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Ealing and Northfield Onkar Sahota

Sahota doesn’t understand youth unemployment – or he is lying

The Gazette on Friday let Ealing and Hillingdon GLA member Onkar Sahota get away with a staggeringly innumerate letter. I don’t know if Sahota is ineptly rehashing Labour party spin or whether he is personally trying to deceive you.

In his letter Sahota mixes two misunderstood factoids with 200 words of polemic. The letter is about youth unemployment. Most of it can be ignored. It doesn’t follow from the factoids offered even if they were accurate or useful, which they are not.

His first factoid is:

… in Ealing there has been a 7.7 per cent increase in the number of 18 to 24-years-olds claiming Jobseeker’s Allowance for more than a year.

It sounds awful. It is true, but it is not honest. He might have told us it went up 11.4% the previous month. He might have told us that this number has shot up 8.4 times since the election. He might have explained what is going on.

This is claimant count (not unemployment) data from an ONS database called NOMIS. Click on the link: Aged 18-24 (> 12 months) – monthly from 2006. I have ringed Sahota’s 7.7% increase. This number has jiggled around between 10 and 50 from January 2006 and January 2012 and then quadrupled in the last 8 months. Long term youth unemployment up 4 times? Something has changed in the data, its processing, the benefits system or the underlying habits of this group. It has nothing to do with the economy. In fact the same quadrupling effect has been seen in Wales. What is going on?

The answer lies in the fact that the Coalition has reformed the previous government’s New Deal programme which pulled people off JSA after 10 months and gave them a training allowance instead (at which point they artificially dropped off the claimant count). If they failed to get work and re-applied for JSA they were treated as new claimants. Tory hero Iain Duncan Smith has ended this dishonest merry-go-round. Now you just stay on JSA whilst you train and if you get into work successfully you drop off naturally. If not you stay on and your long period of unemployment is honestly portrayed in the data.

You can read more in this House of Commons Committee paper, scroll down to para 25. Indeed the DWP says:

If the number receiving a training allowance or supported by the Future Jobs Fund are included alongside those on JSA, overall there has been little change [in the number of long-term 18-24 year-old JSA claims] between May 2010 and March 2012. The total nevertheless remains significantly higher than before the recession.

Essentially Sahota is trying to turn a quirk of the benefits system into a youth unemployment story. Maybe he just doesn’t know what he is talking about or is he actively lying?

Sahota’s second factoid is:

In Ealing there were 1,805 people of all ages looking for work last month, compared to 1,780 in May 2010.

First off he is wrong about it being all ages. It is just the 18-24 youth segment again but all durations of unemployment, see here and click on this link: Aged 18-24 (total) – monthly from 2006. He is being casual describing this as people “looking for work”, it is claimant count data again. Given the economic conditions inherited by the coalition only increasing the youth claimant count by 25 (1.4%) looks like standstill to me on the face of it. If you correct for the reform of the New Deal (take 160 out) which Sahota has unwittingly highlighted you could argue that youth unemployment in Ealing has dropped by 135 (7.6%) since the election. No great harm to young people in Ealing since the election then.

The big lie is quite obvious once you look at this data in the large. Youth unemployment in Ealing more than doubled under the last Labour government. It stood at 1,055 in January 2008 and shot up to 2,450 in September 2009. Every blip afterwards is a mere aftershock.

3 replies on “Sahota doesn’t understand youth unemployment – or he is lying”

I suspect youth unemployment would have doubled whichever government had been in power in 2008-2009, given that there was a global financial crisis.

As well as unemployment/low pay, young people now face huge housing costs. Many people are spending 50-75% of their income on rent and having to put off having a family because they can’t find anywhere big enough. Is the government doing anything to help with this?

Emily,

I have some sympathy with that point of view although I would point out that Darling had little room for stimulus measures as he went into that recession with a structural deficit of 5.2% of GDP. It is all the more ridiculous then for Sahota to pick out a one month change in a tiny number (210) that is rounded to the nearest 5 and almost entirely determined by the effects of the benefit system rather than the real economy.

I am painfully aware of the effect of youth unemployment. I was a youth in the early eighties when youth unemployment (and unemployment in general) was worse than it is now. One of the saving graces of this cycle is that it has been long and low in GDP terms but short and relatively quick in unemployment terms. I was grateful to be relatively sheltered in university education. Many of my contemporaries were not.

Reducing housing costs is very difficult. Reducing some of the silliness of Local Housing Allowance, part of the housing benefit system, should take out some of the artificial pressure driving rents up – before the election I had an estate agent complaining to me in my surgery that there were two rental markets. One for people spending their own money and an inflated one for people on LHA like the Acton Afghans.

In our country middle-aged, middle class people (like me) do tend to hoard property. This again keeps prices high. Building more houses is a large part of the answer and planning reform needs to be in there however unpopular it will be. We cannot have NIMBYism and cheap housing. Ask who votes and then ask which if any government would find it easy to implement planning reform, build more houses and drive down housing costs (and property values by implication).

When Darling halved capital spending in the 2009 Pre-Budget Report that reduced the capital available for social housing. The Coalition has not touched the capital budget – it has merely had to deal with the implications of Darling’s cap. It is hard.

Thanks for your reply Phil. It is certainly not an easy problem to solve, especially not in London as there is such demand for housing. There are a lot of older people with plenty of spare bedrooms while a lot of younger people who would like to start families are struggling to afford two bedroom places. It sounds like we are not the priority though, politicians are more interested in the older generation as they’re more likely to vote!

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