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Quack cures won’t stop the angry young taking to the streets

Our youngsters deserve better than the warm words of Osborne’s ideologues, intent on austerity.

Youth unemployment around the world is growing apace and young people are starting to be heard, with hundreds of thousands pouring on to the streets to protest about the seeming unfairness of it all and the lack of jobs. Free markets deliver the most efficient allocation of resources but their distribution may still be unjust.

The activism of the young has provoked an explosion of anger from the American right, including the likes of Rush Limbaugh, who so effusively supported the Tea Party. "These protesters, who are actually few in number, have contributed nothing," he said on his radio show. "They're parasites. They're pure, genuine parasites. Many . . . are bored trust fund kids, obsessed with being something, being somebody. Meaningless lives, they want to matter."

No reverse gear?

Scary stuff, but Limbaugh does have a point. I think the young are protesting because they do want to matter. It isn't their fault that there are no jobs. Youngsters need hope and too many have none, and that may come to haunt us all. As long as the protests remain peaceful, they are likely to have a big impact: governments worldwide are likely to get into trouble with their austerity agendas if the protests are joined by mothers with children and retired people.

Occupy Wall Street, the protest that started all of this, is apparently supported by most New Yorkers, according to a poll this month by Quinnipiac University. Sixty-seven per cent of New York City voters say they agree with the protesters' views; only 23 per cent do not.

In Britain, there is growing opposition to Chancellor George Osborne's refusal to accept the obvious - that his policies are directly responsible for the pain that young people are experiencing. A powerful editorial in the New York Times of 14 October, entitled "Britain's self-inflicted misery", stated that the coalition government's "quack cure" had failed:

Austerity was a deliberate ideological choice . . . It has failed and can be expected to keep failing . . . slashing government spending in an already stalled economy weakens anaemic demand, leading to lost output and lost tax revenues. As revenues fall, deficit reduction requires longer, deeper spending cuts.

Cut too far, too fast, and the result is not a balanced budget but a lost decade of no growth. That could now happen in Britain . . . Austerity is a political ideology masquerading as an economic policy. It rests on a myth, impervious to facts, that portrays all government spending as wasteful and harmful, and unnecessary to the recovery. The real world is a lot more complicated.

It is all so unnecessary. But I have a sense that change is in the air. People are waking up to the reality that growth has stalled and consumers have stopped spending. Bond yields are low because the economy is tanking.

The small growth of private-sector employment has not compensated for the collapse in public-sector employment as predicted by the government. Over the 12 months to June 2011, private-sector employment grew by 264,000, while public-sector employment fell by 240,000. It is worth noting that the Office for National Statistics (ONS) also produces estimates of what has happened to employment since then. Over the three-month period between June and August this year, employment fell by a further 178,000. It will be interesting to see the mix between public- and private-sector job losses in due course.

Data from the National Institute of Economic and Social Research published on 11 October does make it look as if the coalition may well be driving us into the second Great Depression. I have presented earlier versions of the chart (below), which now includes the most recent ONS data revisions. This version is alarming. It shows the decline in output from the starting point and how long it takes to reverse each setback. The present slump looks worse than any other in the past 100 years; it is comparable in depth to that of the 1930s, having fallen by over 7 per cent, but is of longer duration and still is far from over.

blanchflower graph

We are 44 months in and less than half of the output drop has been restored. It is clear what Osborne's policies have done. Recovery was proceeding merrily under the previous chancellor, Alistair Darling, but has shown little growth over the past nine months.

Add insult to injury

Youth unemployment hit 991,000 in August, with the unemployment rate in the 16-24 age group hitting a record high of 21.3 per cent. So what did the government have to say about this? Chris Grayling, the spin merchant and employment minister, who has responsibility for overseeing the new Work Programme, was sent out to blame anything but the government's failed policies. The line is that the increase occurred because of what was happening in the eurozone, and wasn't that bad, as nearly a quarter of a million were in full-time education. That was an insult to the young.

Let's look at this nonsense. First, there is no evidence that the recent rise in youth unemployment has anything to do with the eurozone. Rather, it has everything to do with a freeze in public-sector hiring, the squeeze on public spending and the removal of help for the young that the Labour government introduced, such as the Education Maintenance Allowance.

Second, unemployment among the young has always been calculated as the sum of those not in full-time education plus those in full-time education looking for work. That is how the EU calculates youth unemployment in all countries. Since May 2010, unemployment among 16-to-24-year-olds has risen by 67,000, from 924,000 to 991,000. Unemployment among those in full-time education has fallen by 24,000, from 293,000 to 269,000, while those not in education has risen by 91,000, up from 630,000 to 721,000. The unemployment rate of youngsters not in full-time education now stands at 20.2 per cent, its highest level since such data first became available in 1992.

Grayling speaks with forked tongue.

David Blanchflower is the NS economics editor and a professor at Dartmouth College, New Hampshire, and the University of Stirling

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

This article first appeared in the 24 October 2011 issue of the New Statesman, The art of lying

Photo: Getty Images
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What's to be done about racial inequality?

David Cameron's words on equal opportunities are to be welcomed - now for some action, says Sunder Katwala.

David Cameron made the strongest, clearest and most high profile statement about ethnic inequalities and the need to tackle discrimination ever yet offered by a British Prime Minister in his leader’s speech to the Conservative Party conference in Manchester.
“Picture this. You’ve graduated with a good degree. You send out your CV far and wide. But you get rejection after rejection. What’s wrong? It’s not the qualifications or the previous experience. It’s just two words at the top: first name, surname. Do you know that in our country today: even if they have exactly the same qualifications, people with white-sounding names are nearly twice as likely to get call backs for jobs than people with ethnic-sounding names? … That, in 21st century Britain, is disgraceful. We can talk all we want about opportunity, but it’s meaningless unless people are really judged equally”, said Cameron.
While the proof of the pudding will be in the eating, this was a powerfully argued Prime Ministerial intervention – and a particularly well-timed one, for three reasons.

Firstly, the Prime Minister was able to root his case in an all-but-universally accepted appeal for equal opportunities. It will always prove more difficult in practice to put political energy and resources behind efforts to remedy discrimination against a minority of the population unless a convincing fairness case is made that values cherished across our whole society are at stake. Cameron’s argument, that any party which tells itself that it is the party of the ‘fair chance’ and ‘the equal shot’ must have a response when there is such clear evidence of discrimination, should prove persuasive to a Conservative Party that has not seen race inequalities as its natural territory. Cameron argued that the same principles should animate responses to discrimination when it comes to race, gender and social class. Put like that, wanting job interviews to be fair – by eradicating conscious and unconscious patterns of bias wherever possible – would strike most Britons as offering as clear a case of the values of fair play as wanting the best baker to win the Great British Bake-Off on television.
Secondly, Cameron’s intervention comes at a potential "tipping point" moment for fair opportunities across ethnic groups. Traditionally, ethnic discrimination has been discussed primarily through the lens of its impact on the most marginalised. Certainly, persistent gaps in the criminal justice system, mental health provision and unemployment rates remain stark for some minority groups. What has been less noticed is the emergence of a much more complex pattern of opportunity and disadvantage – not least as a consequence of significant ethnic minority progress.

Most strikingly of all, in educational outcomes, historic attainment gaps between ethnic minorities and their white British peers have disappeared over the last decade. In the aggregate, ethnic minorities get better GCSE results on average. Ethnic minority Britons are more likely, not less likely, to be university graduates than their fellow citizens. 

As a result of that progress, Cameron’s intervention comes at a moment of significant potential – but significant risk too. Britain’s ethnic minorities are the youngest and fastest-growing sections of British society. If that educational progress translates into economic success, it will make a significant contribution to the "Great British Take-Off" that the Prime Minister envisions. But if that does not happen, with educational convergence combined with current ‘ethnic penalties’ in employment and income persisting, then that potential could well curdle into frustration that the British promise of equal opportunities is not being kept.  Cameron also mirrored his own language in committing himself to both a ‘fight against extremism’ and a ‘fight against discrimination’: while those are distinct challenges and causes, actively pursuing both tracks simultaneously has the potential, at least, depolarise some debates about responses to extremism  - and so to help deepen the broad social coalitions we need for a more cohesive society too.

Thirdly, Cameron’s challenge could mark an important deepening in the political competition between the major parties on race issues. Many have been struck by the increase in political attention on the centre-right to race issues over the last five to ten years. The focus has been on the politics of representation. By increasing the number of non-white Conservative MPs from two to seventeen since 2005, Cameron has sent a powerful signal that Labour’s traditional claim to be ‘the party of ethnic minorities’ would now be contested. Cameron was again able to celebrate in Manchester several ways in which his Cabinet and Parliamentary benches demonstrate many successful journeys of migrant and minority integration in British society. That might perhaps help to ease the fears, about integration being impossible in an era of higher immigration, which the Home Secretary had articulated the previous day.

So symbolism can matter. But facial diversity is not enough. The politics of ethnic minority opportunity needs to be about more than visits to gurdwaras, diversity nights at the party conference fringes and unveiling statues of Mahatma Gandhi in Parliament Square. Jeremy Corbyn’s first speech as Labour leader did include one brief celebratory reference to Britain’s ethnic diversity – “as I travelled the country during the leadership campaign it was wonderful to see the diversity of all the people in our country” – and to Labour bringing in more black, Asian and ethnic minority members - but it did not include any substantial content on discrimination. Tim Farron acknowledged during his leadership campaign that the Liberal Democrats have struggled to get to the starting-line on race and diversity at all. The opposition parties too will no doubt now be challenged to match not just the Prime Minister’s rhetorical commitment to challenging inequalities but also to propose how it could be done in practice.

Non-white Britons expect substance, not just symbolism from all of the parties on race inequalites.  Survation’s large survey of ethnic minority voters for British Future showed the Conservatives winning more ethnic minority support than ever before – but just 29 per cent of non-white respondents were confident that the Conservatives are committed to treating people of every ethnic background equally, while 54 per cent said this of Labour. Respondents were twice as likely to say that the Conservatives needto do more to reach out – and the Prime Minister would seem to be committed to showing that he has got that message.  Moreover, there is evidence that ethnic inclusion could be important in broadening a party’s appeal to other younger, urban and more liberal white voters too – which is why it made sense for this issue to form part of a broader attempt by David Cameron to colonise the broad centre of British politics in his Manchester speech.

But the case for caution is that there has been limited policy attention to ethnic inequalities under the last two governments. Restaurateur Iqbal Wahhab decided to give up his role chairing an ethnic minority taskforce for successive governments, unconvinced there was a political commitment to do much more than convene a talking shop. Lib Dem equalities minister Lynne Featherstone did push the CV discrimination issue – but many Conservatives were sceptical. Cameron’s new commitment may face similar challenges from those whose instinct is to worry that more attention to discrimination or bias in the jobs market will mean more red tape for business.

Labour had a separate race inequalities manifesto in 2015, outside of its main election manifesto, while the Conservative manifesto did not contain significant commitments to racial inequality. The mid-campaign launch in Croydon of a series of race equality pledges showed an increasing awareness of the growing importance of ethnic minority votes - though the fact that they all involved aiming for increases of 20 per cent by 2020 gave them a slightly back-of-the-envelope feel. 

Prime Ministerial commitments have an important agenda-setting function. A generation ago the Stephen Lawrence case opened the eyes of middle England to racist violence and police failures, particularly through the Daily Mail’s persistent challenging of those injustices. A Conservative Prime Minister’s words could similarly make a big difference in the mainstreaming of the issue of inequalities of opportunity. What action should follow words? Between now and next year’s party conference season, that must will now be the test for this Conservative government – and for their political opponents too. 

Sunder Katwala is director of British Future and former general secretary of the Fabian Society.