by Celia Hannon
Young people are being hit hardest by unemployment, and they'll be left holding the bill for the spending spree when it's all over.
While the debate still rages about who the biggest casualities of the economic downturn are in the short term (homeowners? bankers? the residents of Iceland?), David Blanchflower has been quietly making a powerful argument that it is young people who will be most deeply affected for the long term. In an influential paper on unemployment and at an RSA / V event yesterday he explained why.
Firstly, he draws attention to an interesting bulge in the youth population. From 1980 to 2000 the absolute and relative size of the youth cohort shrank. However, since 2000 the size of the youth cohort - the children of the baby boomers - has grown steadily, from 6.4 million (10.8 per cent of the population) in 2000 to 7.4 million (12.1 per cent) in 2007. From this year onwards, the proportion of 16 - 24 year olds will start to decline again. In itself that phenomenon may throw up some pretty fascinating trends (see the Demos project Anatomy of Youth for more research on this cohort), but when it is combined with the UK's poor record on youth unemployment it generates a pretty toxic mix.
In the UK 18-24 year old unemployment has made up a rising share of overall unemployment since the turn of the millennium. In contrast to this, there has been a declining trend in youth unemployment around the world. So, we already have an underlying problem in Britain. It will only be compounded by the fact that, when faced with an economic downturn, the easiest thing for companies to do is postpone recruitment rather than fire existing workers.
So should we care? V, the national young volunteers service, thinks we should, and has already asked the Government for flexibility in applying the criteria of the Future Jobs Fund to create a national public service scheme to create jobs for 18-24 year olds. And the evidence certainly suggests that a major intervention may be called for. According to Blanchflower, spells of youth unemployment could have harmful impacts on a number of outcomes - happiness, job satisfaction, wages and health - many years later.
If that wasn't persuasive enough, there also happens to be one very good reason why we will need this group to be economically active in the future; according to the Conservative party, national debt is now projected to grow to more than £1 trillion by 2013, which means total government debt per person will be £17,031. Someone needs to pick up the tab....