Jobless total to reach ‘grim milestone’

TUC hits out at creation of a ‘lost generation’ of young people unable to find jobs Youth unemployment is expected to reach a record high of close to 1m – one in five 16 to 24-year-olds – when the latest jobless figures are released at 9.30am on Wednesday. The TUC, which fears a “lost generation” of young people effectively locked out of the employment market, said Britain was likely to pass another “grim milestone”. Official jobless data is expected to show a significant rise in the overall number of people out of work and the TUC said it was concerned the latest earnings figures would continue to trail inflation, leaving workers to suffer an even longer period of real terms wages cuts. Figures for the quarter to January showed the number of unemployed 16- to 24-year-olds increased by 30,000 on the quarter to reach 974,000, the highest figure since comparable records began in 1992. In the same month, earnings were 2.9 percentage points less than the retail price index measure of inflation. The latest unemployment figure for the three months to February could show the earnings gap rising to more than three percentage points for the first time since June 2010. The headline figures for the claimant count and employment could improve on the previous month, boosted by the recruitment of 30,000 census workers. But Alan Clarke, economist at BNP Paribas, said the economic situation meant there was not enough private sector job hiring to compensate for public sector cuts and the overall employment picture was static. The TUC warned the figures disguised huge falls in real incomes, made worse by the loss of tax credits and cuts in government spending and services. TUC general secretary Brendan Barber said the declines in living standards were causing real pain to low- and middle-income families. “The country could be passing another grim milestone with youth unemployment hitting another record high. The government’s decision to scrap the Future Jobs Fund, months before its poorly funded replacement is due to start, has helped drive the rise in the number of young people out of work. “Scrapping Education Maintenance Allowance and hiking university tuition fees will only further reduce the job chances of young people and, with inflation rising at over twice the level of earnings, things aren’t looking pretty for those in work either. Employers have complained that one barrier to retaining young people in the workplace is the adult minimum wage, a requirement that boosts the wages of 21-year-olds. However, the National Institute for Economic and Social Research said evidence showed that as low-skilled young people became entitled to the higher adult rate of the minimum wage, their employment rate actually went up. The research, funded by the Low Pay Commission and the Economic and Social Research Council, shows that, on turning 22, the employment rate among low skilled individuals increases by about 2-4 percentage points. “In other words, a higher minimum wage – for this group, and in the relevant range – does not appear to harm their employment prospects – indeed, if anything, the opposite,” the report says. The independent thinktank said the findings seemed counterintuitive but “there are perfectly rational explanations”. It said the main focus was in a change in attitude among jobseekers rather than employers. “The results here are consistent with the hypothesis that on turning 22, young low-skilled people find work more attractive compared with when they were 21, because the wage on offer has increased. This may induce them to increase participation in the labour market, or to increase their job search intensity,” it said. Unemployment and employment statistics Economics Unemployment Social exclusion Public sector cuts Public sector pay Phillip Inman guardian.co.uk

Posted by on April 13, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.