Show Hide image

The lost Muslim generation

The jobless rate for young, unqualified Muslims is approaching 40 per cent.

We had the most enormous rainstorm in Florida last night and everywhere flooded. And it isn't even hurricane season. Good job that our house has stilts. We are OK until the water rises ten feet, but then we will be in big trouble, so fingers crossed. Maybe I should invest in an inflatable boat and paddles, just in case. This is the equivalent of preparing for a black swan event, but it seems a good idea given what has happened over the past couple of years.

The election storm clouds appear to be gathering in the UK. The Conservatives' flip-flopping over plans for immediate cuts in public spending came under attack from Peter Mandelson, Labour's Secretary of State for Business, Innovation and Skills, who said that their economic policy is a muddle. The Financial Times seemed unconvinced by the "faltering Tories", arguing in a leader that the pace of spending cuts should be contingent on growth. "In the heat of a campaign," the FT went on, "only clear, coherent and consistent policy is defensible. It benefits no one for one party to repeatedly shoot itself in the foot. The Conservatives must get a grip." Exactly.

In an attempt to end the confusion over his party's policy, the Tory shadow chancellor, George Osborne, set out an eight-point plan. But it was full of generalities, lacking details on how any of them might be achieved. Nobody was the slightest bit convinced, including me.

Then Osborne announced that the fine economist Nicholas Stern was to be the Tory party's adviser on all sorts of green economic stuff. Such an appointment would help to add some much-needed credibility. Green jobs are going to be important. However, it would have been better if the Conservatives had cleared this with Lord Stern first, as he promptly denied he had agreed to do any such thing. Shambles!

Figures just in

I was struck by three important bits of economic news in the past week. First came figures showing that growth in the UK service sector stalled at the beginning of this year. Rates of expansion were the slowest for five months, and there was a further decline in employment. Maybe the lack of activity and new business had something to do with all the disruptions caused by the snow, but it certainly didn't augur well for the future. These figures were much more downbeat than the equivalent results for manufacturing, which has benefited from falls in the exchange rate.

Second, a survey on job placements suggested some slowing in the labour market. Third, stock markets around the world fell again after an unexpected increase in US jobless claims and amid growing concern over European sovereign debt, especially in Greece, Spain and Portugal. Greece's biggest trade union approved a mass strike and tax collectors staged a 48-hour walkout. There are growing fears that the debt crisis will spread.

Then the National Institute of Economic and Social Research (NIESR) published a new forecast suggesting that UK growth will be lower than it had predicted. Its chief forecaster, Ray Barrell, cautioned - correctly, in my view - that what was needed was a fiscal expansion now and a fiscal contraction at some point in the future. The institute said that unemployment will continue to rise through 2011, reaching 2.9 million (more than 9 per cent), and noted that the labour market has been much weaker than headlines have suggested because of the cuts in hours and decline of full-time jobs. The announcement of further job losses at Shell, following a poor set of results, added to the gloom.

That set me thinking about who has been most affected by the recession in the UK. It is well known that young people have been hit especially hard by rising unemployment, as have the least educated and minority groups. Young people without qualifications from minorities are the worst hit. There is also a regional dimension. Unemployment rates are higher in the West Midlands (9.6 per cent) and the north-east (9.8 per cent) than in the south-east (6.2 per cent), East Anglia (6.3 per cent) or the south-west (6.4 per cent).

Given that this week's New Statesman is a special issue on Islam, it seemed appropriate to examine how British Muslims have been affected by recession. I decided I should look at the recent information and lay out the facts, which is always a good starting place for a data hound like me. The most up-to-date information available is from the UK Labour Force Survey for the first nine months of 2009, which covered roughly 160,000 members of the workforce, including just over 4,000 Muslims.

Blanchflower table

Sign of hope

Muslims are more than twice as likely to be unemployed than the national average (16.4 per cent, compared to 7.7 per cent). (The unemployment rate among black people is even higher, at 17.9 per cent.) Worryingly, unemployment is especially high among young Muslims under the age of 30 (23 per cent), which is again higher than the UK average for young people (17 per cent), although less than for young black people (29 per cent).

The jobless rate for the least educated young Muslims - those with no qualifications - is even higher, approaching 40 per cent. One encouraging sign is that a considerably higher proportion of young Muslims under the age of 25 are students than is the case for non-Muslims (36 per cent and 19 per cent, respectively).

It is important that public policy is designed to ensure that Muslims in general, and young Muslims in particular, do not become further marginalised. Joblessness would be much higher among Muslims without the labour-market measures implemented by the Labour government. A lost generation of young Muslims would be very bad indeed, for all of us.

David Blanchflower is Bruce V Rauner Professor of Economics at Dartmouth College, New Hampshire, and the University of Stirling

David Blanchflower is professor of economics at Dartmouth College, New Hampshire, and a former member of the Bank of England's Monetary Policy Committee 

This article first appeared in the 15 February 2010 issue of the New Statesman, Everything you know about Islam is wrong