Our news cycle is in déjà vu. The young people who can’t find jobs are making the rounds again. We’ll probably hear from them every six months for the next decade, wearied from hundreds of applications as they recount their trials over the phone to James O’Brien. Every major outlet has been on the trail; while covering the story this week, a BBC journalist said she was inundated by more case studies than she could comfortably cover. This time the coverage is all down to the ONS’s Labour Force Survey, which officially puts youth unemployment at 16.1 per cent – among the highest figures in Europe. We’ve almost risen above Greece, whose young people live in the shadow of the continent’s biggest financial crisis in recent history.
The stories are the same as they were last summer. Graduate schemes have a higher ratio of applicants to places than ever before. Those who lose out on the career progression and security of salaried work can no longer rely on minimum-wage retail and hospitality roles, which are nearly as hard to get. We must think of this as the tip of the iceberg; even one hour of paid work a week will factor you out of the 16.1 per cent. Many more in the 18-24 age bracket are on insecure part-time contracts, and in roles for which they are vastly overqualified.
Now there’s added furore about the Plan 2 student loan system, which only floated into the public consciousness last month. Most recent graduates have signed themselves up for a monthly pay cut of 9 per cent, with interest of inflation plus 3 per cent. You won’t have to pay the loan back until you get a job at a reasonable graduate wage: in April, this threshold is set to rise to £29,400. But interest will pile up regardless of how much you earn. Ambitious graduates stuck in the unemployment hole will see an exponentially larger bill once they do find work, even if they had little say in the matter to begin with.
Labour’s main voter base is both immobile and discontent. So why isn’t the government listening to them? A recent Commons debate about youth unemployment saw almost universal finger-pointing. The shadow cabinet gestured at Labour’s national insurance hikes; Labour MPs tried to fend off criticism by pointing to a £820m, three-year-long “youth guarantee.” From April, the government will offer 55,000 six-month industry placements to 18-21-year-olds on universal credit who have spent more than 18 months looking for work.
The initiative is set to expand, but with nearly a million economically inactive young people in the country, it remains a drop in the ocean. The pledge only includes 25 hours of work a week, which qualifies as part-time: it isn’t clear how six funded months will amount to anything but increased churn. And by age-gating the policy, Labour has managed to sidestep the growing problem of unemployed graduates: someone finishing a three-year degree course at 20 will already have aged out of the scheme after 18 additional months of job hunting.
This is too little, too late. A robust fix would likely involve a universal system of incentives to hire and train, lowered NI and business rates, and increased local investment. A funded investigation into online jobseeking would likely see economic payoff: if there’s one consistent theme in current coverage, it is that jobseekers are wasting time completing lengthy applications for employers who will never acknowledge receipt.
None of that matters: if you’re in government, a “youth guarantee” both shields you from the shadow cabinet and provides a useful stick with which to beat the unemployed. It is convenient to simply claim that young people don’t want to work; that our fading economy is a matter of personal responsibility and not institutional failure. In this scenario, a shadowy job market with an unclear number of vacancies only helps Labour.
When Pat McFadden, the Secretary of State for Work and Pensions, went on a media round in December, almost every headline had him forcing reluctant twentysomethings into the workplace. On the BBC, the threat was that young people would “lose benefits if they turned down work;” in the Times, McFadden battled a “silent welfare disease”.
The point is to retain voters by turning them against their own children. But Labour’s illusion falls apart as soon as anyone points out how hard it is to find a job; the issue is far from exclusive to the 18-24 age bracket. McFadden would help himself by simply acknowledging the scope of the problem and recognising the limits of Labour’s policy, which is myopic at best. The powerlessness wrought on young jobseekers will probably lead to long-term mental health costs, defeating the point of raising NI in the first place. Labour can either make a sustainable investment in the job market or keep plugging the gap with universal credit. What might be money-saving decisions today will turn into disasters tomorrow.
[Further reading: Based Labour wants to take back control]
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Subscribe here to commentThere is much to agree with here but making labour more expensive is necessary to reduce the welfare budget and to improve productivity, the latter is an area of major British failing. We have also over produced graduates, no economy has 40-45% of total employment requiring graduate status, and those with high skilled work forces often effectively use day release to hit high graduate levels in the work force, Germany being a good example. The level of interest charged on some student debts is politically unsustainable. With an ageing population we need more young people in work, yet we have raised the school leaving age and induced nearly half of young people to go full-time to university and run up huge debts.