Labour politician Liam Byrne had the temerity to claim on Radio 4 this morning that youth unemployment had increased by one million rather than to one million under the Tories, as the figure is one million this would imply that there had been no youth unemployment when Labour were in government.
Far from it.
As the chart from here shows, things had been getting steadily worse since 2001 or thereabouts (under Labour), there was a huge leap in 2008 (under Labour) and the number has 'only' increased by about 100,000 under the Tories.
That increase will not come as a surprise to anybody who can remember the rules of thumb that a 1% hike in VAT leads to an increase in unemployment of 100,000 (so all things being equal, the 2.5% increase eleven months ago = 250,000 jobs lost, which the extra 2% NI makes worse); and that unemployment increases fastest for new entrants to the jobs market, i.e. for 16-17 year olds, chart from here:
There's another interesting chart over at Migration Watch giving another possible explanation, bearing in mind there was net migration last year of 252,000.
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10 comments:
The second plot is very interesting. Migration is surely a factor but I wonder how the huge increase in young people taking up higher education since ~1990 might influence it. Possibly adding a lag, particularly if we have seen a H.E. bubble and a bubble at the expense of other school to work transition options. N.B I'm assuming those in full time education are not represented in that plot (at least those not currently looking for a job).
QP, do you mean that all the young people who would otherwise have been unemployed a few years ago, but stayed on in education, are now doing some of the jobs which today's 16-17 year olds would be doing?
I suppose it's possible that the underlying rate of unemployment has hardly changed, if you add students to NEETS.
It appears that the bubble number of full time students started in around 1988, since when the number has gone up from 600,000 to about 1.5 million, in case that's any help.
I was glad when Chris Pissarides at the LSE had the courage to stand up to someone trying to claim that migration caused unemployment and told them what bollocks that was.
It hadn't occurred to me that the thinking behind the massive expansion of further education might have been to get the youth unemployment figures down at the expense of the youth themselves, but that's typical of Blair, I suppose. I was wondering why he did it, I thought it was just one of his whims, but now I suspect a more likely motive.
RA, logic says in the long run there is no correlation, but Migration Watch's charts say in the short term that there is a correlation. Of course, it may be that young people come to this country and fail to get a job, or that they displace Brit's from jobs, who knows?
B, I thought that everybody had assumed that the drive to get more people into HE and for people to stay on at school until 18 was just to massage unemployment figures. See also increasing school leaving age from 15 to 16 in early 1970s.
That MigrationWatch graph, like most MigrationWatch 'research', is total bollocks. It shows that there is a strong correlation between the number of people living in a local authority and the number of people living in a local authority.
Both sets of figures need dividing by the population so that the population size of the local authority is not a factor. If you do this, the correlation is practically 0.
DS, you are genius. I posted this one too early in the morning so I fell for it.
Perhaps that is why the coeff. of correlation is much lower for London (0.43) than it is for England excl. London (0.9) = because London boroughs are all a similar population size, but other boroughs vary enormously?
I assure you I'm far from a genius. I just remember MigrationWatch getting put down when they released this briefing:
http://www.newstatesman.com/blogs/the-staggers/2010/08/immigration-migrationwatch
DS, thanks, my honour is partly restored, they make the same point about London population sizes as I just did.
However immigration does put a pressure to reduce pay.
AC1
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