British Youth to Bear Brunt of Fading Recovery
Britain’s Youth Face ‘Lasting Penalty’
Peter Macdiarmid/Getty Images
Riots and looting in London and other English cities last month put a spotlight on unemployed youths, prompting warnings of a social divide that may widen further.
Riots and looting in London and other English cities last month put a spotlight on unemployed youths, prompting warnings of a social divide that may widen further. Photographer: Peter Macdiarmid/Getty Images
Britain’s Youth Face ‘Lasting Penalty’
Matthew Lloyd/Bloomberg
Job seekers enter a job centre in London. Hard economic times typically hit the young hardest as companies favor holding onto older workers rather than training new staff.
Job seekers enter a job centre in London. Hard economic times typically hit the young hardest as companies favor holding onto older workers rather than training new staff. Photographer: Matthew Lloyd/Bloomberg
Young people are bearing the brunt of Britain’s faltering recovery, leaving them at risk of lasting damage as they struggle to gain a foothold in the workplace, economists and charities said.
As concern over the magnitude of government spending cuts mounts, statistics yesterday showed unemployment among 16-24- year-olds jumped to 20.8 percent in the three months through July, the highest rate since records began in 1992. That figure is certain to rise as the economy struggles to avoid slipping back into recession, economists say.
“For the cohort of youngsters trapped in this problem, the consequences are bad,” said Andrew Oswald, a professor of economics at Warwick University in central England. “Any worsening in the area of unemployment gets multiplied for young people, and they will carry a lasting penalty. It’s fair to say we are creating a lost generation.”
Riots and looting in London and other English cities last month put a spotlight on unemployed youths, prompting warnings of a social divide that may widen further. Prime Minister David Cameron yesterday said there is “not one ounce of complacency” in his coalition government about the need to create jobs.
Hard economic times typically hit the young hardest as companies favor holding onto older workers rather than training new staff. Across developed nations, youth unemployment rates are about twice those for the population as a whole. In Britain, the jobless rate among 16-24-year-olds is 2.6 times the U.K. average of 7.9 percent. A quarter of young jobseekers had been out of work for longer than 12 months as of July.
OECD Comparisons
In 2010, unemployment among 15-24 year-olds stood at 19.1 percent in the U.K., up from 14.4 percent in 2007, before the recession, according to the Organization for Economic Cooperation and Development. That compares with 18.4 percent in the U.S. and an OECD average of 16.7 percent. In Germany, the rate was 9.7 percent. It stood at 32.9 percent in Greece and 41.6 percent in Spain, the highest in the OECD.
The number of 16-24-year-old Britons not in education, employment or training rose to almost a million in the second quarter, figures from the Department for Education show. Among people aged 18 to 24, the number was up 18.4 percent from a year earlier, the biggest increase since comparable records began in 2006.
For Shemail Nixon, a 23-year-old Londoner who failed to secure a permanent job for two years, the London riots reflect the lack of prospects of Britain’s younger generation.
‘People Give Up’
“When you look at the looting we saw in London, you’ve got to think that perhaps if you had prospects, you might have thought, you know what, I’ve got a job interview next week, I’ll be able to pay for that stuff myself,” said Nixon, who is now doing an apprenticeship in track maintenance. “People give up. I’ve been there. No one cares about you. It’s just so hard to get a job.”
Cameron is under growing pressure to scale back his 80 billion-pound ($126 billion) program of spending cuts -- the most since World War II -- as the economy struggles to gain momentum. Public-sector employment fell by a record 111,000 in the second quarter, eclipsing the 41,000 jobs created by private companies, according to the Office for National Statistics.
Challenged by opposition Labour Party leader Ed Miliband in Parliament yesterday, Cameron highlighted government job- creation programs, including the funding of 360,000 apprenticeships this year.
“Every lost job is a tragedy for that family and I want to do everything that I can, and this government will do everything it can, to help those people back into work,” he said.
‘Underclass Problem’
While young people with skills, or graduates, are currently finding it hard to get work, their prospects are good once the economy returns to growth, said John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development.
“The people I’m worried about are the core underclass problem, people who don’t even have the basic capacity to become employable,” he said. “It has been ignored for too long.”
Tunde Banjoko, chief executive of Leap, a London-based charity that focuses on helping people into the workplace, says the consequences of not addressing youth unemployment may be “considerable.”
“It’s about alienation, young people starting to believe they have no stake in society,” said Banjoko. “We saw the consequences that can have with the recent London riots. They look around them and see how many people are unemployed and think here’s no point.”
Economists also point to the damage caused by “wage scarring,” where early periods of unemployment depress income levels well into middle age.
Youth unemployment “needs to be tackled head on so young people get a chance,” said Richard Layard, director of the well-being program at the London School of Economics. “We shouldn’t kid ourselves that this problem will go away once we have a recovery.”
To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
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