Labour market prospects – no comfort for the young.

Figures  for the final quarter of 2011 show unemployment up by 48 000 at 8.4% or 2.67 million – with significant increases in female joblessness being the result of local government cutbacks.

Of course, ONS statistics are just one (narrow) measurement of labour market activity. Using broader indications –including those taking part-time or temporary work because there is nothing else – the TUC puts the real jobless figure at 6.4 million (www.tuc.org.uk/economy/tuc-20616-f0.cfm).  The ONS data also reports a 60 000 increase in employment, but this is the result of a 90 000 increase in part-time working.

While the official unemployment rate for 16-24 year olds may have crept up by 22 000 to 1.04 million or 22.2%,  this includes over 300,000 students looking for work. Excluding those in full-time education however, there are still 17% of 18-24 year olds unemployed, up 2% from a year ago – with another 15% ‘economically inactive.’  The limited involvement of young people in the labour market as a whole is strikingly apparent – 44% of all 18-24 year olds are not working.

 Worsening figures for unemployment take place against increasingly pessimistic predictions on the state of the labour market, with the highly regarded Chartered Institute of Personnel and Development’s (CIPD) monthly survey on employer expectations concluding that the first quarter of 2012 will be the most difficult period for the jobs market since the recession. (That is if, we are not already back in recession!)

Despite a significant contraction of the economy during 2008/9 unemployment did not reach the levels expected by many forecasters  as employers ‘held’ labour, using short-time working, ‘voluntary’ lay-offs and in some cases by making pay cuts. CIPD report an end to a ‘wait and see’ attitude and instead employers ‘pushing the redundancy button’. Nearly a third of its respondents in the private sector plan to make redundancies.    It also reports that six out of ten are not planning to create any new jobs in the next three months months(www.cipd.co.uk/pressoffice/_articles/LMOrelease130212).

This is hardly the sort of news that young unemployed people will want to hear. If young people looking for work find themselves at the end of the jobs queue, then those in work will also be more vulnerable to the risk of redundancy –being both less established in their workplace and less expensive to get rid of  – a  survey  of young workers by the Institute for Public Policy Research (IPPR) showing  that few had the savings they needed to survive a redundancy and 40% of 16-24 year olds had debts of £5000 or more (www.ippr.org/images/media/files/publication/2012/02/young-people-savings_poll_Feb2012_8650.pdf)

With CIPD (and the IPPR) continuing to predict unemployment approaching 3 million by the end of 2012, prospects for the creation of more apprenticeships also look bleak.  Government supporters may argue that 163,000 new apprenticeships have already been created – more than double their original proposals of 50,000 and that George Osborne has pledged an extra £150 000 million bringing the total apprenticeship budget to £1.4bn by 2012.  It is now clear however (Guardian 28/10/11) that only a minority of these new placements have been for young people. Only 11 000 new places have gone to 16-18 year olds and only 16% to those under 25.

 It is also evident that employers have repackaged or are ‘converting’ or ‘rebranding’ existing jobs as apprenticeships so as to meet targets and qualify for money. Neither is it clear how many of them may be short-term – maybe for a few months at best. Under the Coalition many  ‘apprenticeships’  exist in name only and are certainly not the legally binding indentures of yesteryear that guaranteed employment on completion because again, employers, benefiting from plenty of applicants, including plenty of graduates, do not require such ‘time serving.’ The reality is that most do not require apprentices at all!

 With the US unemployment rates levelling off as a result of the mildest policy turn away from austerity,  a Plan B (+) for the UK couldn’t have greater relevance.

Martin Allen

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