend a lot on how long the person has been unemployed for.

• Unemployment while young, especially of long duration, causes permanent scars rather than temporary blemishes. For the young a spell of unemployment does not end with that spell; it raises the probability of being unemployed in later years and has a wage penalty. These effects are much larger than for older people.

• As unemployment rates increase, crime rates tend to rise, especially property crime. Studies have found that youth unemployment and adult unemployment are both significantly and positively related to burglary, theft, fraud and forgery and total crime rates. For each of these offence categories the relationship between youth unemployment and the specific crime was found to be somewhat stronger.

Unemployment among the young therefore contributes to the intergenerational deprivation highlighted by the Christie Commission and subsequent public expenditure. The lifetime cost of a single cohort of young people failing to make the transition into regular employment is estimated be in the region of £2 billion. It also drives inequality and the associated impact as set out by Wilkinson and Pickett in The Spirit Level. Recognising that it is not the only issue in cities like Glasgow as Carol Craig has highlighted in Tears that Made the Clyde.

What should the UK government be doing with the budget coming up this month? First and foremost we need a co-ordinated plan for growth, with a focus on tackling record levels of youth unemployment. We risk losing a generation of talented and highly skilled youngsters to joblessness and stunted careers unless the UK government rapidly increases investment in quality employment programmes.

The current cut-price, poorly-targeted and unpaid work experience schemes are not helping enough young people back into jobs so the government should introduce a guarantee of paid work or training for anyone young person who has been out of work for at least six months, as set out in the TUC submission on the budget. That submission also says that support for young people should not be restricted to those out of work and calls for the introduction of a new youth credit for all 16-24 year olds to boost access to training, work placements or progression into better jobs.

And what about the Scottish Government's response? They have appointed a new minister for Youth Employment who has published a draft strategy that says there should be:

• a clear and targeted approach to support young people as they look for jobs

• the development of opportunities within the apprenticeship programme

• targeted support to help young people get jobs in the energy and the low carbon economy

• support through the My Work Coach, which is under development by Skills Development Scotland

• and financial support to employers to encourage them to employ young people from disadvantaged groups

Through Opportunities for All the Scottish Government is planning to ensure that every 16-19 year old not in employment, education or training (NEET) has access to a suitable place in learning or training. In 2012/13 and in each year of the current Parliament they will offer 25,000 Modern Apprenticeship opportunities within an overall total of 46,000 training places.

There are many good aspects of this strategy but it is not consistent. The Scottish Government has protected Higher Education spending but Further Education budgets have been cut by 13.5% over the next three years - a £70million cut. The extra £15million recently announced still leaves a cut of at least £55million while the guarantee of a job education or a training place for all those aged 16 to 19 will restrict places available for those out-with this age group unless more places are available. Careers officers this evening pointed out that it is often introductory courses that are being cut. The very courses accessible to those young people without qualifications.

School leavers unable to find work, adults seeking retraining and cuts in courses mean there is increasing demand for fewer college places. Young people in particular are finding that increased competition leaves them unable to get places on college courses that similar young people have accessed in the past.

My audience of careers officers are the key professionals trained to ensure that people are able to make the right choices throughout their working lives. The careers service has seen a 50% increase in adults accessing their services during this recession with many adults seeking new skills as they lose jobs or see career prospects cut off by cuts. The careers service is facing increasing demands at a time where budgets are very tight. In fact SDS has been cut more deeply than other services with a further 150 posts going this year.

They are concerned that there is not adequate funding to meet the commitment of a place on training or work for all 16-19 year olds. If the young person is to benefit in the long term it needs to be appropriate and lead to a long term future job. It should not just be about the politics of keeping youth unemployment figures low.

New technology has allowed more people to access careers information more easily, but the My World of Work website is still only a website. New job titles like Work Coach don't even have job descriptions and there is an obvious suspiciion that this is simply window dressing to cover more service cuts. 

Many people face multiple barriers to employment and need the focused support of careers adviser. This involves in depth work with individuals who have complex needs. In the 14-19 age group many young people have already disengaged from education or are in the process of doing so. Guidance teachers therefore cannot replace the role of careers staff. Careers advice is a specific role and requires a range of skills and knowledge. It is about a lot more than showing clients some college prospectuses and telling them to clean up for job interviews.

Members are particularly concerned about Activity Agreements. The funding of the pilot scheme was much higher than the level available for implementation. Currently the focus appears to be more on having a positive outcome on paper rather than a genuine career path. Members feel they are just being used to mask youth unemployment.

In conclusion youth unemployment is a symptom of the disastrous economic policies being pursued by the ConDem coalition. In any recession it is usually the young that suffer the most. So the best strategy for youth unemployment is a growth strategy as set out in the Better Way campaign. This will be reinforced by the STUC at the demonstration at the Scottish Conservative conference in Troon on 24 March.

However, the Scottish Government does have powers to support young people and minimise the long term effects of unemployment. The draft strategy has many good features but it will be undermined by college and careers service cuts.