Young people and women hardest hit by unemployment, says ONS

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A report today in HR Magazaine announces that young people and women are the major casualties of the contraction in the labour market, according to quarterly figures released today by the Office for National Statistics (ONS). Unemployment figures for those under 25 went up by 66,000 in the quarter, to 965,000, the highest since comparable records began in 1992. Their unemployment rate rose to 20.5%, said the ONS. The number of male claimants of Jobseeker’s Allowance has fallen for 12 consecutive months, but the number of female claimants increased by 7,800 in the quarter to 449,200, the highest figure since October 1996.

The fall in part-time working of 62,000, down to a total of 6.69 million, occurred entirely among women. The number of people in work overall fell by 68,000, to 29.12 million, giving a UK employment rate of 70.5%, down 0.3% in the quarter. Inactivity was also up by 93,000, driven in large part by a growing trend in early retirement, which rose by 49,000. As in the previous quarter, the numbers of ‘unwilling part-timers’, those taking part-time work because they couldn’t find full-time employment, rose by 44,000 to reach 1.19 million, the highest figure since 1992. “This mini-recession in the labour market as a whole is turning into a major crisis for young people,” said Ian Brinkley, director of socio-economic programmes at The Work Foundation. “Young people’s employment will not recover significantly until employers start hiring them again in significant numbers and that depends on the overall state of the economy.

In the meantime, the Government needs to look again at levels of support for young people through temporary employment programmes and encouraging more apprenticeships and paid intern placements.” Samantha O’Byrne, head of resourcing at accountants Grant Thornton UK, which has won awards for its internship programme, agreed that the picture for young people was bleak. “It is particularly concerning that the unemployment rate for those aged 16 to 24 has reached its highest figure since comparable records began in 1992, having increased by 1.5% on the quarter to reach 20.5%, and shows that the Government really needs to sit up and take action to address the employment issue for our youth,” she said. “Many sectors reliant on consumer spending will struggle in 2011. This, coupled with the Government spending cuts set to take effect, could mean we will see further job losses across both the public and the private sector in the first part of this year,” she added.

The latest figures suggest that recovery in the private sector is still too weak to offset job losses in the public sector. Public sector redundancies were already running at 40% more than a year ago, and the recent spate of redundancy warnings means that this is bound to accelerate, warned Nigel Meager, director of the Institute for Employment Studies. “The figures again show the challenges faced by some groups of jobseekers. Long-term unemployment continues to rise, with 833,000 now out of work for more than a year. The disappearance of government programmes to help young unemployed, and the removal of the Education Maintenance Allowance, which encourages young people to remain in further education, will not have helped the situation. Being unemployed in their teens or twenties has an impact on young people’s entire working life, and policy-makers cannot afford to neglect this,” said Meager.

1 Comment

  1. Selena

    Part I:Alright I guess I might as well try to get this addressed once again. Won’t llkiey get a response, but can’t hurt, right?I think that maybe you are overlooking the impact of a “structural” issue: The interest in the private sector to maximize profits through increasing productivity *as the direct result of reducing labor costs.* This is a matter of directionality. We see it all the time: I go into a Home Depot and look around for a knowledgeable employee to help me buy a pipe to repair my kitchen sink. I can’t find any, so I walk out in frustration without buying anything. An opportunity for cross-selling with some related product is lost. Or I buy the wrong product and return it eating up labor cost in the process of doing so (customer support for the return process, restocking the shelves, etc.). Compare that to walking into your mom and pop hardware store years ago when the old man behind the counter went to the back to get your part even before you finished describing the problem. Companies reduce employees and labor cost to create profitability even though in the process, productivity gain is marginalized. I would buy more products at Home Depot if I had better customer service. In the end, the company could make more profit and be more profitable through markup on selling more products to me, but they pass up that form of profitability because they see cutting labor cost as low-hanging fruit. This process necessitates an ever continuing upward pressure on unemployment. A more traditional model is that you take an existing ratio of employee cost to profit and increase the profit in an absolute sense by adding more labor and producing more product (of course, there is a limit to that approach). I think that model is less prevalent than it used to be. Why? One reason is probably because of an increased emphasis on maximizing the return to the employees at the top of the corporate ladder at the direct expense of employees further down the corporate structure as seen by the dramatic increase in the ratio of CEO salaries to the average worker’s wages. This change is a manifestation of a larger shift in business methodology that filters down throughout all levels of business models: There is less emphasis on selling a product for a good price and more emphasis on creating a balance sheet that attracts investors because employees at the top of the chain benefit directly from stock performance. The value of leveraging the input of human capital as a benefit to the company has been diminished. Within certain bounds, increasing the $ in profit can be obtained in various ways. One way is to hire more employees and produce more product.

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