The jobless total for those aged 16-24 in the UK has exceeded 1 million—the highest level ever recorded. This follows a dramatic rise in UK unemployment in Q3 which currently stands at around 2.6 million.
The Office for National Statistics (ONS) states the jobless rate hit 8.3% with 1.6 million people recorded as out of work and claiming Jobseeker’s Allowance in October.
This follows the Bank of England’s decision to cut its growth forecast for 2011-12 from 1.5% to 1% with its Governor, Sir Mervyn King, warning Britain’s economy could stagnate until the middle of next year.
The desperate figures have been blamed on fallout from the Eurozone crisis in addition to a swathe of government spending cuts. In the rest of Europe: Spain and Greece are fairing worst in terms of unemployment with figures of 45% and 43%, respectively. Ireland and Italy are not doing too much better—both with close to a third of their workers out of a job. France, like the UK, has an unemployment figure close to the EU average of 21%, while Germany remains the best place to find a job, with unemployment currently below 9%.
Starting next April the UK government will launch its ‘Youth Contract’ which aims to provide over 400,000 new work places for young workers, over a three-year period.
A key aspect of the scheme includes offering employers wage subsidies worth GBP 2,275 to encourage them to take on young workers. Launching the initiative, Nick Clegg, Deputy Prime Minister, explained, “The aim of the Youth Contract is to get every unemployed young person earning or learning again before long term damage is done. This is a GBP 1 billion package and what’s different about it is it gets young people into proper, lasting jobs in the private sector. But it’s a contract, a two-way street: if you sign up for the job, there’ll be no signing on for the dole—you have to stick with it.”
Critics argue the move is simply a knee-jerk reaction, and too little too late. The move comes at an inopportune moment just as the UK Government also announced measures which would make it easier for employers to dismiss staff. With rising unemployment and wages failing to increase as fast as inflation, economists have raised concerns that growth will stagnate even further and it may take years for the UK to get back on track.
Paul Arkwright
Publisher
