The plight of the young and unemployed is truly scary – and this government seems to have no answers

A quarter of long-term unemployed young people have self harmed

Related Topics

On 24 February 2010 the then Shadow Chancellor George Osborne gave the Mais lecture at the Cass Business School where he set out his vision of what his economic policy would look like if he won power at the May 2010 election. He outlined what he called a “new model of economic growth that is rooted in more investment, more savings and higher exports”. In the speech he also argued that in order to bring some accountability to economic policy, he was setting out “eight benchmarks for the next Parliament against which you will be able to judge whether a Conservative government is delivering on this new economic model”.

We already know he has failed on his first two, which he said were “maintain Britain’s AAA credit rating” (sadly lost) and “we will increase saving, business investment and exports as a share of GDP” (none of these has happened either). One of the others was that “we will reduce youth unemployment’. Youth unemployment has risen.

The first chart illustrates that youth unemployment among those aged 18-24 has risen sharply since May 2010. It is up from 732,000 in May 2010 to 758,000 in the latest data release, and up by 11,000 on the year. Of particular note is the increase in the numbers who have been unemployed for a year or more or two years or more. Since May 2010 they are up by 53,000 and 32,000 respectively. Among 16 and 17-year-olds the numbers who have been unemployed for at least a year is up from 22,000 to 27,000.

No data are published on the numbers of the youngest group unemployed for more than two years. This is of real concern given that the literature shows, including work that David Bell and I have conducted, that long spells of unemployment when you are young create permanent scars that youngsters never get over. This is a national disaster in the making.

The 18-24 unemployment rate is up over the same period from 17.8 per cent to 18.6 per cent, as is the rate for 16 and 17-year-olds, up from 33.5 per cent to 35.5 per cent since the coalition took office. In the US the latest data released on Friday show a youth unemployment rate for 18-24 year olds of 12.4 per cent. Of concern also is that the proportion of both groups who have been unemployed for at least a year is up.

The second chart shows one of the reasons for this is that the number of young people was especially large when recession hit. The chart reports the number of 18-24 year olds based on data by single year of age. So we know the number of 18-24 year olds today but we can also calculate the number in earlier years, so in 2008 I report the number of 24-30-year-olds today. In 2032 I calculate the number as the sum of all the 0-6 year olds. These numbers are correct assuming no net migration of course. They are not projections but simply counts of the numbers based on the current size of the cohorts. They show that the number of 18-24 year olds in 2008, at the onset of recession, was higher than it had been since 1990 and higher than it will be for at least another 20 years or so, all other things held constant. A big part of the reason that youth unemployment started to rise during the period 2000-2008 was simply that the size of the cohort expanded each year.

We already know from the work of my colleague Lisa Kahn from Yale that the labour market consequences of graduating from college in a bad economy are large, negative and persistent. The effects on college graduates involve lower wages because they end up in lower-level occupations. These effects are likely amplified for the least educated with few skills. As college graduates take lower-level jobs those at the bottom are pushed out into unemployment and that is where they stay. Entry effects on lower-skilled workers seem to operate through employment effects and don’t tend to show up in wages.

Lisa has suggested to me that she thinks this is because they are less at risk for disadvantages in human accumulation. When they spend time unemployed or in lower-level jobs, and aren’t investing in their human capital or in the wrong type of human capital, she believes they are less disadvantaged, relative to college graduates where post-schooling human capital appears to be more important. It’s likely much worse for everyone when there is a historically big cohort. New evidence from the latest Prince’s Trust survey of the young, conducted by YouGov provides scary reading. It suggests the youngsters who are long-term unemployed are in deep trouble. They interviewed 2,161 16-25 year olds and were able to separate out youngsters in education, employment and training (EETs) from the long-term unemployed (LTU), that is kids who had been unemployed for at least a year.

The long-term unemployed report especially poor mental health and the difference with the EETs is stark. Three per cent of those who were in EET said “life wasn’t worth living” compared with 17 per cent for the LTU. 10 per cent of those were EET said they had been prescribed anti-depressants compared with 26 per cent of the LTU.

The proportion of both who said they had self harmed was also unacceptably high – 18 per cent of the EET versus 25 per cent of the LTU. Twenty five per cent of the EETs and 32 per cent of the LTUs had had suicidal thoughts. I told you it was scary.

Not good.

The government cut the Future Jobs Fund and the Education Maintenance Allowance that worked. These are our kids and all the government can do is announce a triple lock on pensions. Thank God the Prince’s Trust is on the case. Iain Duncan Smith is AWOL. Please somebody do something before it’s too late. Cameron, call me.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Software Developer - Newcastle - £30,000 - £37,000 + benefits

£30000 - £37000 per annum + attractive benefits: Ashdown Group: .NET Developer...

Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Digital Project Manager/BA

£300 Per Day: Clearwater People Solutions Ltd: An experienced Digital/Ecommerc...

Creative Content Executive (writer, social media, website)

£30000 - £35000 Per Annum + 25 days holiday and bonus: Clearwater People Solut...

Day In a Page

Read Next

The truth about kids on holiday

Rosie Millard

August catch-up: Waiting on the telephone, tribute to Norm and my Desert Island Discs

John Rentoul
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

Greggs gives lesson in crisis management

After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

Matthew McConaughey sings the praises of bumbags

Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
7 best quadcopters and drones

Flying fun: 7 best quadcopters and drones

From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
Joey Barton: ‘I’ve been guilty of getting a bit irate’

Joey Barton: ‘I’ve been guilty of getting a bit irate’

The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
Andy Murray: I quit while I’m ahead too often

Andy Murray: I quit while I’m ahead too often

British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home