Demos Daily: The Forgotten Half

Many students are about to leave universities and colleges, and face an uncertain future. It seems likely that the current crisis will cause a slump in youth employment, with research today from The Resolution Foundation finding that youth unemployment in the UK could rise by a staggering 640,000 this year. Yet it’s worth remembering that those leaving education already have a significant advantage. Back in 2011, our report The Forgotten Half found that when youth unemployment has been high in the past, those most at risk of suffering long-term economic hardship and unemployment were those who went into a job without a university degree.

Read The Forgotten Half here, and the introduction below.

Introduction

Youth unemployment is never exactly off the political radar but in the current context it has become a national obsession
as unemployment rates of 16–24-year-olds reach an 18-year high at 20.5 per cent. (1) Long-term unemployment for young people continues to rise. A recent report for the Prince’s Trust shows that the number of 16–24-year-olds claiming Jobseekers’ Allowance for 12 months or more has increased more than fourfold since before the recession—from 5,840 claimants in 2008 to more than 25,800 claimants in 2010. The implications of this are not just confined to these unfortunate job seekers, they ripple across the economy: according to this report, educational underachievement among the current generation will cost £22 billion. (2)

To tackle this phenomenon effectively, we must identify those young people most at risk of suffering long-term economic hardship and unemployment and ensure that the education they receive acts as a bulwark against the highly competitive labour market they face.

For a long time political attention has been fixed on the approximately 10 per cent of young people who are NEET—not in education, employment or training. And no wonder: the bulk of this 10 per cent is a frighteningly enduring group whose chances of success dwindle the earlier they join this infamous category, and the longer they remain in it.

In this report we cast the analytical net more widely, unpicking the journeys of a generation of young people who make the transition to work without going to university in the current context of a number of problematic political and economic developments. We do this in order to identify those young people who may be currently outside of the NEET group, but who are also at risk in the current climate.

For many, a university degree guarantees a good job and is the cornerstone of social mobility. Tony Blair famously made the benchmark of success in social mobility policy getting 50 per cent of young people to university. Yet, as the cost of a university degree has risen with tuition fees, to some young people its value seems to have diminished. At the time this report went to print (February 2011), the graduate unemployment rate had risen to a startling 20 per cent in the third quarter of 2010. (3) Against this background, it is increasingly likely that fewer young people will choose the university path to employment. And yet, even though university graduates are suffering in the labour market as well, they are still better prepared than those without a degree. In a labour market flooded with university graduates, young people who do not go to university are still starting on the back foot.

Using a range of longitudinal and qualitative data, we charted the ease with which young people who do not go to university navigate the changing skill demands of the contemporary labour market to find out whether their qualifications (which range from below basic literacy and numeracy to advanced vocational qualifications at levels 4 and 5) offered them a passport to economic security or undermined their employment prospects. What we found was startling.

We estimate that more than 230,000 16–18-year-olds (as of 2009) who are currently in full-time education are at risk of long-term unemployment when they enter the labour market. This could potentially swell the youth unemployment numbers (16–24-year-olds) to 1.2 million in the next five years, if current economic trends continue. This is because these young people are leaving education at level 2 or below with qualifications that show a zero return in terms of wages. Although some level 2 qualifications may provide young people with valuable skills, our research has found that it is only if they have qualifications at level 3 (the level of A-levels or equivalent) that protection from unemployment really kicks in. Specifically, we found that a number of analyses have all confirmed that level 1 and 2 NVQ qualifications offer almost no protection from unemployment and in some cases may even lead to negative wage returns over the life course. Unfortunately it is often those young people most at risk of becoming NEET who are pushed into studying for these qualifications. There is also an additional 160,000 young people aged 16–18 in employment without training. Although our report argues that being in work decreases the likelihood of being long-term unemployed, the quality of employment for these young people is generally poor, so they may be at risk as well in a competitive labour market.

The unacceptable quality of the educational offer to non-graduates is potentially the policy failure that will cement the poor life chances of the next generation and close the lid on prospects of a revival of social mobility in the UK.

This report

The NEET phenomenon has captured political attention in recent years, producing a wealth of research that helps analysts to better understand the drivers of disengagement and unemployment. There is increasing consensus that in order to tackle the NEET problem we need to intervene as early and effectively as possible. Previous research by Demos presented in the report Ex Curricula, (4) supported by the Private Equity Foundation (PEF), explored an early years and primary school strategy to identify and tackle those at high risk of becoming NEET.

This report takes a different approach: here we focus on the 35–45 per cent of young people who are neither severely
at risk nor fully protected from becoming NEET: young people who do not attend university and whose path to work
is perhaps much less straightforward than their graduate peers. There is a dearth of evidence about what happens to these young people post-school. What qualifications are they achieving, and do these qualifications put them in good stead in the current labour market? Are they receiving the skills they need to succeed in the labour market, as well as informative and impartial careers advice and guidance? What interventions or services might help to assist them to make a straightforward transition to work or further education?

The research presented in this report is based on qualitative interviews and focus groups with a wide range of stakeholders, including staff in schools and colleges, students in Years 10 and 11, young people between ages 18 and 24, career advisers, charities, local authorities and welfare to work providers.

It is based in two case study areas in the UK: Shoreditch in East London, which stretches across the London boroughs of Hackney, Islington and Tower Hamlets; and Burnley in Lancashire. Both areas suffer from high levels of deprivation and histories of poor educational achievement, but there are stark differences in their location and access to labour markets. In Shoreditch, 75 per cent of children grow up in poverty and 47 per cent in workless households, despite being situated between London financial hubs in the City and Canary Wharf. In Burnley, the demise of the coal industry has left a significant amount of worklessness among the population. With poor transport connections to London and other regional cities such as Manchester and Leeds, many people in Burnley feel isolated from employment opportunities.

Our research also included an international perspective, looking specifically at the German city of Hamburg and lessons that can be learned from educational reforms there, their model of apprenticeships, and the role of a charity that has been particularly successful in easing the transition from school to employment.

Research findings

Our findings reveal severe failings on the part of the school system to cater adequately for the needs of the ‘other 50 per cent’ — those not among Tony Blair’s 50 per cent going to university. The lack of high-quality work experience, effective preparation for work and quality vocational offers leaves many young people neither in a good position to find employment on leaving school, nor well placed to choose the best course of study or training programmes. We identify a number of failings with the current offer to the ‘other 50 per cent’, but also potential solutions, particularly the key role that the business community can play. We also highlight a number of effective programmes targeted at young people at risk, but argue that there is a need to improve the support that these young people receive. At present there is an overwhelmingly complex array of qualifications and options for young people to navigate. Our research suggests that local Connexions services are not providing a sufficient level of support for young people in school, and charities and private businesses need to play a much bigger role.

We recognise that education and training cannot solve all structural problems with the labour market. As a complement to the research in this report, we urge new efforts to make supply-side changes to the labour market to help young people who potentially face years of unemployment. We offer some suggestions for how such supply-side changes might be made, including offering incentives for employers to hire young people.

Ultimately this should be a sit up and think moment for schools and Government: the service for young people undertaking a direct school to work transition and those entering further education rather than university needs to be fully comprehensive and universal, as half of each generation of school leavers are in this category. A post hoc approach to youth unemployment, particularly in the context of a very poor youth labour market and sluggish economy, is simply not good enough: the work needs to be carried out before young people have left school, not once they are unemployed or in fragile employment.

 


(1)  ONS, ‘Labour market statistics for October to December 2010’, Statistical Bulletin, London: Office of National Statistics, February 2011; B Groom, ‘Youth unemployment hits record high’, Financial Times, 16 February 2011, www.ft.com/cms/s/0/4bf40396-39b5-11e0-8dba- 00144feabdc0.html#axzz1EmCO096l (accessed 25 Feb 2011).

(2)  The Prince’s Trust, The Cost of Exclusion: Counting the cost of youth disadvantage in the UK, London: The Prince’s Trust, 2010.

(3)  G Paton, ‘Graduation unemployment hits 15 year high’,Telegraph, 26 Jan 2011, www.telegraph.co.uk/education/ educationnews/8283862/Graduate-unemployment-hits-15- year-high.html (accessed 14 Feb 2011).

(4)  Sodha and Margo, Ex Curricula.