"Ticking Time Bomb": Labour Market Adviser Warns of Growing Youth Unemployment Crisis

Strategic Insights -

The welfare bill in the UK is set to reach £100 billion by 2030, with 9.3 million people neither in work nor looking for a job, including 872,000 16 to 24-year-olds not in employment, education, or training. Labour market adviser Paul Gregg, chairman of the Labour Market Advisory Board, has warned that this is a "ticking time bomb" and proposes giving teenagers a job with nominal wages paid by the state to tackle the problem.

Key Takeaways:

  • The welfare bill in the UK is projected to reach £100 billion by 2030, with 9.3 million people neither in work nor looking for a job.
  • The number of 16 to 24-year-olds not in employment, education, or training (Neets) has risen to 872,000.
  • Paul Gregg, chair of the Labour Market Advisory Board, proposes giving teenagers a job with nominal wages paid by the state to tackle youth unemployment.
  • The "Youth Training Scheme" introduced in 1983 offered school leavers on-the-job training and a nominal wage, leading to over 500,000 contracted placements by 1988.
  • Gregg suggests that the Office for Budget Responsibility should take into account potential future savings when estimating the fiscal impact of the policy.
  • The rise in economic inactivity among young people is driven by factors such as school absenteeism, exclusions, and poor school experiences, as well as an increase in mental health conditions.
  • Gregg warns that the train of youth unemployment is coming down the track, with the risk of even more severe damage to employment, earning capacity, and productivity.

Statistics:

  • 9.3 million people in the UK are neither in work nor looking for a job.
  • 872,000 16 to 24-year-olds are not in employment, education, or training.
  • The welfare bill in the UK is projected to reach £100 billion by 2030.
  • 63% of those in poverty in the UK live in working families.
  • The Resolution Foundation estimates that scrapping the two-child benefit cap would lift 400,000 children out of poverty.

Sources:

  • Paul Gregg, chairman of the Labour Market Advisory Board, as quoted in The Times.
  • Centre for Social Justice think tank.
  • Resolution Foundation.