Youth unemployment February 24 2014, 0 Comments

As with adult unemployment, the level of unemployment of 16 – 24 year olds in the UK fell in the last quarter of 2013 to 917,000 – down 48,000 – with the unemployment rate now at 19.9% - down 1% - further indication that aggregate demand in the economy is growing. The drop affected only the 18-24 year old group, where the rate fell from 19.1% to 17.9% (734,000), with unemployment among 16-17 year olds actually rising from 36.2 to 36.4% (at 183,000). In contrast, 50-64 year olds are the least at risk of unemployment, with a rate of just 4.4%.

CPI inflation down to 2.1% December 18 2013, 0 Comments

More good news for the Chancellor and Governor of the Bank of England this week as the downward trend in inflation continued. November’s Consumer Price Index (CPI) grew by 2.1% in the year to November, down from 2.2% in October – just 0.1% off target.

Latest unemployment news September 04 2013, 0 Comments

The latest unemployment figures released by the ONS today provide a positive sign that the jobs market is improving, both in terms of rising employment, up 0.3%, and falling unemployment – down by 0.1% to 7.7% (down to 2.49 million).

Underemployment December 20 2012, 0 Comments

The ONS this week announced that underemployment in the UK has risen to just over 10% of the labour force, up nearly 50% since the start of the recession in 2008. Underemployment now stands at just over 3 million, affecting 20% of young people and concentrated in low skill occupations. The ONS defines the underemployed as those who are currently working and willing to work more hours than they currently do, and are available to start within the next two weeks. The underemployed are either looking for more work from their current job, or looking to move to a job with more hours. Underemployment is, of course, not to be confused with unemployment, where individuals are not working at all, or inactivity, where individuals who are of working age are not looking for work, including students, carers and the disabled.

Underemployment rates vary across the regions, with the highest rate in the East Midlands and the lowest in the South East. In 2012, 24% of part-time workers were underemployed, compared with just 6% of full-time workers. In a separate survey, the UK was found to have the second worst underemployment levels in the EU-27, with only Ireland experiencing more underemployment.

The rise in underemployment is closely associated with the downturn in economic activity following the onset of the 2008 recession, and reflects the underlying impact of an increasingly flexible labour market whose origins date back to the early 1980s. While recession has led to the wholesale shedding of full time jobs across Europe, workers in the UK have either taken up short-time working, thereby ‘saving’ their jobs, while the unemployed have taken up part-time work. In contrast, the picture across much of Europe indicates a reluctance to create or accept part-time work and underemployment.

There is, however, growing concern that in the UK the debate about rising unemployment and inactivity have directed attention away from, perhaps, the equally serious problem of underemployment. Underemployment may mask the underlying problem of insufficient work for the UK’s labour force, and also partly ‘explain’ the recent rise in employment as workers move between full and part-time jobs. It is claimed that rising underemployment in this recession is the reason that unemployment did not hit the 3 million mark, as in previous recessions. To a great extent the underemployed represent a relatively neglected group who sit between the more clearly defined ‘fully employed’ and ‘unemployed’.  What is especially worrying is the growing army of young underemployed who, at the beginning their working lives have increasingly low expectations about the quantity and quality of work available to them.  For those fortunate and gifted enough to get to university there is always the hope that the economy will have improved enough by the time they leave. However, for those hoping to join the labour market in the immediate future the prospects of full time work are low while the likelihood of an extended period of underemployment remains high.

Sources: ONS, The Telegraph

Youth unemployment October 10 2012, 0 Comments

Unemployment of young people in the UK in February 2012 was 1.03m – down from 1.04m in the last quarter of 2011. Despite this modest fall, observers in the UK and around the world, including the UK’s National Institute of Economic and Social Research and the World Economic Forum, agree that youth unemployment represents one of the most serious economic and social problems facing developed and developing economies alike. Youth unemployment of 1.03m (at 22%) means that approximately one in five young people actively engaged in the labour market (those defined as active) are looking for work, but cannot obtain a job.

Globally, some 75 million 16 to 24 year olds are unemployed. In some countries in the Arab world, up to 90% of 16-24 year olds are unemployed. Across the European Union, Spain tops the pile with youth unemployment at 47.1 per cent, with the lowest rate in Austria at just 7.3 per cent.

In the UK there are 7.3m young people aged between 16 and 24 in the UK – roughly two thirds (4.8m) are ‘economically active’ and one third are ‘economically inactive’.  The economically active are either working or available for, and seeking work - i.e. employed or unemployed - and the economically inactive are not available to work, or not seeking work. Most of these are students (1.8m).

Youth unemployment in the UK has risen consistently during the last three recessions – in 1993 it was 15%, and by 2008 it had risen to 19%, with the latest rate of 22%. It is clear that the UK is suffering from a longer term structural problem, as well as suffering severe bouts of demand deficient youth unemployment.

According to the Commission on Youth Unemployment, unemployed young people represent a financial time-bomb, with an estimated direct cost to the exchequer in 2012 of £4.8 billion and further costs to the economy of £10.7 billion in lost output. Of special concern is the number of long-term unemployed young people – defined as looking for work for 12 months or more - and those referred to as ‘NEETS’ – not in education, employment or training. In the wake of last year’s riots, concern is also focussing on unemployment among young black people.

So what lies behind the figures?

It is clear that young people face a number of significant challenges when attempting to make the transition from education and training to the labour market. While young people experience higher rates of unemployment than older generations their job security is lower, and they receive lower average pay. In addition, they are more likely to be employed on a part-time or temporary basis. Young people are also likely to be more proportionately affected by recession. Low-skilled youth show the highest unemployment rates. Ethnic minorities also seem to suffer higher rates of youth unemployment, although some economies fair better than others in this respect.

According to recent research undertaken at Manchester University, which compared the UK and the USA – unemployment affecting black youth was significantly higher in the UK. According to Professor Yaojun Li, unemployment figures for black men in the US over the last three recessions were up to 50% lower than in the UK. He believes that the affirmative action programme and requirements for public institutions to employ people from all sections of the population adopted in the US has helped reduce the unemployment rate among black people.


Many countries have introduced specific ‘active labour market policies' (ALMPs), including the provision of information and advice, the introduction of new types of employment contract and incentives to hire young people. Other policies include the provision of work experience and ‘job guarantees’. In many countries, specific vulnerable groups have been targeted, including early school leavers, disabled young people and those with few qualifications.

In Austria, some 40% of young people go into work-based apprenticeships and many attend vocational colleges, where general education is combined with practical employment skills. Somewhat surprisingly, only 20% follow an academic programme.

In the UK, as in the 1980s and 90’s, recent government policy has focussed on supply-side incentives, including the introduction of a Youth Contract, which includes an injection of £1bn to get young unemployed people working or studying. It also includes wage incentives worth more than £2,275 for each 18-24 year old an employer recruits or provides with work experience placements. There are also 20,000 incentive payments to support employers who create apprenticeships and £126m to help teenagers into education, employment or training.

In 2010 the European Commission launched its Europe 2020 Youth On The Move initiative, to encourage young people to become more flexible and mobile, and to provide the young with better quality information across from across Europe.

What is clear is that while such supply-side policies are essential to remove rigidities and restructure the labour market, firms will only take on workers when they themselves experience an increase in demand and are confident that this will be sustained. Given the lack of demand across Europe it is unlikely that youth unemployment will begin to fall in the medium term.

Link; Discover the top 10 worst countries for youth unemployment.


  • International Labour Organisation (ILO)
  • Eurostat
  • The European Commission
  • The Daily Telegraph
  • World Economic Forum (Davos)