Official figures are expected to confirm that unemployment in Britain has passed 2.6 million, with nearly one million people between the ages of 18 and 25 out of work.
With the economy showing few signs of recovery, experts have warned that Britain risks creating a “scarred generation” of long-term unemployed young people who lack the skills and experience to fully integrate with the workforce.
“What we see is over their lives that people who have had long spells of unemployment in their youth tend to have lower wage prospects, lower career advancements and are more vulnerable to ill health, depression, mental wellbeing problems,” Dania Ben-Galim, associate director for family, community and work at the Institute for Public Policy Research, said. “I think the combination of that is a scarred generation. We do see... effects from the 80s.”
The headline unemployment figures are yet to reach the highs of the 1980s, and Wednesday’s numbers will be boosted by recent graduates and school leavers still looking for work, but behind the technical rise, there is a worrying trend towards long-term youth unemployment, which was rising before the recession and has worsened since, according to Ben-Galim.
“It’s the long-term youth unemployed, those with few skills and few prospects where the risk is highest and the vulnerability is highest,” she said.
The Miliband Commission on Youth Unemployment warned that the figures were likely to be “a wake up call”. In a statement, David Miliband said:
"This week’s figures are likely to be a challenge to the whole country. Youth unemployment scars people for life, particularly if it is prolonged, and at today's levels it will be costing the country millions of pounds a week. Our aim is to understand the problems we face, arrive at the right solutions, and then act. We must not let the scourge of unemployment leave a permanent mark on the hundreds of thousands of young people living through it today."
However, experts warn, there are few easy answers. Improving skills for young people boosts the supply side of the equation, but with the UK’s growth slowing to 0.1 per cent in the last quarter and businesses looking to trim back investment, the demand is simply not there.
“We know that youth unemployment is cyclically sensitive and peaks during recessions, but what we saw from 2003-2004 was a growing youth unemployment problem in the UK,” Jonathan Wright, a researcher at the Work Foundation, said. As the economy changes in structure, “the demand for higher experience and more skills is excluding people.”
This exclusion is most marked in concentrations in former industrial areas, such as South Yorkshire and South Wales, and in inner city London boroughs, Wright said. Social exclusion and a lack of job prospects are believed to have been linked to the rioting and looting that broke out in London, Birmingham and Manchester this summer.
Some pre-recession attempts to reverse the longer term trend, such as the £1 billion Future Jobs Fund (FJF), as well as the Education Maintenance Allowance (EMA), have disappeared, casualties of the coalition government’s austerity measures.
The FJF, through a grant system, funded employment for 18-24 year olds. The EMA gave an allowance to students to remain in secondary education.
“The lessons from the Future Jobs Fund were very positive, in terms of offering young people a guaranteed job with the minimum wage, in terms of both creating jobs and providing that link to the labour market and providing real work,” Ben-Galim said.
Beyond the supply-side issues, however, the UK lacks the culture of apprenticeships that has been fostered in other European countries, Wright said.
“When you compare the UK to Germany or Austria, we compare pretty poorly. One in ten British companies offer apprenticeships, compared to one in four in Austria or Germany. Granted, they have different social arrangements, but employers are much more willing to take on vocational education in Germany, and it’s not looked down on. The UK performs particularly poorly in intermediate and basic levels of skills.”
The country’s education system is also failing to fully prepare people for work, Wright noted, something not helped by the abolition of the EMA.
“Getting an education is one way of reducing the unemployment rate,” he said.
“By the age of 18, less than 50 per cent of people have A* to C in GCSE English and maths,” Wright said. “It doesn’t matter if you’re working on a shop floor, or in an office, or in a factory, you need those basic skills to succeed in any of those environments.”