Bleak news on youth unemployment
Last month, we reported the extremely unwelcome news that the UK's youth unemployment rate has passed the "million milestone," hitting a record high into the bargain. According to the latest youth unemployment data:
- There are now 1.02 million unemployed 16 to 24 year olds in the UK.
- The youth unemployment rate meanwhile rose to 21.9%.
However, since April 2011, the Office for National Statistics (ONS) has reported an alternative measure of youth unemployment, " excluding people in full-time education."
According to the alternative measure of youth unemployment:
- There were 730,000 unemployed 16 to 24 year olds (on the alternative measure) between August and October 2011, up 58,000 on the quarter.
- The alternative youth unemployment rate was 20.6%, up 1.8 percentage points from the previous quarter.
Pressure from Iain Duncan Smith lead to alternative youth unemployment measure
This alternative measure of youth unemployment was introduced following pressure from Secretary of State for Work and Pensions Iain Duncan Smith, who argued that the internationally-accepted measure of youth unemployment (which was then perceived to be accelerating rapidly towards the "million milestone") is "misleading."
The CIPD suggests that CIPD research influenced the Coalition Government's thinking on the alternative measure of youth unemployment. The CIPD favours the alternative measure of youth unemployment.
Recent press reports say that the Government is now lobbying for the internationally-accepted measure of youth unemployment to be replaced by the alternative measure of youth unemployment.
Could the alternative measure of youth unemployment be misleading?
But could the alternative measure of youth unemployment itself be potentially misleading?
Economist David Blanchflower thinks so. He writes:
[I]t is true that there are 286,000 students who are looking for part-time jobs but who are classified as unemployed. As the table (below) shows, there has been a growth of 32,000 in this number since the third quarter of 2010 (Q3 2010), not least because students who are paying tuition fees are likely to be short of cash. (I take all data from Q3 2010 as the coalition's to own.) However, the other side of this coin is that there are 811,000 students employed part-time who are counted in the employment count. If you remove those in full-time education who are looking for a job, you should also remove all of those who hold a part-time job from the employment count. It's as daft as that."I'm very interested to find out XpertHR readers' views on this topic. Which measure of youth unemployment do you think is the most appropriate and/or accurate?
UPDATE (Tuesday 13 December 2011): The CIPD's association with the Work and Pensions Secretary continues, with the publication of a new article from Iain Duncan Smith on the CIPD website, promoting the Government's Worth Experience Scheme as a way to "help break the youth unemployment cycle."