Youth unemployment is back in the news. But who is this recession really hitting hardest? Has it merely exposed deeper problems we’ve been ignoring for years?by Fran Abrams / September 23, 2009 / Leave a comment
Above: trainee chefs—but will the recession permanently damage young people’s prospects?
The class of 1979 at Marple Hall County High School in Stockport, in my recollection at least, divided neatly into two groups. By and large, those of us whose parents owned their own homes went on into the sixth form; the ones who lived in council housing mostly left to start work. Jobs seemed easy to come by. Nicky, the most academic of the latter bunch, did an electrical apprenticeship. Colin, bright and personable, trained as a chef; Danno as a painter and decorator. As the rest of us took A-levels and went off to college and university, news of our old friends seeped through. Every time I went home another former classmate had hit the dole queue. The last time I saw Nicky, in the mid-1980s, he was sitting in the corner of our local pub, overweight, out of work and, I was told, filling his days with drugs.
I’ve thought about my schoolmates recently as youth unemployment has hit the headlines once more, and the clichéd phrase “a lost generation”—used in the 1980s and briefly in the early 1990s—has been pressed into service again. Nearly 1m 16-24 year olds are now “Neets”: not in education, employment or training. The figure has risen 14 per cent on the same quarter in 2008, leading to concern that a whole cohort of young people will suffer. But the real picture is a complicated one, in which some groups will be hit less hard than others and some may even prosper despite difficult circumstances.
Unemployment is rarely a good thing. Long periods out of work decrease attachment to the labour market; skills go rusty and the jobless are treated with suspicion by employers. But the case for a “lost generation” rests on a theory that unemployment, especially at the start of a working life, has effects that can last for years or even decades—even for those who do find jobs. This “scarring” theory (see box, p58) was first promoted in the early 1980s by American academic David Ellwood. One of its leading proponents is economist David Blanchflower, a former member of the Bank of England’s monetary policy committee, and one of the few experts who predicted this recession. He feels no need to pull his punches: “It does seem like a national crisis and a lost generation… it’s a big problem for society because young unmarried men who are unemployed commit crime. The public’s not going to be really happy with rising property crime; rising street crime. The cost of doing nothing looks very serious.”
Blanchflower published an academic paper in February 2009 using data from the National Child Development Study, which followed a large sample of children born in one week in 1958. His research suggested that while some people who lost jobs as factories and mines closed during the late 1970s and early 1980s recovered, the scars from early spells of being out of work persisted for many, even at the age of 46. Those who had been permanently in employment were more likely to be happy, healthy and satisfied with their work, while those who had spells of unemployment were still earning less than those who hadn’t. Blanchflower says that we could well see the same thing this time, especially given the depth of this recession.
But this “lost generation” story hides a number of sub-plots. Graduate unemployment, for instance, is a major talking point. But middle-class parents should not worry. Well-qualified graduates are the least likely to be unemployed, and the most likely to recover if they are. Many graduates will fall out of work in this recession but this is largely because there are a lot more of them. In the 1980s, unqualified manual workers in areas dominated by traditional industries were hit hardest by unemployment. Now more than half of the young unemployed have A-levels at least. Paul Gregg, an economist at Bristol University known for his work on scarring theory, says the middle classes, with their networks and personal contacts, will come out on top as they have done in the past. But he warns that any who do become unemployed for a long period could be just as hard-hit as their less affluent peers: “The way I often put it is that if you’re walking down the middle of the road you’re more likely to be hit by a car. But if you are hit by a car on the pavement, it still bloody hurts. The risk is profoundly different but the damage is the same.”
Other common “lost generation” assumptions bear scrutiny, too. Not all graduates, for instance, are likely to fare equally well in the downturn. Data on today’s under-25s show that those with a 2:2 or less are more likely to be unemployed than those whose highest qualifications are A-levels. Those who have completed an apprenticeship, meanwhile, are the least likely to be jobless—roughly half as likely as others their age. While higher qualifications usually help ward off unemployment, those who succeed in their chosen route—be it academic or vocational—do better than those who don’t. Employers, meanwhile, are especially keen to hang on to their best apprentices.
What of the assumption that joblessness is uniquely bad for the young? Graphs showing long-term levels of unemployment across age groups tend to be U-shaped, with both young and old workers badly affected. A 2001 study by Oxford University economist Mary Gregory, looking at those who lost jobs between 1984 and 1994, found that older workers found it hardest to escape from unemployment. They were also more likely than their younger counterparts to become unemployed in the long term, presumably because younger workers had more time to retrain or move into different sectors.
That said, as LSE economist Tim Leunig has noted (Prospect, September 2009), in the current downturn employers have so far tended to hold onto their older workers, in part because stricter labour market regulation makes it harder to get rid of staff. When combined with demography—the number of 18-24 year olds in Britain rose by 1m between 2000 and 2007 to 7.4m—this has seen young people lose jobs most quickly in this recession. Paul Gregg thinks that even if older workers are suffering, government policy should still focus on the young. The older jobless are less likely to commit crime, less likely to bring up children in workless households and—to be brutal—have less time left in which to draw benefits. A younger person can gain decades of a more productive life from a retraining programme or a job-creation scheme.
Assumptions about race and unemployment, too, are open to challenge. One might think that ethnic minorities would be hit hardest. In general, black youngsters are twice as likely as their white counterparts to be unemployed, with Asians one-and-a-half times as likely. Yet a closer look at the latest data on claimant numbers reveals something surprising: ethnic minorities are still more likely, overall, to be out of work, but the rise in unemployment among these groups over the past year has been less than for white youngsters. In the year to June 2009, the number of white British 18-24 year olds claiming jobseekers’ allowance rose by almost 90 per cent. For Indians it was 83 per cent, for Bangladeshis 48 per cent, Pakistanis 42 per cent, Africans 41 per cent and Caribbeans 40 per cent. Part of this turnaround is likely explained by young people from ethnic minorities finding it harder to enter the jobs market on leaving school or college and extending their education. (Official statistics show a higher proportion of young, ethnic minorities stay on into further and higher education, even if their GCSEs are less good.) But it may also be a sign of a wider trend. For several years now poorer white pupils have been falling behind their classmates at GCSE. White children on free school meals, commonly used as a measure of deprivation, now do worse in exams than similarly poor pupils from other ethnic groups. So it is also possible that ethnic minorities are finding themselves better prepared, and better qualified, than white applicants for the same jobs
The final “lost generation” assumption worth unpicking is that recessions are bad for everyone. Some people can turn the situation to their advantage in the long run. Paul Gregg told me that there are two types of typical downturn winner—and added that it was possible to predict who they would be. “The first are the people who return to education, who otherwise wouldn’t have done. The second, who are slightly more common, move to self-employment, to set up their own businesses, things they might not otherwise try. They will be less ‘safety first,’ less risk-averse. They are, for example, more likely to be smokers.”
And there are also those who have the personal qualities likely to see them through any tough patch: focus, discipline, confidence, drive and a capacity for hard work. In researching this article I met one such young man, 17-year-old Sam Tarneberg. Sam lives in a deprived area of southeast London where youth unemployment is rising fast. Yet he’s an example of the sort of young person likely to survive a recession untouched. He left school last year, aged 16, with good GCSEs. Both his older brothers had gone to university, and he had been expected to do the same. But he told me with some pride that, after a year on a hospitality and catering course at Lewisham College, he had landed a job as a trainee chef at the Mandarin Oriental Hotel. “I always know what I want to be doing in three years, but then I get angry if things don’t go the way I want them to. Ideally, by the age of 27 I would like to have my own restaurant. Preferably abroad,” he told me. Sam saw his decision to leave school at 16 to train as a chef as almost a form of rebellion—his parents and older brothers all went on to higher education, although his father ended up driving an ambulance (which he hated), and his mother worked in a library. But despite this rebellion, Sam still saw the importance of good qualifications. “I’m definitely going to need business courses at some point—I’ve got plans for opening up businesses,” he said. “You’ve got to aim high—reach for the stars, and hopefully you’ll get to the treetops.”
Previous recessions have produced unlikely winners and losers, too. In the 1970s Howard Williamson, now professor of European youth policy at the University of Glamorgan, wrote a famous study of a group of teenage boys from an estate in south Wales. More than two decades later he returned to find out how his subjects had fared, publishing his findings in The Milltown Boys Revisited. Virtually all of the group had left school and taken manual jobs. When those jobs started to disappear in the late 1970s some drifted into petty crime or joined the dole queue. A few never regained a hold on the legitimate labour market. Others spotted an opportunity. “Had the economy been better, most of them would have just slipped into the unskilled working-class jobs their older brothers and parents were doing,” Williamson told me. “Those with a bit more talent and ability would never have been forced, if you like, to seize the moment that was presented to them. A lot of them didn’t seize it, but a handful came through rather well”—some by starting businesses. Why, I wondered, did they succeed? “It’s difficult to tease out,” Williamson said. “Some of them displayed more resilience, and coped with risk more effectively. Perhaps that was attributable to the different schools some of them went to. I’d guess that the Catholic school helped—it was more pushy in terms of values, discipline and qualifications.”
The long-term effects of today’s downturn are uncertain. Young people may fare especially badly—or the picture may be more complicated. But recent rises in youth unemployment are a symptom of a deeper, more intractable problem. After a decade of reform under Labour—which has thrown everything from Sure Start programmes to the New Deal at the socially excluded—young people who emerge from Britain’s education system with few or no qualifications still do badly. Even in times of economic prosperity we had a long tail of underachievement that leaves as many as one in ten facing educational and economic failure. During the boom, this was easier to ignore. But for many of the million-or-so young people looking for work, the recession is not the disaster it might seem. Many have barely noticed it—because they are so far from being ready for the labour market at all.
Among them is Edhilson Bernardo, 19, who I met recently at a training centre run by the Rathbone organisation in Hackney. Edhilson told me that for him, the biggest part of the battle had been staying out of trouble and finding something legal to do. The staff at Rathbone—a charity that helps troubled young people—looked at him with almost parental pride, and told me he’d improved greatly since they first started working with him a few months ago. Most of his mannerisms spoke of a tough, streetwise kid, yet as he talked his hands made little motions that betrayed a nervous energy. He messed about at school and left with no qualifications. Then he started looking around for ways to get rich. “I was looking up to older people in my area,” he said. “They were making money, they had nice cars, plenty of girls looking at them. I got myself into a lot of trouble selling drugs and stuff like that. I never actually seen big money like that before, in my hand. It was exciting.”
It all came to an ignominious end, with Edhilson doing time on remand for dealing heroin and cocaine. Relieved to be given only community service, he decided to change. But since then, and like many of his cohort, he has had trouble seeing the way ahead. He dropped out of an art and media course and then a youth work course before coming to Rathbone to do a course called “Entry to Employment.” Lee Willows, a director at Rathbone, explains that the problem is not so much the recession, or even a lack of jobs, but getting unqualified young people prepared to go for the jobs that are actually open to them. “We’re getting the sense here that there’s still a high number of entry-level jobs in London. Our problem is getting young people to understand that while they may want to earn £20,000 or £30,000 a year, if they get a job in this office, or that supermarket, they can create a work record for themselves,” he said. “They’ve got to develop a work ethos before they can start.” Edhilson, with his criminal record, is an extreme case. But he is the type of young person whose unemployment is caused not just by the recession, but by a mix of poverty, family breakdown, false expectations and a labour market that—even in the good times—had increasingly little to offer the unqualified.
Edhilson is also typical of many young people who emerge from education to become “Neets.” Paul Gregg points out that their number has risen since 2004, after a slight drop in the boom years. “The Neet problem was masked by low levels of youth unemployment generally,” he says. “And while the recession is bringing it to light now, there is a long-term problem here… It isn’t as bad as it was in the early 1980s, but it isn’t being dealt with.” Gregg is sceptical, too, that government efforts—such as the “guarantee” by Gordon Brown in September 2009 that all young people out of work for ten months will get a job or training—can make a difference. These measures, he thinks, will reach only very few of those unemployed, while employment schemes need to carry a much heavier element of compulsion, and the possibility of losing benefits. If not, they risk being seen as worthless by employers. And in any case, these short-term anti-recession moves are unlikely to solve the deeper problem. In the past, underqualified, underprivileged young people would probably have found their way into jobs, as my contemporaries at school did, through apprenticeship programmes or family networks. But in a changed labour market where family connections hold less sway, and where apprenticeships are harder to come by, it is these kinds of young working-class people who are left stranded. If we are facing again the threat of a “lost generation,” it is not caused just by the recession but by these other, much deeper, factors too.
With these thoughts in mind, I turned back to my own classmates. Which ones were equipped with the means to come through and which would have faded into the background? Of Danno, who left school without qualifications, I could find no trace—I suspect that after an early spell of unemployment he may have spent his life in semi-skilled jobs. I found a mention on the internet of someone with the same name as Nicky working in a white-collar job in Manchester—but I couldn’t be sure it was him; he had a common surname. Colin, on the other hand, recently updated his Friends Reunited entry to say that he was running his own software company. Even among that earlier lost generation, there were some with qualifications—and an eye for the main chance—who were always going to find their feet again in the end.