‘Lost generation’ fear as third of young are still on dole after six months

By
Steve Doughty
Last updated at 7:53 AM on 13th October 2009

Crisis: Long-term unemployment among the young is at its worst in 15 years

More than one in three young people on the dole have been jobless for more than six months – the worst rate for 15 years. The analysis from trade union research adds to growing evidence that the recession is giving rise to a ‘lost generation’. The long spell of looking unsuccessfully for work for 366,000 young people aged between 16 and 24 has bolstered the million-strong pool of Neets – those not in employment, education or training. The TUC’s figures saying that 39 per cent of young people who are
now jobless have been out of work for more than six months, means
Britain has reached a level of long-term youth unemployment not seen
since 1994.
Leading economist David Blanchflower said: ‘Rising youth unemployment is a national crisis.
‘Spells of unemployment, especially ones of long duration, hurt
young people later in their working lives, and that hurts the rest of
us.’
Mr Blanchflower, a former member of the Bank of England’s Monetary
Policy Committee, added: ‘We need to prevent these people from becoming
a lost generation.’
The analysis came alongside other estimates showing that men are suffering most from rising unemployment during the recession.This is because predominantly-male industries such as construction and the private sector have been hit hardest by job losses. The finding from the Chartered Institute of Personnel and Development conflict with the view of Women and equality minister Harriet Harman, who has set out her concern that women face greater difficulties during the recession. The CIPD’s estimates were based on current unemployment rates of 9 per cent for men and at 6.9 per cent among women. It said that during the recession the number of men on the dole had gone up by half, while the number of unemployed women has risen only by a third. More than one in 10 men will be unemployed by the middle of next year, the research said. The analysis said that since the Second World War there have been only two years in which a lower proportion of men were in work, in 1993 and 1994. Male unemployment is likely to peak at around 11 per cent, or 1.9million workers, the statistics showed. The CIPD also gave a warning about unemployment among young men, pointing out that one in five of those aged between 18 and 24 are on the jobless rolls. John Philpott, chief economist at the CIPD, said that the labour market had become more difficult for both sexes. But he claimed women were likely to feel greater pain in the future as cuts in public spending hit the public sector, which employs a higher proportion of women. He said: ‘It is likely that the relative position of women will itself deteriorate in the coming decade as real cuts in public expenditure have an adverse impact on public sector employment. ‘However, it is important to highlight the current plight of men in the labour market, not least because once the impact of recession and a “jobs-light” recovery is fully felt the proportion of men in work will probably have fallen to a record low.’  

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The real jobless total under Labour? SIX million, new research reveals

By
Tim Shipman, Deputy Political Editor
Last updated at 11:49 AM on 18th August 2009

Six million are out of work and claiming benefits, according to research which lays bare the true scale of joblessness under Labour.
The figure dwarfs the official rate of unemployment, which this month hit 2.4million, and is four times the number claiming Jobseeker’s Allowance.
It is expected to soar to 6.4million by the end of the year and 6.8million by the end of 2010, prompting fears that Labour has created a generation of benefit addicts.
‘Little incentive to work’: The figures have prompted fears that Labour has created a generation of benefit addicts
About one in six of the 37-million-strong working age population is out of work, according to the Policy Exchange think-tank.
This includes 1.6million on Jobseeker’s Allowance and 2.6million on incapacity benefit and its replacement Employment and Support Allowance - more than a million of whom the Government believes are perfectly capable of working.
There are also 736,000 on lone parent payments, 400,000 carers, 363,000 on disabled benefit, 182,000 on other income-related benefits and 95,000 who live on bereavement benefits.

The figures contain no overlap because each claimant is categorised depending on which of their handouts is the largest.
Under Margaret Thatcher’s government the jobless total never got above 4.9million, despite headline unemployment rates of more than three million. Critics accused Labour of concealing the true scale of unemployment by moving people on to other benefits.
In 1997, when Labour came to power, 93billion was spent on social security benefits, but by next year it will be 193billion, more than doubling in 13 years.
Policy Exchange used official Government figures and projections from Alistair Darling’s Budget and found that the six million jobless mark will be passed some time this month.
The number could even be higher, as with the exception of Jobseeker’s Allowance the figures for benefit payments have not been updated since February.
Neil O’Brien, director of Policy Exchange, said: ‘The narrow unemployment figures we are used to seeing tell you less and less about the real number of people who are trapped on benefits. ‘Our unreformed benefits system is too complicated. It gives people too little financial incentive to work, and too little pressure and help to find work. There’s nothing kind about leaving people to rot on benefits.’

Tory work and pensions spokesman Theresa May said: ‘These figures plainly show Labour’s complete failure to get to grips with our welfare system. ‘Too many people have been abandoned on out of work benefits and now sadly the recession has made their situation even more desperate.’
Liberal Democrat spokesman Steve Webb said ministers were ‘deluding themselves’ by focusing on narrow sets of figures.
But employment minister Lord McKenzie said Labour was doing more to help than the previous Tory government.
‘In the 80s and 90s recessions, people were left on inactive benefits without any support to ever get back into work, meaning individuals, their families and whole communities were abandoned,’ he said.
‘The Government is determined not to write anyone off, which is why we are investing 5billion now to help get people back into work. The Tories say we can’t afford to act, but the truth is we can’t afford not to.’

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U.S economy set to come out of recession later this year, claim economists

By
Mail Foreign Service
Last updated at 5:13 PM on 10th August 2009

Aggressive spending ‘helped world avoid second Depression’
Slow recovery: Nobel Prize-winner Paul Krugman said that the global economy was showing signs of stabilisation
The worst U.S. recession since the Great Depression will probably end in the third quarter of this year, according to a survey of top economists.The Blue Chip Economic Indicators survey of private economists showed
about 90 percent of the respondents believed the economic downturn
would be declared to have ended this quarter.In the clearest sign yet that the recession may be ending, the U.S.
Labour Department last Friday showed the jobless rate in the world’s
largest economy dipped for the first time in 15 months while workers’
hours and pay edged upward.The positive feeling about the state of the economy came as Nobel Prize-winning economist Paul Krugman said that aggressive tactics by the world’s Governments has helped to avoid a second Great Depression.Mr Krugman, who was speaking at a two-day world capital markets conference in Malaysia, said the worst of the global crisis was over, with economic and exports growth showing signs of stabilisation. But he added that recovery was likely to be ‘disappointing’ as government spending wasn’t sustainable in the long-run and unemployment rates continued to lag behind.There isn’t likely to be any ‘Phoenix-like’ recovery such as in the 1997-98 Asian financial crisis, where the economies expanded dramatically, led by a sharp rebound in exports, he said.’We have managed to avoid a second Great Depression … but full recovery is at least two years and probably more,’ Mr Krugman told the conference.Mr Krugma said that Asia is likely to see a faster rebound, than the U.S. and Europe, partly driven by the recovery in manufacturing exports.

It said a net total of 247,000 jobs were lost last month, the fewest in a year and a drastic improvement from the 443,000 that vanished in June. Still, the job market remains shaky. A quarter-million lost jobs are a far cry from the employment growth needed to put the national economy on solid footing.U.S. President Barack Obama has urged Americans to be patient and give time for his $787 billion stimulus package of tax cuts and increased government spending to take hold. Most of the money will flow in 2010.Mr Krugman said there was still room for the U.S. government to increase spending to boost growth, despite concerns over its swollen budget deficit.Mr Krugman, who teaches at Princeton University, won the Nobel Prize in Economic Sciences last year for his analysis of how economies of scale can affect international trade patterns. He also writes columns for The New York Times.He said there was a need to restructure the global financial system and impose tighter regulations to avoid a repeat of the economic crisis, but expressed concern that the momentum for reforms appeared to be easing.’We do not have the political will to do that just yet … I suspect clever people can still make a lot of money from the financial system in the next few years,’ he warned.Earlier, Malaysian Prime Minister Najib Razak urged regulators worldwide to jointly create a compatible, sustainable and effective surveillance system to prevent future market crashes. These could include keeping a close eye on risk-taking activities and having a common procedure for intervention if there are signs of irrational excess.’Over-reliance on self-regulation is a mistake,’ he said. ‘Global regulators should err on the side of investor protection and financial stability rather than rely on a “buyer beware” regulatory regime.’Singapore’s Finance Minister Tharman Shanmugaratnam and Hong Kong Secretary for Financial Services and the Treasury K.C. Chan warned against being too hasty, saying greater regulation of financial institutions mustn’t be at the expense of stifling innovation and growth.

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US economy beginning to stabilise says Bernanke

By James Quinn

Published: 8:10PM BST 21 Jul 2009

The claim came as he promised that the central bank is poised to tighten
monetary policy to combat inflation when the time comes.

Mr Bernanke, delivering his semi-annual economic testimony on Capitol Hill
warned, however, that persistently high unemployment rates could hurt
consumer confidence and slow the pending recovery.

“I want to be clear that we have a very long haul here, because even if the
economy begins to turn up in terms of production, unemployment is going to
stay high for quite a while, so it’s not going to feel like a really strong
economy.”

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Jobless rise is fastest since 80s

Unemployment is rising faster in this recession than at anytime since the 1980s, according to official figures.

Office For National Statistics figures also show that the current recession has hit the West Midlands hardest.

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New destinations

By James Melik
Business reporter, BBC World Service

There is no doubt the current recession will be the worst in a generation and migrants are changing their destinations as a result.

The hike in oil prices in the 1970s and 1980s caused a recession in the industrial world, but created a boom in countries with access to cheap energy - particularly the oil exporting nations. Read more

Germany sees higher jobless total

Germany saw its unemployment levels rise for the first time in nearly three years in December, according to government figures.

Unemployment rose by 18,000 for the month, higher than the 10,000 that had been expected by analysts, putting the jobless rate at 7.6%. Read more

UK job market weakening rapidly

The UK job market weakened rapidly in November as permanent placements declined at record levels, a new survey from Markit Economics suggests.

The drop in permanent and temporary jobs was faster than at any point in the survey’s 11-year history. Read more