Recession report #7: Young people and recession
This month we take a closer look at some of the main statistics. We explain, for instance, the difference between how the employment level and employment rate are calculated, and look at how they have changed in the recession so far. Although the employment level is down by about 300,000 and the employment rate by a little over one percentage point, a look back shows that they are still higher than the figures inherited by the Government in 1997.
Men and women have both suffered falls in employment. Men’s employment has fallen faster than women’s, but men’s traditionally stronger labour market position means that their employment is still higher than women’s. The unemployment data show that women account for a much higher proportion of the unemployed when unemployment is measured using the internationally recognised ‘ILO measure’ of unemployment than with the ‘claimant count: women make up just under 40 per cent of the former but slightly more than a quarter of the claimant count. The claimant count measures the numbers entitled to Jobseeker’s Allowance, and this discrepancy may reflect the system’s inbuilt unfairness to women workers: women are more likely to work in part-time jobs and as a result are significantly more likely than men to have earnings below the threshold for Contributions. The other route to JSA is through a means-test, which is assessed on a family basis, and tends to be paid to the man in a heterosexual couple.
The TUC has also been concern about the rising numbers of workers who are working part-time because they cannot get full-time jobs. There is nothing wrong with part-time work if that is what you would prefer, but last year the number of workers stuck in involuntary part-time work rose by 158,000 – an increase of more than 22 per cent.
The Recession Report also comments on what has been happening to pay. Some newspapers (and some employers’ organisations) would like workers to believe that everyone is facing a pay freeze as companies struggle to cope with the recession. Of course, in a recession, some firms are in genuine difficulties, and, at a time of deflation, pay settlements are tending to drift downwards. But that does not mean that pay restraint is universal. Multi-year pay deals are still producing increases well above inflation, some employers still have to increase pay to cope with skills shortages, and pay increases of 3 per cent and above are by no means uncommon.
Our second section looks at the position of young people. Research on previous recessions has shown that young people are more likely than other workers to face long-term negative consequences due to being unemployed. This recession has hit young people hard; their unemployment rates are higher than other groups’ and the increase in their unemployment rates over the past year has been larger. 18 – 24 year olds account for 28 per cent of the increase in unemployment since the beginning of 2008.
That is why the Government’s decision to focus on young people’s unemployment is correct. The guarantee of a job or training place for every long-term unemployed young person who wants one is particularly welcome. This will be a real job, paid at least the national minimum wage, and entry will be voluntary. If only this had been set up twelve years ago!