Youth unemployment passes the ‘million milestone’ in 2011

Last month, we reported that the UK’s youth unemployment level had risen sharply as the class of 2011 entered the labour market. But it stopped just short of the so-called “million milestone.”

Unfortunately, youth unemployment has now passed this “million milestone,” the latest unemployment data from the Office for National Statistics (ONS) release confirms. According to ONS:

• There are now 1.02 million unemployed 16 to 24 year olds in the UK. This figure is up by 67,000 from the figure recorded for the three months to July 2011. ONS says: “The unemployment level and rate for people aged from 16 to 24 are the highest since directly comparable records began in 1992. However earlier data, calculated on a slightly different basis, indicates that the level of youth unemployment was higher in the mid-1980s.”
• The youth unemployment rate was 21.9% over the three months between July and September 2011, representing an increase of 1.7 percentage points from the previous quarter’s rate.
• In addition to the internationally-accepted youth unemployment measure, the ONS also reports an alternative measure of youth unemployment. This measure – which was introduced in its April 2011 data release, in response to pressure from Iain Duncan Smith – measures the youth unemployment rate “excluding people in full-time education.” According to this measure, there were 730,000 unemployed 16 to 24 year olds between July and September 2011. This figure was up 58,000 on the quarter. ONS says: “The unemployment rate for 16 to 24 year olds not in full-time education was 20.6% of the economically active population, up 1.8 percentage points from the three months to June 2011.”
  
  

The BBC reports that “the government put the [recent rises in youth unemployment] down to ‘the international financial crisis’.”

UK faces ‘biggest youth unemployment crisis in a generation’

Last week, TUC General Secretary Brendan Barber warned that the UK is “facing the biggest youth unemployment crisis in a generation.” This is according to TUC General Secretary Brendan Barber.

The youth unemployment situation is unlikely to improve any time soon, says Barber:

With the economic outlook the gloomiest it’s been since the end of the recession the bleak prospects facing young jobseekers look set to be with us for some considerable time to come, unless the government changes course now and brings in immediate measures to support jobs and growth.

Government urged to act on youth unemployment

The Coalition Government faces calls to take decisive action on youth unemployment, Personnel Today reports. According to Personnel Today:

• Unite General Secretary Len McCluskey argues that “the Government has created a lost generation of young people unable to gain a foothold on the employment ladder.” He says: “The Government needs to adopt a twin-track policy – having more targeted measures to help young people into work, while at the same time, reversing the hardline austerity measures that have sucked the life out of the British economy. One way forward would be to ensure that a greater percentage of apprenticeships should go to those aged under 25.”
• CBI Director-General John Cridland says: “These figures underline why we need urgent action to help our young people take their first steps in the labour market. [...] The Chancellor should use his autumn statement to announce a Young Britain Credit, worth £1500, to encourage firms to take on an unemployed 16- to 24-year-old. We also need further steps to reform the benefits system to make work really pay and to foster better links between businesses and schools to boost the attractiveness of young people in the labour market.”
  
  

CIPD favours alternative measure of youth unemployment

The CIPD suggested back in March 2011 that Iain Duncan Smith’s thinking on the alternative measure of youth unemployment could have been influenced by the CIPD’s own paper on youth unemployment, which pushed the alternative measure of youth unemployment.

A CIPD spokesperson explained to me last month how the CIPD’s views on youth unemployment measures came to influence Iain Duncan Smith’s thinking.

The spokesperson said that the CIPD’s John Philpott spoke to a “small audience” at an ONS labour market conference in March 2011, in which he set out his argument in favour of the alternative measure of youth unemployment. These ideas were “captured” in the CIPD’s March 2011 Work Audit on youth unemployment. Philpott was subsequently invited to Number 10 to share his thinking on the youth unemployment measure with David Cameron and Iain Duncan Smith, and offered to send them a copy of the Work Audit on youth unemployment.

This took place around one week before the March 2011 unemployment data release, which was widely expected to show a sharp upturn in youth unemployment. In the event, the headline rate of youth unemployment hit 18.3% that month (on the internationally-accepted measure). The ONS reported at the time that the youth unemployment rate had “never” been higher. The ONS started to report the alternative measure of youth unemployment one month later (with its April 2011 unemployment data release), following pressure from Iain Duncan Smith.

The CIPD spokesperson categorically denied David Blanchflower’s suggestion that Iain Duncan Smith might have commissioned the Work Audit report. He stated that it “was most definitely not commissioned by IDS or anyone else.” He pointed 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.”

Last month also saw the CIPD reaffirm its preference for the alternative measure of youth unemployment (see Update 4 to this post). However, the alternative measure of youth unemployment is once again not mentioned in the CIPD’s official response to the latest unemployment data release.

Bad news on unemployment isn’t limited to youth unemployment

The latest unemployment data release brought bad news on many other measures, too:

• The headline unemployment rate (on the ILO definition) was 8.3% between July and September 2011, up 0.4 percentage points on the previous quarter’s rate (7.9%).
• The number of unemployed people rose by 129,000, to 2.62 million.
• The number of people unemployed for more than 12 months was 868,000 over the three months to September 2011 (representing an increase of 31,000 on the quarter). The CIPD’s John Philpott comments: “Also very worrying is the rise to 868,000 in the number of people unemployed and looking for work for more than a year, 30% of whom are aged 16-24. It is these long-term unemployed young people, rather than unemployed youths as a whole, who should be the prime target of Government policy measures.”
  
  
• The number of people unemployed for more than two years was 422,000 over the three months to September 2011 (an increase of 13,000 from the previous quarter).

UPDATE 1 (Wednesday 16 November 2011):

Grayling blames unemployment figures on eurozone crisis

Employment Minister Chris Grayling says that the unemployment figures reflect the impact of the unfolding eurozone crisis on the UK economy, the BBC reports. According to the BBC, Grayling said:

These figures show just how much our economy is being affected by the crisis in the eurozone. [...] Our European partners must take urgent action to stabilise the position,” he added.

Liberal Democrat peer Matthew Oakeshott argued that Grayling’s blaming of the eurozone crisis for the rise in UK unemployment is ill-informed. He tweeted:

Sorry,Chris Grayling,we can’t blame the Eurozone crisis for jobless figures.Lesson 1 in the economics textbook- unemployment lags

The Guardian’s Polly Curtis has undertaken her own analysis of the data behind Grayling’s claims. Here is her conclusion:

The eurozone crisis cannot explain why youth unemployment has been rising for the past eight months to record highs. Grayling appears to be fudging the dates to blame rising unemployment on the eurozone crisis. If the eurozone crisis does feed through to the jobs market we should expect unemployment to keep rising for months to come.

UPDATE 2 (Friday 18 November 2011):

Government lobbying for change in youth unemployment measure as youth unemployment passes the ‘million milestone’? The Coalition Government is also currently taking action relating to how youth unemployment is measured, if press reports are to believed. The Guardian reports that the Coalition Government is lobbying for a change to the internationally-accepted measure used to record youth unemployment rates. The Guardian says: “[T]he Government is [...] lobbying the International Labour Organisation [ILO] to remove students in full-time education from the headline total of youth unemployment. Just over 286,000 students are included in the figures.” Economist David Blanchflower told XpertHR that he believes this initiative to be “another example of spin.”