Rarely has a new prime minister in United Kingdom faced such difficult days with ongoing economic turmoil sparked by her and ex-chancellor Kwasi Kwarteng’s disastrous ‘growth plan’ announced in the mini-budget. Amid growing calls for her to resign, Liz Truss must look at areas from which she can derive some credit and the job market is one such place.
The push for growth was the focus of much of, Kwarteng’s announcement last month, including the introduction of support to encourage economically inactive over-50s back into the job market, many of whom exited during the uncertainties of the pandemic. This policy is an attempt to soothe an overheating labour market experiencing record levels of vacancies and to generally raise British labour supply.
But if Truss is committed to increasing labour supply there is another group who have a tremendous amount to offer the UK. There are 668,000 young people in the country who are known as NEET – not in education, employment or training.
This status carries with it the risk of serious economic scarring and negative long-term impacts on a young person’s earning potential, job selection and even mental health. Disadvantaged young people are twice as likely to fall into this category than their better-off peers, according to research by youth organisation Impetus, as mentioned by its senior policy advisor, Phoebe Arslanagic-Wakefield.
These people want to join the labour market too. They just need the right support to rush forward and embrace the future. Recent research from the Prince’s Trust and Learning and Work Institute shows that more than half of these young people say they are able to and want to work. The same research finds 84 per cent of NEET young people have employment or career aspirations over the next three to five years.
Despite the fact that the UK is missing out on the real contribution these young people can make to the shared economic future, they are in danger of being neglected by policymakers who may perceive the problem as intractable. The proportion of young people classified as NEET in the UK has declined by a mere 0.7 per cent in the last twenty years. But this does not mean it is a set feature of Britain’s labour market.
There are, several levers available to those willing to seriously look at this problem. For example, the introduction of a Kickstart Plus scheme, similar to the one in place during the pandemic but instead targeted at disadvantaged young people to provide a path into work. Such a scheme fits in well with the programme of supply-side reform former chancellor was wanting to pursue, increasing labour productivity by strengthening the skills of young people.
But beyond helping thousands of young people reach their potential and building a healthier labour market, there are very sound political reasons for Truss to charge her ministers with investigating and delivering on the support needed to move young people from NEET to EET.
In recent UK elections, unprecedented age variation in voting pattern has emerged, with fewer young people voting Conservative than ever before. In 2019, only 21 per cent of those aged 18-24 voted Conservative, down from 27 per cent in 2015 and 30 per cent in 2010. In short, the Conservative Party needs to win back those young voters.
Truss has a limited amount of time to prove her gamble will pay off and bring people onside. These young people left out of the labour market are a golden opportunity for Truss to help meet the high vacancies, improving labour supply for the long-term and increasing economic participation of a generation. (The writer is our foreign correspondent based in the UK)
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