March 16 2011 - The notion of a 'lost generation' of young jobless people is simplistic, according to the latest Work Audit report on official labour market statistics "Getting the measure of youth unemployment"
from the Chartered Institute of Personnel and Development (CIPD).
There is no denying that the UK has a serious youth unemployment problem but the CIPD report concludes that
only a relative minority of young people is experiencing severe difficulty and the current situation is not worse than ever before.
The CIPD argues that the common perception that one in five 16-24 year olds are unemployed is based on a misinterpretation of the
official statistics.
Youth unemployment can only be properly understood within the context of much greater
participation in post-16 education over recent decades. Also, almost 30 per cent of young people classified as unemployed by the Office
for National Statistics (ONS) are actually in full-time education. The CIPD contend that it is
more accurate to say that one in eight rather than one in five 16-24 year olds are unemployed. The CIPD argues that the
ONS and the Department for Work and Pensions should issue a joint statement on the measurement of youth unemployment to help establish a better
informed policy narrative on causes of and solutions to the problem.
Dr John Philpott, CIPD Chief Economic Adviser said:
"The conclusion that 1 in 8 young people are unemployed rather than the frequently cited but misleading figure of 1 in 5 provides
no comfort to those without work. But a more realistic picture of the scale of the problem would help move the policy narrative beyond the
simplistic ‘lost generation’ rhetoric. Aside from ensuring that fiscal and monetary policy are conducive to growth and job generation the
principal policy focus should be on how best to reduce underlying structural youth unemployment which is probably close to the 9%-10% rate
observed prior to the recession and likely to persist even when the demand for labour eventually picks up.
"Especially worrying in this respect is the observation that core youth unemployment is not only far worse than desirable but
itself appears to have had been getting worse for a few years prior to the recession, suggesting that either the employability of the core youth
jobless is deficient and/or that the cost of employing them is too high relative to their labour market value. This implies the need for faster
progress on vocational skills and welfare policy, a thorough review of the effect of the national minimum wage on youth employment and an
assessment of the case for reducing national insurance contributions for employers hiring young people with limited skills."
