Saturday 14 April 2012

Youth unemployment

From The Guardian:

Next week's unemployment figures are likely to reveal another increase in the number of young people who have found themselves out of a job as a result of the UK's non-recovery.

But it's not just the shocking tally of more than a million unemployed 18 to 24-year-olds that should worry us. Jonathan Portes, director of the National Institute of Economic and Social Research, points out in a new blogpost that there has been a very sharp rise in the number of young people who have been claiming unemployment benefit for more than a year. There were just 6,000 in 2008, but that has increased by more than eight times to just short of 50,000.

Portes argues that this can't be explained by the weakness of the recovery alone; it coincides with the deliberate winding down of Labour's future jobs fund, which was providing subsidised work for more than 41,000 young people in July 2010 just after the coalition came to power, and only 900 by late last year. At the same time, the government has slashed the number of young people receiving a government training allowance, from almost 25,000 in mid-2010 to 4,200 in October 2011.

Yes, in most recessions it seems to be young people who are most likely to be affected by unemployment, as it is always harder finding a job than simply not losing one. Many of each recession's fresh generation of jobless never quite manage to get back into work, so each recession adds another layer of jobless people, so each successive recession hits a bit harder and the residual number of unemployed goes up each time.

The Guardian is quite wrong to imagine that this is all down to the government scrapping the "future jobs fund" or "government training allowance", it is the whole tax and regulatory system which is geared up to keeping the economy running at well below the optimum and thus keeping unemployment painfully high - and it just so happens that young people are most likely to be affected, as per usual.

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