Employment is at record levels, and youth unemployment is almost half what it was during the last recession. But how can this be celebrated when young people are being locked out of the labour market for the long term?
We should be concerned about the 800,000 or so young people who are not in education, employment or training – the so-called “NEET” young people. At our panel event with the Centre for Social Justice at the Conservative Party Conference, I urged delegates not to forget about them in the triumphalism of our record employment levels. Now is the time to turn our focus on those furthest away from the labour market.
Firstly, there’s the simple economic reality that the flipside of high employment rates is skills shortages. There just aren’t the available workers to support the growth of British business, growth we need to be able reduce our debts and support our public services. Of course, we could import the skills we need from abroad; this could be easier and cheaper than training people ourselves for example.
But this is surely a waste of talent. Impetus focusses on young people under 25, and we’ve been doing some research using newly available government data that has enabled us to dig into youth unemployment in greater detail. We’ve found as part of our Youth Jobs Gap research that half of the young people who aren’t in work or education do not have 5 GCSEs or equivalent – the absolute minimum standard they need to succeed in an increasingly high-skilled economy. We cannot afford to ignore these young people. It is an economic imperative.
There is also, of course, a social justice imperative, and this is the second reason we need greater focus on the forgotten few. Our Youth Jobs Gap research has found that disadvantaged young people - those who qualify for free school meals while at school - are around twice as likely to be NEET as their better-off peers. Work should be a route out of poverty for these young people, but they are not getting the qualifications they need to succeed in the labour market. And even those who do still fall further behind than their better off peers.
What’s worse is that too often, unemployment doesn’t just mean “between jobs”. Even in an environment where businesses are increasingly crying out for new staff, too many young people spend too long outside the labour market.
We’ve released our 6th report in our Youth Jobs Gap series The long-term NEET population which found that 75% of young people who are NEET for more than three months are NEET for a year or more. We’re saying that NEETness is “sticky”. Put in simpler terms, if you hit three months NEET, the likelihood is you stay NEET.
This is a major problem for our society and our economy. It is a symptom of deep social injustice – young people from disadvantaged backgrounds are disproportionately likely to end up stuck in the NEET trap. The existing research shows that these long periods of unemployment, early in life, have long term scarring effects, reducing young people’s health and wealth many decades later.
So, the third reason why we should focus on the forgotten few is that if we don’t act quickly to support young people into work, the state will likely end up supporting them in one form or another, and for much longer.
Consequently, on this policy issue, the stars are perfectly aligned: the needs of our economy and the needs of our young people are pointing in the same direction. At some point, inevitably, there will be another recession. And when a recession comes, the opportunity to help these people passes. Unemployment rises, and the focus moves on to supporting a much larger number of people, in an environment where firms can take their pick of available workers. The people who can’t get jobs now, in the good times, won’t get a look in when times are tougher. Supporting them may not be a “do or die” issue – but it is now or never.