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Business News

Jobless rates for the young to exceed 20 per cent


The recession could result in permanent youth unemployment levels of over 20 per cent even after the economy recovers, a think tank warns today. The warning comes as new official figures are published on the numbers of young people that are considered to be "Neets" – not in education, employment or training.

The last figures to be published showed that 1,026,000 16- to 24-year-olds were "Neets" in the third quarter of 2010. And unemployment figures published last week showed that 965,000 young people in the same age group are unemployed, the highest number since record began in 1992.

Demos estimates that the ranks of unemployed young people could grow over the next five years to 1.2 million (a 23 per cent increase) as 230,000 16- to 18-year-olds leave education with NVQs at level 1 and 2. The public affairs think tank says these qualifications, which are equivalent to GCSEs, are "inadequate" and offer young people little or no protection from unemployment. In some cases, taking such vocational qualifications can harm, rather than help, young people's earning potential, the report claims.

Demos says levels of 10 per cent to 15 per cent were the norm for youth unemployment in the 1990s, but it warns that the recession, and failures in the education system risk, mean the new "normal" level could be 20 per cent or higher.