Plight of a lost generation
Follow @pwc_ukgovBy Dr David Armstrong, Partner, Northern Ireland
UK-wide, the loss of productivity directly related to youth unemployment costs £10 million a day. The NEET generation – young people not in education, employment or training - is on the rise.
A recent PwC study (Helping a lost and forgotten generation) examined the size and cost of the NEET challenge in Northern Ireland, where benefits payments are running at close to £5m a week.
Around 40% of Northern Ireland’s NEET population are already disadvantaged by literacy, numeracy and lifestyle issues such as alcohol, drug use and brushes with the law. They are increasingly disengaged from society and that disengagement is likely to become worse.
The NEET challenge is UK-wide, with most UK regions experiencing a similar – albeit less acute – experience, but other countries have successfully addressed it. Our research concluded that the Netherlands, Japan and Norway have remarkably low NEET populations. Indeed, Germany had actually managed to reduce the percentage of its NEET population, despite the recession and its impact on overall unemployment.
So, what’s to be done? Firstly, at the heart of a NEET’S strategy is education and early identification of those at risk and strategies to prepare them for and keep them in education. From the role of the parent to early intervention by the state, it’s easier to avoid the problems in the first place than try and fix them later - the importance of early years’ services to help children reach their potential is well evidenced.
Secondly, stronger links are also needed between education and business so that young people are better prepared for the workplace and the options available to them. Our role on the UK government’s Higher Apprenticeships programme is an example of where this is already happening. Real work experience, for example – delivering the ‘softer’ skills of team working, communications and problem-solving should be financially as well as career rewarding for both young people and employers. Government could consider a work experience or training guarantee, for all under-21 year olds unemployed for six months or more.
Thirdly, government too must become a real partner for change, to help foster an environment where businesses create jobs, take investment risks and offer opportunities to the workers of tomorrow. Smarter and more efficient business regulation has a role to play, as might a freeze of the minimum wage and simplification of the tax system. There’s more on this in our recent Economic Outlook report.
Helping the NEET generation is an economic, social and societal challenge, but it is a soluble one.
Contact Dr David Armstrong
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