The NEET problem is also a jobs problem

Recently released figures, show a fall in the proportion  of NEETS, down from 13% to 12.3% of all 16-24 year olds. According to Skills Minister Nick Boles, this ‘demonstrates that our economic plan is working’ –yet there are still 943 000 young people being in this category.  Take a look at the figures in more detail though and a less certain picture emerges. There’s been a slight rise in the number of 16-18 NEETs for example, from 6.8% to 7.1%.  14% of 18 year olds are also now classified as NEET (up from 12.6% a year ago).

The NEET rate is not the same as the unemployment rate. The latter includes students who are also looking for work in this case, currently about 250, 000. Only about half of NEETs are unemployed however –the remainder being ‘economically inactive’, not seeking work or not able to work.  Arguably though, NEET statistics provide a better and more accurate picture of youth joblessness.

It’s difficult to make accurate international comparisons, but the UK is well above OCED averages, if well below the 25% rates of Greece and Spain.  There are more female NEETs but nearly two-thirds of these would not be able to enter employment because of home or family responsibilities. Northern areas have a much higher concentration of NEETS (North East 18.1%, Yorks & Humberside 15.2%) compared with London (10.1%).  

Despite the recent increase noted above, the number of 16 and 17 year old NEETs has declined significantly since the start of the 21st century. This has been the result of increased staying on rates in full-time education, – 87% of 16 and 17 year olds now staying on compared to just over 70% in 2000, the raising of the mandatory participation age to 17 and now to 18 from September 2014, was designed to reinforce this trend. Now figures show that the increase in 16-18 year old NEETS is the result of a rise in NETs (those not in education or training)  which suggest that ‘staying on’ has reached a saturation point.

But 16 to 18 year olds constitute only about 20% of total NEETs, compared with 19-24 year old NEETs. It’s these older NEETs which will be the focus of attention for the new Conservative government.   Adopting a new American style ‘workfare’ approach the Tories will (to quote from the Queen’s Speech)  ‘put in place a new Youth Allowance for 18-21 year olds with stronger work related conditionality from Day 1. After 6 months they will be required to go on an apprenticeship, training or community work placement’. Refusal will lead to withdrawal of benefit.

Yet the NEETs problem represents the sharp end of a wider youth employment problem.  While there’s a notable correlation between low levels of qualifications and becoming NEET and that NEET’s are more likely to have lower levels of basic skills,  at the other end of the spectrum is the increased numbers of youth people who are ‘over skilled’ and ‘underemployed’  in  the work they do –OECD now puts this figure at  I in 8.   

This problem is particularly acute in the UK with up to a third of graduates having to take non-graduate jobs, resulting in the bumping down of those who would generally have done these jobs into lower skilled and lower paid employment.  Because there’s been a more than proportionate increase in the growth of unskilled work, there’s been an even larger increase in the number of people or who are able to do it.  Generally employers will favour those with more qualifications. But, something on which UK skills agencies regularly comment, unless there are proper incentives employers are less likely to want to  employ young people without previous employment experience,  when they can take on adults instead.

Department for Education Statistical Bulletin   http://www.ons.gov.uk/ons/dcp171778_337420.pdf

Parliamentary Research Briefing   http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06705

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