When Kimberly Roberts applies for jobs she slips a little red, white and grey card into the envelope with her CV that says: “Employ me and get . . . £2,275 ($3,570 U.S.) wage incentive; the right skills for your business; new talent; new enthusiasm; new perspectives.”
In the five years since she left school at 16 she has failed to get a job in her home town of Bridgend in south Wales. She and the UK government know the longer she goes without work, the harder it becomes to persuade someone to take her on. The promise of money, the government hopes, will tip the balance.
Britain’s labour market – sometimes called the “Anglo-social” model because it sits between the freer U.S. and more regulated continental European variants – has in many respects performed far better than in previous downturns.
While economic output is 4.5 per cent below its pre-recession high, employment is down by less than 1 per cent. Unemployment, at 8.1 per cent of the workforce, is below the US at 8.2 per cent and the eurozone’s 11.1 per cent.
But some groups – such as the young, the poorly educated and those in deprived communities – have not been so lucky. There are 1m unemployed 16– to 24-year-olds, or 21.9 per cent of the workforce in that age group – a shade below the eurozone average.
Those figures need treating with caution. Nearly a third of the total are students looking for part-time work to supplement their income. But experts say the problem, while less severe than in the 1980s, is as bad as in the 1990s recession and going on for longer with no relief.
More worrying still, youth unemployment has been rising since 2004, possibly because the focus of government welfare-to-work efforts switched at that time from young people to single mothers and those on incapacity benefit. The problem is likely to persist even when the economy recovers.
“The UK government has woken up to this quite late,” says Katerina Rudiger of the Chartered Institute of Personnel and Development, the professional body for human resources managers. “A young person in the UK is more than three-and-a-half times more likely to be unemployed than an adult, whereas even in Greece, Spain and Portugal young people are about two-and-a-half times more likely.”
The main response by the Conservative-Liberal Democrat coalition is its work programme, under which private welfare-to-work companies are paid by results in getting benefit claimants into jobs through intensive help. It is also boosting work experience placements and apprenticeships, though most of the latter have been going to older workers.
Under pressure to do more, in April ministers launched a “youth contract”, worth £1bn over three years, which includes wage incentives of up to to £2,275 for employers that take on under-25s under the work programme – the carrot with which Ms Roberts is trying to tempt employers.
In Bridgend, 11.5 per cent of the population receives incapacity benefits from the government because they are classed as too sick or disabled to work, compared with 6.5 per cent of the UK population. That includes Ms Roberts’ mother, who has a long-term illness.
When Ms Roberts left school her grandmother was also very ill and she spent several years caring for her. By the time she started really trying to find work, the financial crisis was raging and competition for even the lowest paid jobs was intense.
Last month, she got through two rounds of interviews for a sales job at Phones4U, a mobile phone shop chain. But she hit a wall in the final interview with the regional manager. He was kind but he also spelt out his reservations in stark terms: the older she gets with no work experience, he told her, the more employers will wonder what the problem is.
She was crushed but she could see his point. “If you look at say an 18-year-old who’s just left school, and then you look at a 24-year-old with no experience, if I was a business, knowing what I’ve been through I’d go for the 24-year-old, but a lot of people thinking rationally would go for the 18-year-old.”
Many businesses say they want to help solve youth unemployment, but worry that young people emerge from the education system with inadequate literacy, numeracy and communication skills.
Paul Gregg, professor of economic and social policy at the University of Bath, says of the government’s response: “The scale of the spending and the infrastructure needed to address the issue is clearly lacking.”
Like many experts, he identifies the U.K.’s core problem as the lack of a comprehensive system for helping young people with the transition from education to work, coupled with a lack of high-quality vocational qualifications.
Not everyone agrees the young need special help. Ian Mulheirn, director of the Social Market Foundation think-tank, warns that youth unemployment is over-emphasised relative to the problems of older groups. Special help is better targeted at the long-term unemployed of all ages, more of whom are older workers, he says.
But many people want to see action on youth unemployment stepped up. “There’s not anything obviously wrong with the government’s policies for the most part,” says Jonathan Portes, director of the National Institute of Economic and Social Research. “But they are just not spending enough money and doing it to enough people.”