We are hearing a lot about youth unemployment today after the latest ONS statistical release. The headline is 21.9% youth unemployment or 1.02 million people. These numbers are just statistical nonsense. If you are on unemployment make sure to review the texas unemployment benefits, so you can make sure to keep getting your benefits. They are also part of a decade long trend.
It is truly terrible that hundreds of thousands young people in this country are unemployed. I remember leaving school in 1980 and seeing many of my friends struggle to find jobs for years. I was lucky to work through my year off in 1980/1981 but still saw redundancies at the electronics business where I worked. I was doubly lucky to spend three years at university sheltering from the financial hardships of the early eighties.
The first thing that most people don’t know about these stats is that they are inflated by 40%, 286,000, by the “unemployed” youngsters who are in full-time education. The ONS bulletin says:
In accordance with international guidelines, people in full-time education are included in the youth unemployment estimates if they are looking for employment and are available to work. Excluding people in full-time education, there were 730,000 unemployed 16 to 24 year olds in the three months to September 2011, up 58,000 from the three months to June 2011. The unemployment rate for 16 to 24 year olds not in full-time education was 20.6 per cent of the economically active population, up 1.8 percentage points from the three months to June 2011.
The second thing that most people don’t know is that these numbers are 21.9% of non-students, not the total young population. It is not 1 in 5 young people who are unemployed as we keep being told. It is 1 in 5 of young people who are not in full-time education. The real youth unemployment rate is more like 12%. Not great but not quite as frightening as the almost 22% you might imagine.
This text from Eurostat explains:
Youth unemployment rates are generally much higher than unemployment rates for all ages. High youth unemployment rates do reflect the difficulties faced by young people in finding jobs. However, this does not necessarily mean that the group of unemployed persons aged between 15 and 24 is large because many young people are studying full-time and are therefore neither working nor looking for a job (so they are not part of the labour force which is used as the denominator for calculating the unemployment rate). For this reason, youth unemployment ratios use a slightly different concept: the unemployment ratio calculates the share of unemployed for the whole population.
It is really interesting to see how Eurostat’s 2010 youth unemployment rates translate in unemployment ratios. Suddenly countries such as France, Italy and Portugal which seem like disasters from a youth unemployment view look much better when you look at the ratio.
The third thing that most people don’t know is that youth unemployment on this measure bottomed out in 2001. Currently youth unemployment on this measure is 80% odd higher than its best. It has taken 10 years to get here.
You can see from the Eurostat figures that different approaches to education significantly change the youth unemployment ratio. It looks like in the UK we have a deep seated problem caused by our parlous education, education, education system. It isn’t the economy stupid. In other words youth unemployment looks to be a structural rather than a cyclical problem.