Youth unemployment stops just short of ‘million milestone’ as class of 2011 enters jobs market

The UK’s youth unemployment rate today edged ever closer to the psychologically important “million milestone,” with the release of latest unemployment data from the Office for National Statistics (ONS). Today’s figures reveal that the number of unemployed 16 to 24 year olds stood at 991,000 between June and August 2011. This represents an increase of 74,000 on the youth unemployment number recorded between March and May 2011.

“The unemployment level and rate for people aged from 16 to 24 are the highest since comparable records began in 1992,” according to the ONS.

The Guardian notes that “the figures have been swollen by the number of graduates and school-leavers who have failed to find work after joining the jobs market this summer.”

The youth unemployment rate was 21.3% over the three months between June and August 2011, an increase of 1.6 percentage points on the previous quarter.

However, the ONS also reports an alternative measure of youth unemployment. This measure, which was introduced in its April 2011 data release, measures the youth unemployment rate “excluding people in full-time education.” According to this measure, there were 721,000 unemployed 16 to 24 year olds between June and August 2011.



Youth unemployment, Iain Duncan Smith and the CIPD

This alternative measure of youth unemployment was introduced by ONS back in Spring 2011 in response to pressure from Secretary of State for Work and Pensions Iain Duncan Smith.

Iain Duncan Smith called for ONS to change how it reports levels of youth unemployment, from what he described as a tendency to focus on the “misleading” internationally-accepted measure of youth unemployment.

In a comment on the XpertHR Employment Intelligence blog, the CIPD claimed that Iain Duncan Smith’s demand for a rethink on the reporting of youth unemployment represented an “echoing” of the CIPD’s own thinking on youth unemployment. A CIPD spokesperson subsequently tweeted that the introduction of the alternative measure of youth unemployment in April 2011 “Seems to follow #CIPD’s call.”

Economist David Blanchflower argued at the time that Iain Duncan Smith’s attack on the internationally-accepted measure of youth unemployment was motivated by a desire to distract attention from the fact that youth unemployment was fast approaching “the million milestone” – a milestone which it has now passed with the release of today’s figures.

In a comment posted here on the XpertHR Employment Intelligence blog, Blanchflower expanded on his argument, stating that “Complacency saying there isn’t a problem doesn’t help.”

CIPD changes tack on youth unemployment?

In an article in this morning’s Daily Telegraph – looking ahead to today’s unemployment data release – CIPD chief economist John Philpott is quoted as saying that the rise in youth unemployment seen today was likely to be “politically significant,” but would not pass the one million point – a prescient prediction.

It is interesting that no mention is made of the alternative measure of youth unemployment, which the CIPD was so keen to promote a few months ago.

UPDATE 1 (Wednesday 12 October 2011): In a newly-issued CIPD press release responding to today’s figures, John Philpott has the following to say on youth unemployment:


As the CIPD expected, youth unemployment didn’t rise by the 85,000 figure required to take the total above 1 million by the end of August. However, given the background deterioration in the labour market we now expect that milestone to be reached next month.

This focus on the “million milestone” – and the apparent loss of interest in the alternative measure of youth unemployment – appears directly to contradict the March 2011 statement from the CIPD’s Robert Blevin that “David [Blanchflower] and others aren’t doing young people struggling with unemployment any favours by focusing on “million milestones” etc.”

Does this mean that the CIPD no longer considers the internationally accepted measure of youth unemployment to be misleading?

UPDATE 2 (Wednesday 12 October 2011): Ian Brinkley of The Work Foundation has issued the following statement on today’s youth unemployment data:


Unemployment among young people between the ages of 18 and 24 is increasing twice as fast as for the workforce as a whole and there has been a dramatic increase in long-term (>12 months) youth unemployment.

UPDATE 3 (Wednesday 12 October 2011): Unemployment reaches highest level for 17 years Read Personnel Today’s report on the headline findings of today’s unemployment data release.



UPDATE 4 (Wednesday 12 October 2011):
The CIPD has been so kind as to respond to my questions via Twitter, reaffirming its preference for the alternative measure of youth unemployment, and stating that it sees no contradiction between the focus of its press release on the “million milestone” and the earlier comments of the CIPD’s Robert Blevin that “focusing on “million milestones” etc.” is not “doing young people struggling with unemployment any favours.”

The image below reproduces my Twitter exchange with the CIPD on this topic (via bettween.com) – click on the image for a larger version. Please note that the tweets appear in reverse chronological order:

YouthUnemploymentTweets.JPG

UPDATE 5 (Wednesday 12 October 2011): Economist and former Bank of England Monetary Policy Committee (MPC) member David Blanchflower has suggested to me via e-mail this afternoon (UK time) that there may be a particular reason why the CIPD has been so keen to emphasise the alternative measure of unemployment.

Blanchflower says: “i think it was driven by the fact that cipd was commissioned by IDS to write the paper after a Downing Street summit on youth unempt…!”

My thanks to Mr Blanchflower for his kind permission to reproduce his words here.

UPDATE 6 (Wednesday 12 October 2011): Job figures are horrendous but hardly a surprise David Blanchflower presents his detailed analysis of the latest unemployment data, includes a link through to today’s post on this topic from XpertHR.



UPDATE 7 (Thursday 13 October 2011):
“This unemployment crisis is state sponsored,” argues TUC General Secretary Brendan Barber. Reacting to yesterday’s unemployment figures, Barber said: “These are terrible figures. The government’s austerity measures have turned unemployment into a full-blown crisis – with job losses not seen since the darkest days of the recession.[...] The news for those in work is bleak too, with wage rises falling back to just 1.8 per cent and creating an even tighter squeeze on living standards. The Chancellor’s Plan A has sent unemployment to a 17-year high. This country urgently needs a plan B to get people back into work.”

UPDATE 8 (Thursday 13 October 2011): The CIPD’s Robert Blevin has (via Twitter) categorically denied David Blanchflower’s suggestion that Iain Duncan Smith might have commissioned the CIPD to produce the CIPD’s March 2011 Work Audit on youth unemployment (see Update 5 above for Blanchflower’s words).

Mr Blevin states that the Work Audit “was most definitely not commissioned by IDS or anyone else.”

He points out that – as is stated on page 6 of the PDF report – the “Work Audit expands on observations made by the author [John Philpott] in his closing keynote speech to the ONS Labour Market Statistics conference, BIS Conference Centre, London, 2 March 2011.”

He continues (in a Tweet): “John invited to No.10 meeting /after/ the ONS conf, & told PM & IDS he was working on the paper + offered to send”

My thanks to Mr Blevin for taking the time to respond to my Twitter query on this matter. You can view my complete dialogue with Mr Blevin on this matter directly below:

YouthUnemploymentDialogueOctober2011.jpg

UPDATE 9 (Sunday 16 October 2011): Sunday Times Economics Editor David Smith rejects talk of a “lost generation” when it comes to youth unemployment, and argues that we should be focusing on alternative measures of youth unemployment, rather than the internationally accepted measure. In his latest Sunday Times column, Smith says:


I think we would serve young people better if we did not give such a bleak picture of youth unemployment. As everybody knows, the 16-24 unemployment figure of 991,000 includes 269,000 full-time students looking for part-time work.

Taking these out and measuring unemployment as a percentage of the youth population (rather than just the economically active) knocks the youth rate down to a still-high but not so hopeless 9.9%. That is not my figure, by the way, but from the Centre for Economic and Social Inclusion.



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