Comment on the Government’s New Campaign to “Back Young Britain” and on the Latest ONS Labour Market Statistics

LONDON - The Work Foundation welcomes Lord Mandelson’s call for a national campaign to tackle youth unemployment. But it urges the government to speed up introduction of its measures and to ensure they do not overlook the increasing competition between graduates and non-graduates for jobs.

Ian Brinkley, Associate Director at The Work Foundation said, “It is encouraging to see the government’s determination to address this important issue. Young people are always disproportionately affected by recessions and are among the first to be affected because the first thing employers do in a recession is stop hiring. The flood of newly qualified graduates into the labour market this summer has also given added urgency to the issue.

“Many new graduates are going to struggle, but the most serious short-term effect could be on non-graduates. Graduates who cannot find the job they want will eventually compete with non-graduates for almost any job - and many employers will find it attractive to have graduate quality labour for jobs paying minimum wage or just above it. As a result, those young people with few or no qualifications will suffer extremely high rates of unemployment. The dangers of a generation “lost to work” are most severe for this group.

“The government has taken some very positive steps to help young people who have been unemployed on a long-term basis. But these measures need to be deployed faster, strengthened and extended to older age groups.

“Much more could be done to slow down the entry of graduates into the labour market over the next few years. Every student who is qualified to do so should be encouraged to look at staying on and the funding provided to support their course. Universities and others running research-related programmes should be offered additional short-term funding to take on new graduates in temporary posts. The government should guarantee a place for every young person able to benefit from a course within the higher and further education sectors.

“As well as helping graduates directly, these measures would reduce the short-term competition for jobs so that non-graduates stand a better chance of getting work. And in the longer term, they will increase the quality of labour that we will need for a sustained recovery.”

Commenting on the latest ONS figures on the employment market released today, Brinkley added:

“The latest figures show further big falls in employment and - on one measure - a big rise in unemployment. Comparing the three months to June with the previous three months, total employment fell by 270,000. Unemployment measured by the International Labour Organisation (ILO) definition (looked for work in the last four weeks, able to start a job in two weeks time) went up by 220,000. The ILO unemployment rate is now 7.8 per cent.

However, there is a baffling discrepancy with the other measure of unemployment, the number of people claiming Job Seeker Allowance (JSA) benefits. This went up by just 25,000 in July. But on a like-for-like comparison, the discrepancy is significantly smaller. A comparison of the claimant count average of the three months to June with the average of the previous three months, shows that claimant count unemployment went up by 150,000. This is still very different from previous recessions, when claimant count unemployment increased faster than the wider ILO measure.

The government has recently announced an official inquiry into the discrepancy. Setting aside possible inaccuracies and “blips” in the statistics themselves, Ian Brinkley outlines the possible reasons behind this in his full analysis of the latest figures available at www.theworkfoundation.com.

Notes to editors: 1.Ian Brinkley is available for briefings and interviews. 2.The Work Foundation is the leading independent authority on work and its future. It aims to improve the quality of working life and the effectiveness of organisations by equipping leaders, policymakers and opinion-formers with evidence, advice, new thinking and networks. www.theworkfoundation.com

Source: The Work Foundation

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