We need to avoid another ‘lost generation’

A tiny green shoot one day, and then a chill wind the next.  Anyone hoping for signs of economic spring after Wednesday’s better news on inflation will have been bitterly disappointed by yesterday’s  unemployment figures.

The litany of grim statistics is very depressing

· We are now into the 3rd year  in which the jobless total has been above two million
· At 2.67 million (8.4 per cent) the latest rate is the highest for 17 years
· This is the eighth month in a row that unemployment has increased
· More than a million young people are now unemployed, the highest since comparable records began in 1992, and a rise of 73,000 in the last year
· Of those, nearly a quarter of a million have been unemployed for over a year
· Overall, 860,000 people have been unemployed for more than a year – almost a third of all jobseekers
· Almost half a million over-50s are now unemployed, up 39,000 in the last year
· More than 40 per cent of unemployed over-50s have been out of work for more than a year
· The North has been hardest hit  – a 22 per cent increase in the North West and a 13 per cent increase in the North East
· But the capital hasn’t escaped either – London also saw unemployment increase by 13 per cent in the last 12 months
· Only two regions in the UK, the West Midlands and South West bucked the trend and saw (small) decreases in unemployment.

This is a long list, but even so it isn’t exhaustive. Perhaps the biggest area of concern is unemployment levels among women. From September to December 2011 the number of men out of work increased by 16,000, but the equivalent figure for women is 32,000. The maths is easy and stark – women were hit twice as hard. One of the reasons for this is that public sector job cuts, long foreshadowed and now really beginning to bite, impact women disproportionately.  Another worrying trend is that people who want a full time job are having to take a part time one instead. The latest figures show that this type of working is at an all-time high.  It isn’t strictly unemployment, but it leaves people struggling to make ends meet, pushes some below the poverty line and very often means skills are being under-utilised.

So is there anything that can be done to boost employment levels?  The main answer, of course, is to get some real growth back into the economy. At the moment there is a precious little sign that the Coalition’s approach to deficit reduction is working, which is why IPPR has been pushing a plan B in which the deficit is brought down over a longer time frame, and in a way that is sensitive to the real-time economic circumstances. It’s a straightforward and common sense plan: bear down harder on the deficit when the economy is doing okay, ease up a bit when it is suffering – as now.

But more specifically, we want to see the government extend its new ‘Youth Contract’ and guarantee a job to everyone who has been out of work for more than year. This would mean the long term jobless being given a job at the minimum wage in local government or the voluntary sector. And they’d have to take it;  If they didn’t they’d risk losing their benefits.

Without such measures there is a real risk of creating another 1980s style ‘lost generation’ – a whole cohort of people who because of long periods on the dole find it very difficult to ever get back into the jobs market.  Across almost all groups in society and many parts of the country we now clearly have an unemployment crisis and more action is needed, and urgently, to tackle it .

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