Youth employment rate slumps

http://www.guardian.co.uk/business/economics-blog/2012/feb/29/youth-employment-rate-slumps-ons

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If confirmation were needed of the obstacles facing young people looking for work, it comes in Wednesday's official figures showing a dramatic drop in the youth employment rate.

The Office for National Statistics has helped lay out the scale of the youth unemployment problem for ministers struggling to defend their latest labour market initiatives by reporting that the employment rate for young people has declined much faster than for older workers in recent years.

It's a change from the pattern seen between 1992 and 2004 when young people not in full-time education had an employment rate similar to those aged 25 to 64.

In fact, in January-March 2004, there was a gap of just 0.2 percentage points between the employment rate of 25-to-64-year-olds (75.5%) and that of 16-to-24-year-olds not in full-time education (75.3%).

Fast-forward to October-December 2011 and the rate for the older age group was little different, at 74.9%. But the rate for the younger group not in full-time education had slumped to 66%.

In other words, in eight years the employment rate gap between young and older people leapt to 8.9 percentage points from just 0.2 percentage points.

With the gap so big, labour market experts are warning that any economic recovery will still leave younger people at a disadvantage.

It is important to note that the decline in youth employment rates started long before the recession. As thinktank the Work Foundation points out, the drop began from 2004 – and although economic recovery should help improve youth employment rates to some extent there are deeper problems: namely, young people lacking the experience employers now seek and struggling to get that experience.

Andrew Sissons, a researcher at the Work Foundation, says there is no single reason for the drop from 2004 onwards but that, in general, work has become more complicated and therefore experience has become more valued. For young people, that trend leaves them in a vicious cycle, locked out from the world of work. Sissons advocates more links for young people into the world of work: "The really important thing is to be able to connect businesses with further education colleges and schools so young people have some chance of moving from the world of education to work. The really vital thing is being able to get that experience."

The ONS statistics suggest that experience problem has hit young people much harder, as might be expected, he adds.

"Employment rates for young people began to fall sharply after 2004 even while overall employment continued to hold up, and the recession has made this trend far worse."

What the recession and changes in workloads have done is made opportunities for experience much rarer.

Sissons concludes: "A swift economic recovery would help reduce youth unemployment but it is unlikely that young people will begin to catch up with older workers without a big improvement in our skills system and the way we connect young people to the world of work."

Any organisations that feel they have solutions to the growing gap are being encouraged to get in touch with the Commons work and pensions committee, which this week launched an inquiry into whether the government's approach on youth unemployment is working.