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Adnan Al-Daini

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Unemployment, Homelessness, and Debt: the Plight of the Young

Posted: 04/09/2012 13:10

It is not a good time to be young. Our youth are bearing the brunt of the economic depression and its self-defeating solution of austerity and cuts. The future to them looks bleak; unemployment, debt and homelessness in various combinations, or all three beckon. Of course these three scourges (unemployment-debt-homelessness) are linked.

Youth unemployment (16-24 years old) is now 20.7 % in the UK. The average across the EU is 22.4%, with Greece and Spain leading the misery index at 52.8 % and 52.7 % respectively.

A report entitled "Youth unemployment: the crisis we cannot afford" produced by ACEVO (Association of Chief Executive of Voluntary Organisations) puts the human cost thus:

"Unemployment hurts at any age; but for young people, long-term unemployment scars for life. It means lower earnings, more unemployment, [and] more ill health later in life. It means more inequality between rich and poor - because the pain hits the most disadvantaged."

The report quantifies the financial cost as follows:

"The human misery of youth unemployment is also a time-bomb under the nation's finances. At its current rates, in 2012 youth unemployment will cost the [British] exchequer £4.8 billion (more than the budget for further education for 16-to-19-year-olds in England) and cost the economy £10.7 billion in lost output. But the costs are not just temporary. The scarring effects of youth unemployment at its current levels will ratchet up further future costs of £2.9 billion per year for the exchequer (equivalent to the entire annual budget for Jobcentre Plus) and £6.3 billion p.a. for the economy in lost output. The net present value of the cost to the Treasury, even looking only a decade ahead, is approximately £28 billion."

A study in the US on the effects of unemployment on crime concludes:

"We find significantly positive effects of unemployment on property crime rates that are stable across model specifications. Our estimates suggest that a substantial portion of the decline in property crime rates during the 1990s is attributable to the decline in the unemployment rate."

"Unemployment sucks. Youth unemployment sucks even more", as one business school professor puts it.

Faced with such personal, societal and financial costs, the response of governments has been at best complacent, but more accurately described as negligent. You would think the scourge of unemployment would be prioritized and made central to any actions that are taken. Instead, governments have put deficit reduction at the centre of their economic policy, and ignored its impact on society.

It is no good saying the solution we are pursuing will in the long run produce the required result, not if it blights the lives of a significant number of our youth. As someone said "in the long run we will all be dead".

Moving to homelessness, according to figures published by the department for communities and local government, 48,510 households meet the definition of statutory homelessness in 2011, a jump of 14% on the previous year. Research for the charity Crisis, found that the vast majority of homeless single people are "hidden" and outside government statistics.

If you are lucky enough to go to university you will be finishing your course with a debt of around £53,000. With such debts, graduates will be reluctant to take additional debt in the form of a mortgage, and with the price of housing, most will not be earning enough to get a mortgage.

Additionally, scarcity of affordable rented dwellings will force many graduates to live with their parents, thus delaying their entry into adulthood and independence. What effect will that have on their self esteem, mobility of labour, and at what cost to the economy!

There is evidence that the rise in university fees is putting off students from modest and poor backgrounds, which will impact negatively on social mobility, thus deepening the income inequality and division in our society. Reversing the rise is a good investment in Britain's future.

Investing taxpayers' money in massive building programmes of affordable housing would provide work for many of our young, and would help with labour mobility. It would provide for a basic need, and would prove cheaper to the taxpayer in the long run.

Loading most of the misery of the economic depression on our youth is morally wrong, economically mad, and eventually self-defeating.

 

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08:02 PM on 09/18/2012
;we are all in this together;was said by David Cameron./George Osbourne, neither of whom can be called an economist ,
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Adnan Al-Daini
09:22 AM on 09/14/2012
“In the long run we are all dead” was said by the British economist John Maynard Keynes.
03:34 PM on 09/05/2012
Part, 3.
So how do those receiving State - Benefits ( which are set to be CUT ), afford to go out and spend Cash in the High - Streets of the UK to buy item's from Tin's of Paint, to New - Bed's, or other things from New - Cars, to Fir Coat's, when even LESS Money will be given to the 3 Million plus currently registered as being Unemployed, and rising, or amongst those 8 Million, or so Unemployed living in, and across the wider UK Black - Market, and Economy.

You can also bet that once you have an extra Penny in your pocket, then your Landlord will once again up your Rent, to increase his Profit's, followed by an increase in Utility - Bill's across the board.

So since you already cannot find a Job, or afford to pay for additional Education - Fees, and you don't see any sign's of ever affording a Deposit on your First - Home, then just where do you go from here other get yourselves ready to beg for Food - Parcels, and other means of Charity since Child - Poverty Action is NOW addressing problems in the UK for the first - time, a UK that in Wealth terms is the 4th richest within the Western - World, that collects the most in Income - Taxes, and pay's the least in Old Age Pensions, etc:???
02:48 PM on 09/05/2012
Part, 2.
So how can you change this situation while in the middle of a Double - Dip Recession, while the UK Economy is effectively DEAD.
The best, and most simple way to go about it is to firstly Work out just how many People the UK really needs to be employed, since even when this Recession ends, there will NEVER be enough Employment for everyone.
The to Free - Up the Whole Life Working Chain, reduce the State - Retirement age to 60 yr's of age for those wishing to take a Full State Retirement at 60, which for the Tax - Payer will be cost nutural since by freeing up the Work - Chain this will allow more employers to take on apprentices as their older work - force Retire, and the money that was supporting our Younger - Generation to stay inactive can be channelled over into paying for State - Retirements at 60.

Of course, if we do not do this now with some urgency then we will end up with an ageing Work - Force when we come out of Recession, while our today's Younger - Generation become older themselves still without any REAL Skills needed to meet the challenges of tomorrows Workplace, that will become necessary to build tomorrows products that boost the UK Economy.
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Adnan Al-Daini
08:08 PM on 09/05/2012
You make a number of sensible points. Governments’ actions, in my view, suffer from two problems: the first is that they work on a short timescale governed by the election cycle; long term planning is not their forte. The second problem is that policies and actions are compartmentalized, and what is needed is a holistic approach. All departments of government should consider the consequences of their policies to other departments and society as a whole. It is obviously, as you pointed out, far more sensible to introduce the young to the world of work, than to extend the working lives of people who would prefer retirement.
12:07 AM on 09/06/2012
"All departments of government should consider the consequences of their policies to other departments and society as a whole."

While this judgement is sound in context, we have to remember that it is not the permanent Civil - Servents in charge of any Whitehall Department that are responsible by default for any Governments populas opinions, hence the old saying that without any Government interference the Civil Service would simply run the Country, and no one would be non the wiser.

You are right to suggest otherwise, that Governments are the REAL main causes for the problems they themselves seek to address, because as for the most part many MPs' that are given Departments to run have no real background knowledge of their pending Departments as directed into, prior to being told to go there by the Prime Minister.
This is a bit like an un-skilled person being told to Report to a Hospital by the Job - Centre, only to be further told that he / she has been put in Charge of The Brain Surgery Unit, whereby everyone in that Department is awaiting his / her arrival.

This approach therefore becomes a void of seeing any Departments of State rising to the challenge's ahead in any meaningful way, other than to score Political points, now called Party Policies over their rivals.
Meantime, the holistic approach would have been somthing that would have happened by getting results, back during the Victorian Era of inventions.
02:47 PM on 09/05/2012
Part, 1.
Youth unemployment, Government Cut's, and Economic failure go around in a circle hand in hand like a turn-style.
Firstly, we educate our Younger Generation in school to achieve, then we pack them off into Further Education with many going to University.
This happens of course while the Age - Clock is ticking, for in Day's past many of our older generation left School and went into their first taste of employment at 15 yr's of age doing an un-skilled Job, while other of this period took Apprenticeships which were completed by the age of 21.

So here we are today with thousands of Ex - School leaves between the ages of 18 to 25, some having been to University, but with many NEVER having either any Skilled, or Unskilled Job's.

In the mean time the Governments Answer to this problem is for other reasons to raise the State - Retirement age, which by definition causes many coming up to 65 to want to stay in Employment, while enjoying the resulting of "New" Legislation that prevents in many Cases employers from forcing anyone wishing to Work beyond 65 yr's of age from being forced to Retire.

This is ALL happening today as more People within the 35 to 50 age group are being made Redundant, while should you be 55 yr's of age, or over, then the chances of you ever retuning back into Employment becomes more remote.
11:34 PM on 09/04/2012
There are hundreds of thousands of suitable semi and unskilled jobs all over the UK. Currently they are filled by workers from overseas. The UK then has to prop up a gigantic welfare bill. The solutions are glaringly obvious. A special form of madness?
03:45 PM on 09/05/2012
"There are hundreds of thousands of suitable semi and unskilled jobs all over the UK." NO.

Hogwash.

Those, that - as you say, that ARE here in the UK, from Overseas are mainly legal Migrants from within the Eurozone, whom have every Right's to be here, and Work in the UK.
04:11 PM on 09/05/2012
My point was we should be taking back control of the situation and employers must be obliged to employ UK born citizens. The only overseas workers needed in the UK are specialized skilled professionals. When we have full employment again, look at it again.
03:39 PM on 09/08/2012
and to take jobs because their employers can make money from them. labour allowed 3 million in and they did not have to, also it is a myth that they are mostly from the EU we have allowed people in for decades and they have children who take jobs or claim benefits. this rod was created decades ago we never needed them and we dont need them now.