23.02.11: PEF/Demos warn of 20% youth unemployment 'norm'

The Private Equity Foundation and think tank Demos have warned youth unemployment could hit 1.2 million over the next five years.

They warn that the numbers of young people not in education, employment or training published by the ONS today (Thursday) fails to accurately show the full extent of the youth unemployment crisis. The forthcoming report The Forgotten Half exposes the inadequacy of level 1 and 2 NVQs that offer little or no protection from unemployment, and are shown to harm – rather than boost – young people’s earning potential.

Over 230,000 16-18 year olds who will leave education with NVQ levels 1 and 2 will swell the ranks of unemployment causing a 23 per cent increase on current numbers. PEF/Demos warn that though 10-15 per cent levels of youth unemployment have been the norm throughout the 1990’s, the current recession and education failures risk making 20 per cent youth unemployment ‘the new normal’ with spikes well above this.

Recent figures put the number of unemployed 16-24 year olds at 965,000.  This represents 20.5 per cent of 16-24 year olds in the labour market (approximately 4.7 million) and excludes those in education.  Based on an analysis of returns to wages, young people with NVQ 1 and NVQ 2 do not receive any wage return, meaning that their qualifications are of little to no value in the current labour market if not supplemented with an apprenticeship.

Based on the 2009 Provision Participation Rates published by the Department for Education, there are approximately 230,000 young people 16-18 gaining these qualifications without doing apprenticeships. When these young people enter the labour market (bringing the total to approximately 4.9 million) it is likely to bring the total number of unemployed 16-24 year olds to 1,195,000.

To read The Forgotten Half by the Private Equity Foundation & Demos click here