Lifestep’s Theodora Clarke publishes article on youth unemployment at Bow Group

Why is youth unemployment rising in the UK and how do we reduce it? By Theodora Clarke

For the first time in nearly a year, the latest ONS figures for youth unemployment reveal a positive trend.  The number of 16 to 24 year olds unemployed dropped by 9,000 in March to just over 1 million.  This is good news but clearly this is still a major issue. Whilst we may be seeing early signs of a recovery, more needs to be done to tackle this very real problem.

The side-effects of youth unemployment are both economic and social. In terms of the economy, youth unemployment impacts in much the same way all unemployment does: increased benefit payments paired with lost income-tax revenues result in a massive black hole for government finances. This year alone, high youth unemployment will cost government £4.8bn in lost tax revenues and unemployment benefits, and cost the economy £10.7bn in lost output.[i]

Society is paying the price as well. The riots of last August are still fresh in our minds as a timely reminder of the devastating effects of a lack of opportunities for our young people. A disillusioned generation are entering the worst jobs’ market in a generation.  Youth unemployment is a prevalent issue and something that needs to be addressed in order to improve their lives in the future.

It is worth then considering the causes. With an economy in recession there is always going to be a cyclical unemployment.  Put simply there is not enough demand in the economy to provide jobs for all those who want to work. This represents a macroeconomic challenge for the government where there is no quick fix solution. The problem is made worse for the Coalition, who have inherited an economy with unprecedented levels of debt. Under Labour for every £4 spent by government, £1 was borrowed. Our UK debt had got so big that we were spending £120 million every day just paying the interest – and that bill is getting bigger.

The Government therefore simply does not have money to spend to tackle the issue the way previous governments have had; an aggressive fiscal policy is no longer an option.

The Government has however committed £1 billion to the Youth Contract. The initiative is their version of Labour’s Future Jobs Fund and seeks to address the low level of demand for young people’s labour. Essentially the scheme gives the private sector wage incentives of up to £2,275 to “hire a hoody,” with a view to employers taking on an extra 160,000 workers. This is in conjunction with Work Experience initiative – similar to Labour’s 3-week “Work Trial” programme – which offers 2-8 week placements that can be taken while claiming job seekers allowance.  Last year’s Budget provided an extra £180m of funding to allow for an additional 50,000 19+ Apprenticeships across the next four years. An important step taken by the Department for Work and Pensions was also to support jobseekers by allowing them to undertake work experience for up to eight weeks while still claiming out-of-work benefits. This crucially allows young people to build their skills and removed a financial barrier.

All of these initiatives from the Government demonstrate that they are taking the right steps to tackle the long-term consequences of people being NEET. Yet still more can be done. It may be helpful to look at how other countries are tackling the problem. Across Europe youth unemployment figures are staggering; Spain’s youth unemployment rate eclipsed 51 per cent in March. It was the same level in Greece and Portugal and Italy’s rates are roughly 36 per cent. For the Eurozone as a whole, youth unemployment sits at 22 per cent. Yet one country stands out from its neighbours by bucking the trend; Germany has managed to keep youth unemployment at the relatively impressive rate of 10%.

So how have Germany managed to maintain this feat? The answer lies in Germany’s dual education system. In Germany, more than half of each age-group graduate from dual training programs in which they simultaneously earn academic credentials along with gaining work experience, rather than attending just classes like in many other countries. The system trains 1.5 million people annually with 90% successfully completing the course.  It benefits future job applicants in that it brings them closer to the job market and teaches them the practical skills that cannot be gained by simply sitting in a classroom. As a result, employers have less risk when taking on young workers.

It would be foolish to suggest that simply replicating Germany’s model will solve our employment problems. However, I do believe that aspects of the German model can be taken and replicated here in the UK. Academic achievements are no longer enough to guarantee employment. With employers already nervous about taking on unskilled workers, practical on-the-job experience is a necessity. This is applicable to university graduates and NEETS alike.  In this sense, the Youth Contract could prove to be very successful.

Of course youth unemployment is directly linked to the bigger problem of an economy in the midst of a recession. A country that is growing needs workers to fuel the growth. Unfortunately, we are not experiencing such high levels of growth. But there are small signs that things are picking up. Youth employment – albeit very slightly – is up, and we need to build on these positive signs. The burden does not lie only with government, businesses or individuals. Tackling youth unemployment is a collective effort. The government has to keep supporting businesses to take on young workers; businesses themselves need to take a risk training young workers, while young workers need to reward such businesses with hard work and a positive attitude.

In order to help the next generation we need to ensure they have the skills they need to compete in a global economy and give them access to good education and training. We also need to encourage employers in both the public and private sectors to offer more work experience, internships and opportunities to young people. Time is running out for “the lost generation,” and while the issues at hand are neither straightforward nor easy to deal with, the time to act is now.

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[i] The National Institute of Economic and Social Research (NIESR)

This article was first published in Crossbow Magazine by the Bow Group, July 2012.

http://www.bowgroup.org/sites/bowgroup.uat.pleasetest.co.uk/files/Crossbow%20-%20July%202012%20%283MB%29.pdf

Lifestep offers UpRisers Valuable Careers Advice

Talia Chirouf – UpRising’s summer intern 2012 – talks about Lifestep’s day with the UpRising students.

On a morning so grey and rainy that you might be at risk of seasonal depression in June I gathered with UpRisers at the Young Foundation for the Lifesteps employability training session. One is always at risk of giving in to the rather apocalyptic and hopeless view of the graduate jobs market; however Lifesteps provided a much needed fresh and dynamic approach and certainly brightened everyone’s day.

There’s always that tendency to treat a job application as a burden, and all too easy to find yourself going through the motions, often reproducing the same application answers or covering letters time and time again. Apathy certainly plays a part, but it’s misunderstanding too. What is that question on that application really asking you? What do you put in a covering letter? More importantly, what do you leave out? What do you say if you’re asked in an interview what kind of biscuit would you be and why? Sometimes applying for a job can feel like walking a tightrope, blindfolded, i.e. you have no idea where you’re going with it. Lifesteps have put together a programme which takes all the mystery out of the graduate jobs market and enables you to plan an organised path through any application process.

The session was broken into three parts – CVs, covering letters and interviewing techniques (the latter involved UpRiser Rofikul as a brave guinea pig to sit a mock interview in front of the entire group – just as terrifying as it sounds I’m sure!). We learnt to think about what skills were desirable to employers, and how we could demonstrate them verbally and on paper by using real life examples as evidence. It seems so simple but linking competencies to experience is crucial to presenting yourself successfully to an employer.

Paul de Zulueta, CEO of Lifestep, emphasised the importance of ‘being that 5% better in order to make yourself 100% better’. He encouraged us to go the extra mile for a job you really wanted – for example hand writing your covering letter and delivering it to the potential employer of your choice by hand. Theodora Clarke, Head of Programmes at Lifestep, gave us the insight into her experience as a recruitment manager, highlighting once again how crucial it is to get spelling and grammar correct and making the most of the first 5 inches of your CV as this is all you see when you open the document in an email.

We were encouraged to go off into pairs and groups and get used to talking about ourselves in relation to our existing skills, and those which required development. Looking at real CVs and covering letters helped us to identify pros and cons which we could once again link back to our own templates. The session was at all times interactive, no long presentations, just information and then activity to test what you’ve learnt.

What came across most notably was the unpretentious nature of the training, the idea that it was simple adjustments to the way you presented yourself, your CV and your skill set which would make the real difference. That little bit of extra effort would pay off and was worth it, because although applicants for jobs were high, most people wouldn’t go the extra mile. I certainly felt that this gave me confidence to approach job applications and interviews with new meaning and a clear structure.

Although I am no certified UpRiser, I was proud to be associated at least on this day, as the Lifesteps team commented on the high quality of CVs and participation in the session. I know they were impressed by the ambition and successes already attributed to the UpRisers and knew their advice was not falling on deaf ears, that each person in the room would take something from the day and apply it to themselves to develop further.

I certainly feel as though this was a real highlight of my time as the UpRising intern, a great opportunity to mix with the programme participants in a fantastic learning session which offered matter of fact, practical information which is applicable across sectors and career levels. I’m sure I gained as much from the session as both those still at university and others who have been in the jobs market longer than me. All in all, very inspiring and thank you very much Lifestep!