Posts Tagged ‘youth unemployment’
Wednesday, April 21st, 2010
“The recovery is underway but it will not be strong enough to bring the millions of new unemployed back to work” according to OECD Secretary-General, Angel Gurria, in a meeting with G20 labour ministers in Washington yesterday.
According to Gurria the major policy challenge is to balance two apparently contradictory needs: to tackle unacceptably high unemployment and simultaneously reduce unsustainably high fiscal deficits. “We expect 1.9% average GDP growth in the OECD area for 2010 and 2.5% for 2011. Much of the recovery is still policy-driven; but this can’t go on for long.”
“The OECD average fiscal deficit is close to 10% of GDP, while public debt is expected to reach 100% of GDP by 2011 (30 percentage points higher than before the onset of the crisis). Even if consolidation were sufficient to bring public budgets back to balance by 2017, debt-to-GDP ratios would still exceed pre‑crisis levels in most countries.”
 Will the recovery be sustainable initially with little increase in employment? On top of this OECD estimates also suggest that OECD countries may have lost over 4% of their output potential as a result of the crisis; half of it because of higher unemployment.
It is also felt that even in those countries that managed to contain job losses by widespread cuts in working hours, the short-term labour market outlook is not rosy. They face a serious risk of a “jobless recovery” because firms have ample margin to respond to the increase of demand by raising working hours before they start hiring new workers in large numbers again.
Gurria suggests three priorities. “First, support for labour demand needs to evolve from preserving jobs to jumpstarting job creation. Second, effective re-employment services, combined with adequate safety nets, have a key role to play in promoting a quick reintegration of jobseekers into jobs, while fighting poverty. Third, policies to prevent a “lost youth generation” are a must.”
Tags: Employment, hours worked, recovery, youth unemployment
Posted in Employment, OECD, unemployment | No Comments »
Thursday, February 18th, 2010
In the three months to December, unemployment fell by 3,000 on the previous three months, to total 2.46 million. This gave an unchanged unemployment rate of 7.8%. There was also good news on the vacancies front, as these rose by 49,000 to 479,000. At the same time redundancies fell in the final quarter of 2009 by 36,000 on the previous quarter to total 168,000.
However, Yvette Cooper, the secretary of state for Work and Pensions said: “…we know things are going to be tough for a while and we expect further increases in unemployment before the summer.”
In fact, there was a surprising increase in the claimant count unemployment figures with the number claiming Jobseeker’s Allowance rising by 23,500 to 1.64 million in January 2010. Many commentators had anticipated a fall of about 10,000 in this figure rather than what turned out to be the biggest increase since July 2009. The treacherous weather in January may have had some impact on this total.
However, there are a number of unwelcome trends underlying the overall figures. For example, more people are taking on part-time or temporary work rather than applying for unemployment benefit – assuming they are eligible to receive it. According to the ONS the number of people in full-time employment fell by 37,000 on the quarter to reach 21.22 million, the smallest quarterly fall since the three months to July 2008. The number of people in part-time employment increased by 25,000 on the quarter to reach 7.67 million. There were 1.04 million employees and self-employed people working part-time because they could not find a full-time job. This is the highest figure since records for this series began in 1992 and it is up 37,000 on the quarter.
 Nearly 1 million young people under the age of 25 are unemployed in the UK. On top of this there is a great deal of ‘underemployment’ in the economy. In fact, the ONS estimates that there are 2.8 million people working fewer hours than they would wish to. So, although there is much less unemployment than we might have expected at this stage of the recession – some commentators had expected to see total unemployment reach 3.0 million when the recession began – the overall figures do mask an underlying problem with millions of workers on temporary contracts, taking on part time jobs and working fewer hours than they would have chosen.
In addition, the number of those out of work for more than a year, the definition of long-term unemployment, continues to rise. This figure was up 37,000 on the last quarter to total 663,000 which is the highest figure since 1997. Of even greater concern is the fact that nearly 1 million young people are out of work. This includes 198,000 16-17 year olds, and 725,000 18-24 year olds. Worse still is the fact that 190,000 young people have been out of work for a year or more. In fact, many have never started work, either since leaving school or university, and anecdotal evidence suggests that there are even more unregistered unemployed youngsters who are thinking of going back into the education process or have given up altogether.
As Yvette Cooper was quoted above, we know that the worst is not over yet. Almost without doubt, there will be further cuts after the election as public sector and private sector belts have to be tightened further. A lot of jobs are likely to be lost directly in the public sector and subsequent multiplier falls in demand could well impact the private sector as well. This means that a double-dip recession could still be on the cards.
Tags: part-time work, recession, redundancies, underemployment, unemployment, vacancies, youth unemployment
Posted in labour markets, unemployment | No Comments »
Monday, February 1st, 2010
Unemployment in the euro area was 10.0% in December 2009, which is slightly up on the 9.9% figure for November, and compares with 8.2% in December 2008. When the wider EU27 is examined, the unemployment rate was 9.6% last December which compares with 9.5% in November and 7.6% a year ago.
The figure for the euro area is the highest rate since August 1998 and that for the EU27 the highest since records started in January 2000. Eurostat has estimated that 23.012m were out of work in the wider EU in December, with 15.763m being in the euro area. There were rises of 163,000 and 87,000 in each area respectively in December 2009.
This compares with a UK unemployment rate in September to November 2009 of 7.4% which actually represented a fall in unemployment over the previous quarter. But within the EU there are large variations. For example, Netherlands has a rate of 4.0% and Austria is at 5.4%, but on the other hand Latvia has an unemployment rate of 22.8% and Spain 19.5%.
 There is a wide divergence in unemployment rates between EU member countries.
Not surprisingly, all member states have seen an increase in unemployment between December 2008 and December 2009. However the smallest increase was in Germany (7.1% to 7.5%0 and the highest in Latvia (11.3% to 22.8%).
There is even greater divergence in the rates of unemployment amongst the under-25s. In the Netherlands the rate is only 7.6% whilst it reaches a massive 44.5% in Spain and 43.8% in Latvia.
Tags: EU, unemployment, youth unemployment
Posted in European Union, unemployment | No Comments »
Wednesday, December 16th, 2009
There was a fall in the number of people claiming Jobseeker’s Allowance, otherwise known as the claimant count, in November according to the ONS today. In fact the number fell by 6,300 over the previous month to give a total of 1.63 million out of work. This is the first monthly fall in this measure since February 2008.
The other measure of unemployment, which is the more generally accepted on an international basis, is the latest three month figure for August to October 2009, which shows an unemployment rate of 7.9%, which was unchanged on the previous quarter. The number of people unemployed according to this measure increased by 21,000 over the quarter to reach 2.49 million. This is the smallest increase in unemployment since the March to May 2008 quarter.
 We may be seeing more jobs at the end of the unemployment rainbow, but many of them are part-time.
There was also an increase in the number unemployed for more than 12 months of 49,000 over the quarter to reach 620,000. There was also an increase amongst 18-24 year olds as the unemployment rate in this category rose by 0.9 percentage points to reach 18.4%, which was the highest recorded figure since these records began in 1992.
The number of people in employment increased by 53,000 in the August to October quarter, to give a rate of 72.5%, which was unchanged compared to the previous quarter. However, whilst this looks like good news on the surface, it is important to look at the breakdown of employment. In fact, there were falls in both the number of men and women in full-time employment, but a rise of 120,000 in the number of women in part-time employment. And, according to the ONS, there are now just over one million people who are either employed or self-employed, who are working part-time solely because they cannot find a full-time job.
As far as average earnings are concerned, the public sector continues to grow at a faster rate than the private sector. Average earnings excluding bonuses for August to October rose by 2.7% in the public sector but only 1.4% in the private sector. The government announced in the Pre Budget Report that it was going to cap public sector wage increases to 1%, but only from 2011.
Tags: average earnings, Employment, employment rate, unemployment, unemployment rate, youth unemployment
Posted in Earnings, Employment, unemployment | No Comments »
Thursday, November 12th, 2009
In the three months to September the number of people unemployed in the UK rose by only 30,000 when compared with the three months to June. This was the lowest increase for 16 months. According to the Office for National Statistics there were 2.46m people out of work in the quarter as measured by the Labour Force Survey. In fact, when we compare the current three month rolling average to that for the previous month, unemployment is actually down by 8.000.
This meant that the unemployment rate remained at 7.8% as it had been in the previous quarter. The highest unemployment rate since the war was in 1984 when it peaked at 11.9% and this reflects the current flexibility of the UK labour market at the present time, given that the current recession is a deeper one. The fact is that 1.4m people are currently working in part-time or temporary positions, even though they would wish to have full-time, permanent work.
The alternative measure of unemployment is of those who are currently out of work and claiming benefit. This figure rose by 12,900 to 1.64m in October which was the smallest increase for 18 months. The previous rise in September had been 20,600.
One figure of major concern is that of youth unemployment. The number of people between 16 and 24 who are out of work has risen by 15,000 to 943,000 compared to the previous quarter, to give a rate of 19.8%. David Cameron taunted the prime minister in the Commons yesterday with this fact, although Gordon Brown detailed a number of initiatives which the government had taken to reduce youth unemployment – all of which he claimed the conservatives had voted against. He also mentioned the fact that a quarter of all those in the youth unemployment group are also in full-time education. The figures regard them as being out of work even if they are only looking for a few hours work in a bar on a Saturday night.
Less encouraging figures relate to long-term unemployment. Whilst the overall rate is slowing the rates for the long-term unemployed are going up. Those out of work for more than a year increased by 13% over the past quarter to reach 618,000. At the same time, those out of work for 6-12 months rose by 12%.
Finally, vacancies only fell by 1,000 in the last quarter and redundancies dropped by 62,000 to 205,000. Some commentators believe that unemployment has already peaked and is now starting to fall.
Tags: redundancies, unemployment, vacancies, youth unemployment
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Thursday, October 15th, 2009
With unemployment popularly expected to peak above three million, most commentators were surprised by one measure of unemployment showing a tiny fall over the three months to the end of August. In fact, according to the Office for National Statistics, there were 2.469m unemployed between June and August, which was slightly fewer than the 2.47m recorded between May and July. We have not seen a fall in unemployment since the March to May quarter in 2008.
However, when the last quarter is compared to the previous quarter, there was a rise of 88,000 which reflects a total rise in unemployment of 677,000 over the past year. However, the rate of increase in unemployment is obviously slowing. The unemployment rate was 7.9% for the three months to August 2009 which is up 0.3 over the previous quarter and up 2.1 over the year. Again, these figures are on a three-month average. When detailed monthly estimates are examined it suggests that the unemployment rate fell from 8.2% in June to 7.8% in August. The UK’s official rate of 7.9% is well below the 9.8% in the US and the 9.1% average in the EU.
 Unemployment is not exactly back on track but appears to be heading in the right direction.
As far as the claimant count is concerned, which measures the number of people claiming Jobseeker’s Allowance, this reached 1.63m in September 2009. This is the highest figure since April 1997. But, this figure only rose by 20,800 over the previous month, which whilst bad news for those affected, again shows a downward trend.
Other figures show that the employment rate for people of working age was 72.6% for the three months to August 2009, which is down 0.3 from the previous quarter and 1.8 over the year. There was, however, a fall in redundancies over the quarter of 68,000 to 233,000, although this figure was still 85,000 up over the year.
Average earnings, excluding bonuses, increased by 1.9% in the three months to August 2009 compared with the previous year, which is the lowest annual growth rate since comparable records began in 2001. This should help to dampen inflation.
What is particularly worrying about the current situation is that there was a further rise in youth unemployment, from 937,000 to 946,000. This means that 20% of young people between the ages of 16 and 24 are out of work and this rises to one in three for 16-17 year olds.
Although the overall trend in UK unemployment is going in the right direction the overall total does hide some changes in the labour market. For example, there are almost one million people working on a part-time basis – and, therefore ‘employed’ – who are actually looking for full-time work. Also, there are another 443,000 people who are working on ‘temporary’ jobs. On the other hand, it could be argued that this shows signs of the flexibility within the UK labour market which many other countries do not have.
This could be the reason that Yvette Cooper, work and pensions secretary was able to tell the House of Commons work and pensions committee that: “It may be that the traditional large gap between what happens to growth and what happens to employment may be narrowing.”
Tags: average earnings, Employment, redundancies, unemployment, youth unemployment
Posted in Employment, unemployment | No Comments »
Friday, September 4th, 2009
There was a slight increase in unemployment rates in the euro area in July 2009 with a rise from 9.4% to 9.5%. The measure for the wider EU27 rose from 8.9% to 9.0%. This latter figure compares with an unemployment level of 7.0% in July 2008. It is estimated by Eurostat that just under 22 million men and women are now out of work in the 27 countries of the EU.
Within these 27 countries there is an enormous disparity in the levels of unemployment. For example, the unemployment rates are 3.4% in the Netherlands, 4.4% in Austria and 5.5% in Cyprus. By contrast, the rate in Spain is 18.5% with Latvia and Lithuania showing rates of 17.4% and 16.7% respectively. The UK’s rate was put at 7.7% in July.
The overall unemployment rate in the EU was the worst monthly figure for ten years and will obviously continue to put a dampener on consumer demand, which will hold back economic growth.
But, what is of greater concern is the continued level of youth unemployment amongst the under-25s, which has now reached 19.8% in the EU27. And, while the Netherlands only has 6.6% unemployment in this category, Spain has an almost unbelievable 38.4% of young people out of work.
In the UK we highlight the unemployment rate amongst the 18-24 years age group. Here, in the three months to the end of June, there were 722,000 young people out of work. This was up 46,000 on the previous three months. The government has responded to this by launching a “Backing Young Britain” campaign which pledges 85,000 opportunities for young people.
 Young people have become the biggest "losers" throughout the EU. The campaign has been backed by 150 top British employers. Morrisons has pledged new training for every one of its 36,000 employees under the age of 25, and the Government has committed to helping 45,000 young people into jobs in retail, tourism, leisure and hospitality. There are also 5,000 new opportunities, including apprenticeships, from companies such as Centrica.
Unemployment is particularly damaging for young people trying to get on the job ladder as employers are reluctant to take on youngsters who have not been able to find work for a year or more, and have not been able to develop a work ethic.
Tags: EU, unemployment, youth unemployment
Posted in European Union, unemployment | No Comments »
Wednesday, June 24th, 2009
The OECD has just released a forecast projecting that unemployment in OECD countries will continue to rise well into 2010, with the average unemployment rate rising to almost 10%. This compares with the latest figure of 7.8% for April 2009.
At the end of 2008 there were 37.2 million out of work in OECD countries but this is estimated to rise to over 57 million people by the end of 2010. This will give an unemployment rate of 9.9% which will be the highest level sustained since the 1970s. By contrast, in the last quarter of 2007, unemployment was at a low of 5.5% with 31.6 million being out of work by the end of that year.
“Unemployment will continue to weigh on national economies for a long time to come,” said OECD Secretary-General Angel Gurria. “Previous downturns have taught us that the jobs recovery will lag a long way behind the pickup in economic growth. The OECD is working closely with countries to adapt their policies in order to better help the unemployed and avoid high unemployment levels becoming persistent”, he added.
The organization also called on member countries to ensure that there were adequate financial safety nets in place to help those unemployed who were most vulnerable and to tackle rising youth unemployment as a priority.
To see the graphic which charts changes in unemployment rates from December 2007 to April 2009, click here.
Tags: OECD, unemployment, youth unemployment
Posted in OECD, unemployment | No Comments »
Thursday, June 18th, 2009
Although overall unemployment in the UK has continued to rise, with 7.2% of the workforce out of work, as discussed yesterday, the worsening situation for our young people has been largely overlooked.
The latest figures in the three months to April 2009 show that we now have 16.6% of our 18-24 age group, currently out of work. This is more that twice the figure for the workforce as a whole and is very worrying. In fact, the latest quarterly figure for unemployment in this age group was up 1.9% on the previous quarter and 4.3% on the same quarter a year ago.
The trend in the latest figures can be seen in the graphic below.
 Source: ONS
When looking at the 16-24 age group, there are currently 888,000 out of work, with the figure relentlessly climbing towards the one million mark.
TUC General Secretary, Brendan Barber responded to the latest figures by saying: “Youth unemployment is now at its highest level for 15 years. And it will get far worse when millions of fresh school leavers and graduates start looking for work in the coming weeks. Unemployment leaves a permanent scar on young people’s lives and Government must do all it can to stop joblessness blighting another generation’s lives.”
 The prospects are pretty grim for students leaving higher education this summer
The situation for youth unemployment is bad across the European Union at the moment. The EU measures youth unemployment as an “under 25 group” and the latest figures for April 2009 show that the youth unemployment rates are 18.5% in the euro area and 18.7% in the EU 27. A year ago, in April 2008, the figure was 14.7% in both zones.
The latest figure quoted by the EU for the UK in this category for February this year was 17.6% which was just below the EU average.
However, there is a wide disparity in youth unemployment throughout the EU. For example, the Netherlands has a rate of only 6.0% whilst in Spain the figure is an alarming 36.2%.
Anecdotal evidence shows that many UK students who have just completed their degrees this month have not been able to find jobs. Many are taking gap years and/or working for charities. The government has actively been encouraging more students to go on to university in recent years in order to raise our skill levels as a nation. But, if many of these highly qualified students cannot get employment, disillusion is going to set in. One consequence of the recession is that numbers of students who were planning to go to university are likely to grab a job after their A Levels if they are able to get one. In the current climate, who can blame them?
Tags: EU, recession, unemployment, youth unemployment
Posted in Employment, European Union, recession, unemployment | No Comments »
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