The ‘Jobs Guarantee’, Young People and Work in the Age of Covid.
Part One: Short term policies
If Labour wants to develop policies that benefit working people, some hard thinking needs to be done with a close eye on reality and on the detail. Training, employment and jobs is one of the areas in which Labour could really make a difference. One particular issue which directly or indirectly affects most families concerns what happens to young people when they leave school and do not wish to go to university or when their educational achievements are modest. There are no easy answers to a complex problem which has been years in the making. This article will look at what needs to be done now. Later articles will look at the medium and long term.
Many people on the Left regard ‘being educated’ as meaning ‘having a university degree’ and have little interest in what happens if you don’t go to university. The fact that policy and practice in this area is complex and confusing also means that politicians steer clear of it. Just to make matters even worse, there is little ‘policy memory’ as politicians and officials come and go and rarely stay long enough to master this complex brief.
Such a bleak portfolio tends to put off ambitious politicians. This means that it needs to become a leadership issue, tightly bound with the highest of political priorities such as that of capturing the imagination of a disillusioned working class. First Labour needs to get a measure of the problem and understand what unintended consequences and tough trade-offs actually mean in practice. We have yet to see this, despite the Covid crisis making a serious problem an acute one.
Fortunately, as this journal has been arguing, complex as these problems are, finding the money to tackle them is not an issue. The problems lie more in mobilising resources, using them wisely and anticipating likely problems of implementation. In what follows, I’ll set out what the main problems are and suggest some ways forward. The first point is that the Covid episode has been a catastrophe for young people, particularly those not going to university. The collapse in jobs and apprenticeships has had a very bad effect on the youth labour market. For many young people their first experience of work is part time, very often in the retail, leisure or catering sectors. Much of this work is now drying up. More generally, full time work in these sectors is also drying up. Because of the uncertainty about the future, firms are much less willing to take on apprentices in sectors likely to be adversely affected by the pandemic and many firms are shedding them before they have a chance to qualify. Work experience in the broader sense will also be restricted by current conditions. Graduates also find it difficult to gain employment and many of these, around 30% according to some estimates, are doing work for which a degree is not necessary. Many more graduates are now fishing in an employment pool which used to be the preserve of non-graduates, leading to a downward push in the labour market in which even modest low-pay positions require formal credentials which do not match the needs of the job. At the bottom of the youth labour market are those with learning difficulties and no qualifications who will effectively be excluded altogether. One estimate put youth unemployment at 27% by the end of the year.
So there is a massive short term problem of youth unemployment and lack of apprenticeship opportunities that needs to be dealt with immediately. Further Education Colleges will be taking some of the strain and the government has recently announced a substantial funding increase that will just about match the cuts that the sector has sustained over the last ten years. However, to do their job the FE Colleges will need to hire and train staff and install equipment and buildings. That will take time. If, for example, the government wanted to institute a massive scheme for retrofitting old buildings to make them more energy efficient, as suggested in ‘Labour Green Recovery’ the time taken to train teaching staff and then to train builders would take at least three years, clearly far too long to make a difference to those without any employment now. Neither should we forget that the pandemic makes attendance at college difficult.
In 1978, as youth unemployment in Britain began to bite, the Callaghan government introduced the Youth Opportunities Programme, YOP, which provided work experience and attendance at college. Initially quite successful, the YOP quickly became inadequate because it was unable to deal with the fact that in many parts of the country there were simply not enough jobs to go round. It was not a job creation, but a work experience scheme. If you do not create jobs then you are tinkering with the problem. We need a job creation scheme now so that young people can gain genuine experience of employment.
There is only one agency that can do this: the State. It can do so directly or work through agencies such as local authorities and businesses thus capitalising on their local knowledge of what needs to be done and of the needs of local communities. It can also, as some commentators have suggested, turn the debt of companies which have received government loans into equity giving the government a measure of direct control over companies and thus enabling those companies to provide training, apprenticeships and jobs.
But the immediate need is to create unskilled and semi-skilled jobs providing young people with money, self-respect, an experience of work and a record of employment, all priceless assets at the beginning of adult life. This ought to be done over the next few months and Labour should be raising this now as an urgent priority for the government. These could be jobs in environmental protection and enhancement, care work and supporting vulnerable people whose mobility is restricted, as well as urgent repairs, for example to roads. Some young people are more mature and adaptable than others, and will flourish when such opportunities are given to them. Others will need encouragement and guidance and help in developing habits of punctuality, compliance and co-operation in a working environment. There are plenty of unemployed adults who would be only too willing to take on a mentoring role for young people, enabling them to develop the attitudes necessary for a working life. Part of this offer should also be one day a week college attendance to learn about working life and to enhance literacy and numeracy skills where this is necessary. This work should be closely related to their employment. It will also be necessary for a minority of young people to attend some kind of induction to working life for a few months to ensure that they can benefit from a job. Such a programme too will need experienced adults to run it.
The government has launched a £2 billion ‘Kickstart’ scheme to subsidise jobs in businesses for 16-24 year olds on Universal Credit. This will last until the end of 2021. It provides for 25 hours per week on the minimum wage for up to 6 months. There are a number of problems with it. The funding is insufficient to address the scale of the problem, aiming to create 350,000 jobs if it is fully successful; it only subsidises part time work and has a narrow time limit. To date, it has created 20,000 jobs and as thing stand only 120,000 young people will qualify. The fall in employment for 16-24 year olds is 300,000, nearly matching the Kickstart maximum. In addition it is difficult for smaller businesses to get involved as each firm must take on a minimum of 30 young people. It is not at all clear what guarantees there are that the work undertaken will be meaningful, that there will be adequate mentoring and that there is a link with further educational and training activities that will enable young people to prepare for more skilled work. Labour needs to propose something much more ambitious, not just a rerun of its own Future Jobs Fund, which was introduced in 2009 and scrapped by the incoming Cameron government in 2010. Both Kickstart and the Future Jobs Fund, poorly funded and limited in time and scope do not remotely address the scale of the problem facing young people.
A conservative estimate of the need, given by the Alliance for Full Employment, is that 1.5 million jobs are needed to absorb unemployment among 16-24 year olds. A less conservative estimate, starting from the population total for this age group and subtracting those known to be employed could put the figure as high as 2 million. Whichever it is, Kickstart, even were it to reach its target, would only reach a third of those in need. But Kickstart, like its ancestor the Youth Opportunities Programme and its various successors, is a work experience programme, not a job creation programme. It is thus a palliative measure. There is little point in preparing young people for work, helping them to buff up their CVs and conducting job searches if there are no jobs to be had. Young people need jobs and they need them now. The government is not currently doing anything to address this.
Providing unskilled and semi-skilled work on a mass scale is not a panacea for youth unemployment, let alone a satisfactory way of preparing young people for a working life in a good job. But it will, in the short term mitigate the well-documented damage caused by unemployment in young adulthood. It is an essential stop-gap before longer term measures can be put in place to provide good jobs in secure occupations in all parts of the country, such as retrofitting older buildings and developing green manufacturing. But such measures will take a few years at least to come to fruition, for the reasons mentioned above.
While this is happening, there are other measures that can be taken to improve the lot of young people. These include restoring the Education Maintenance Allowance, free transport for young people, particularly where transport links are poor, for example in rural areas, enhancing rural public transport which has also been run down over the past ten years, planning the restoration of careers advice, information and guidance largely demolished by Michael Gove in 2011 and restoring funding for youth work, also run down over the last ten years. These are all issues that the Labour Shadow Education Secretary, Kate Green and the Shadow Business Secretary, Ed Miliband, could be starting work on right away. They will need to present proposals to the public that are both detailed and realistic and in such a way as to dispel misgivings about large-scale spending of government money by presenting it as an investment. The long-term costs, let alone human misery, caused by mass and prolonged youth unemployment should be emphasised along with the fact that policies are constrained by the availability of resources and a skilled workforce, not of money. This is why measures need to be phased so that what is needed for the longer term projects has time to develop.
For all their virtues, close engagement with policy proposals that would be of immediate benefit to working people was not something which one could accuse Angela Rayner (ex education shadow) and Rebecca Long-Bailey (ex business shadow) of. They were big on large declarations, but when it came to the detail of policy they were lacking. This journal wrote a series of open letters to Rayner and Long-Bailey on education last year, encouraging them to engage with the detail. No response was received and no evidence ever emerged that these ideas had aroused the slightest interest from these two shadow cabinet ministers. One of Jeremy Corbyn’s failures as leader was his inability or unwillingness to encourage his team to develop policies that appealed to working people. One can only hope that the new team shows greater interest. At the time of writing there is no evidence that this is the case. There have been complaints from Labour about the scale and ambition of Kickstart but as this article has demonstrated this is not enough. Something of a totally different order of ambition is required. Keir Starmer shows no sign of interest in an issue of profound concern to working class communities and more generally to all those who depend on paid work for their income.
Next month I will look at jobs and training for young people in a longer term perspective.
 Financial Times, 20.11.20.
 Youth Report: A Million Reasons to Act, 2020, Alliance for Full Employment, p.2.