Pity the young
Apr 16th 2009
From The Economist print edition
IT IS hard to imagine a worse time to be entering the world of work. Youngsters leaving school and university this autumn will face competition from a good part of the class of 2008, who are still searching for jobs, as well as from more experienced workers who have recently been made redundant. Hiring freezes favour those already in work over would-be entrants. The most recent figures from Eurostat, the European statistics agency, suggest that youth unemployment, for many years low in Britain, is now higher than the euro-area average. According to the Association of Graduate Recruiters, its members expect to be taking on 50% fewer recruits this year than last, and starting salaries are frozen.
The government has worked to get young people studying longer. It has raised the compulsory school-leaving age from 16 to 18, to take effect in stages over the next few years, and wants half of all school-leavers to go on to university. But just as its aims seem within reach, worsening public finances are getting in the way. Earlier this month sixth forms learned, to their incredulity, that they would be receiving less government money this autumn than last. Universities have been told to cut back too, with already-stingy plans to cover 15,000 extra undergraduate places cut to just 10,000. This is to plug a £200m funding shortfall caused by the government’s decision in 2008 to extend means-tested grants to students from better-off families.
Britain has a depressingly large number of NEETs, young people who are not in education, employment or training. The extension of compulsory schooling was conceived partly as a way to tackle the problem, and the diploma was to make more years in school palatable. If neither jobs nor adequate school and university places are available, what are young people to do? Early unemployment has lasting ill effects, including a higher risk of future unemployment and lower lifetime earnings.
The cash-strapped government may announce a bit more money for sixth-form places in the budget on April 22nd. But some think it should be far bolder. David Blanchflower, an economist and member of the Bank of England’s monetary-policy committee, suggests raising the school-leaving age immediately. That would be expensive, he acknowledges, “but the cost of not tackling the rise in unemployment may well be much greater”.
Danny Dorling, a geographer at Sheffield University who has studied the effects of the crisis in youth unemployment around 1980 on public health, thinks anything is better for young people than joblessness—but not all alternatives are equally good. “Make-work” state schemes to mop them up are nearly as bad as doing nothing, his findings show, and temporary jobs only a bit better. The best course is going to college or university. It would be a pity if the current economic ill winds were prevented from blowing some good.
Copyright © 2009 The Economist Newspaper and The Economist Group. All rights reserved.