Youth biggest recession victims?
Unemployment among those aged 16 to 24 has soared to over a million, or 22.3% - a higher jobless rate than during the 1990s recession, official figures show. This is more than double the overall unemployment rate of 9%.
The parliamentary work and pensions committee has sprung into action and is investigating what can be done to deal with this crisis.
Those youngsters that have managed to find a job tend to be working in sales or customer service type roles, or as bar staff, cleaners, waiters and waitresses, according to government statisticians.
New data from the Office for National Statistics show that the employment rate for young people has fallen faster than for older workers since 2004, in stark contrast to the decade leading up to 2004 when youngsters had similar changes of being employed as those aged 25 to 64.
Young people earn around 42% less than older people - £7.01 versus £12.00 an hour excluding overtime.
The figures also show that 92% of students work part-time while a quarter of those who are no longer in full-time education also work part-time because they can't find a full-time job. Young women are more likely to work than young men if they are in education but the reverse is true for those who are not studying.
New research from Understanding Society, a study of more than 40,000 UK households, has found that young people suffer from a 'double penalty' in their attempts to find and keep a job.
Young people are far more likely than older workers to be laid off, and they are less likely than older people to find a new job, and so the average time they spend out of work has increased.
Dr Mark Taylor, a labour market researcher at the Institute for Social and Economic Research at the University of Essex, who analysed the data, said: "Young people are particularly suffering in this recession, with unemployment currently even higher than when this survey was conducted. The double penalty faced by young people is due to them falling victim to the 'last-in, first-out' policies that are used in practice by many employers. Then, on the other hand, young people tend to have accumulated fewer job-specific skills. Employers may feel that they lose less by letting young workers go and may also choose not to hire them because of the costs associated with training them."
In other words, it is a vicious cycle.
Before the latest recession, about half of 16-24 year olds who were not in work in 2006 had found a job a year later. This number halved during the recession, with just over a quarter of young people who were out of work in 2009 making the transition into employment by 2010.
Adam Posen, who sits on the Bank of England's monetary policy comittee, described youth unemployment as the biggest failure in the UK labour market at the moment. The parliamentary work and pensions committee has now launched an inquiry into youth unemployment and the government's upcoming Youth Contract.
The Youth Contract will be launched in April 2012 and will make almost £1 billion, in addition to existing funding, available over the next three years to provide new opportunities for young people in employment, education and training, including:
- 160,000 subsidised jobs. The Government will pay employers up to £2,275 for each 18–24 year old they take on from the Work Programme;
- An extra 250,000 Work Experience places. All 18–24 year olds who want a work experience place will be offered one before they enter the Work Programme;
- At least 20,000 extra incentive payments of £1,500 for employers that take on young people as apprentices;
- Extra support for young people through Jobcentre Plus, including weekly rather than fortnightly signing-on, more time with JCP advisers and a National Careers Service interview; and
- A new payment-by-results initiative focusing on 16–17 year old NEETs ["Not in Education, Employment, or Training"] with no GCSEs at grades A–C. Businesses will be invited to bid for contracts worth £126 million, in which payments of up to £2,200 will be offered for every NEET helped into education, an apprenticeship or work.
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