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The political battleground of youth unemployment: and is there even a ‘crisis’?

by on March 10, 2014

With the next General Election still some 16 months away, youth unemployment is an area receiving political attention across the spectrum. One if the recurring features of this topic is the taken-for-granted nature of Government intervention to address what are seen as unacceptable levels of out of work young people.

A couple of weeks ago, we reported the current Government initiative to reform processes relating to getting young people into work. Today, as reported here in The Independent, the Labour Party has announced a pledge of £5.5 billion to guarantee a job for every young person who has been out of work for a year and every adult unemployed for two years. This programme would run for the whole five year term of the parliament. Ed Balls is quoted as saying “It will mean paid starter jobs for more than 50,000 young people who have been left on the dole for over a year.”

Funded through a tax on bankers’ bonuses, a Labour Government would pay the wage and employer’s National Insurance contribution for 25 hours a week for six months at the national minimum wage, and would give the employee £500 towards training and administration costs. It’s interesting how this reinforces the idea that the cost of employing (some) young people should come from public funds rather than employers.

Even more interesting is this piece in The Telegraph last week which asks if youth unemployment is really as bad as the figures suggest. Apparently this all relates to how ‘unemployment’ is measured and reported, specifically whether this is linked to measurement of those economically active or not. The ONS has recently published the “unemployment proportion”, which measures the percentage of unemployed people in the total workforce, regardless of whether they are active in the labour market or not. Using this measure, Britain’s youth unemployment was at 13% at the end of last year – below the EU average. And somewhat below the headline figure of 20%.

Whatever the figure, the political acceptability to fund youth employment seems here to stay for the near future – can the same be said for any other age group?

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