Young Scots ‘face low pay and few prospects’

A GENERATION of educated young Scots is being condemned to a life of low-paid, unstable jobs that will damage both their prospects and that of the country, a leading think tank has claimed.

Think tank accuses Holyrood of ineffective response to problem. Picture: Phil Wilkinson
Think tank accuses Holyrood of ineffective response to problem. Picture: Phil Wilkinson

A report for the Scotland Institute – The Changing Face Of Youth Unemployment In Scotland 1992 To 2012 – found that while young people from disadvantaged backgrounds continue to suffer most from unemployment, the most significant change in work opportunities was for 16 to 24-year-olds who do have jobs.

Over the past two decades, youth employment has gone from being characterised as consisting of stable, relatively well-paid work with career prospects to short-term, part-time, poorly paid work with limited long-term prospects, the report says.

Although Westminster governments have contributed to the problem, the Scottish Government must do more to address the impact, as its current response is “ineffective”, it adds.

This has led to the average amount of hours worked per week by young Scots decreasing from 35 in 1992 to 29 now.

Report author Dr Roger Cook, the research director at the institute, said: “Twenty years of sustained removal of employment protection and the casualisation of work has created a situation where young people are becoming trapped in low-paid work with limited longer-term opportunities.

“Youth employment in 1992 was characterised by full-time, stable and relatively well-paid work, and in 2012 was marked by temporary and part-time work. This is the conscious outcome of an approach to the labour market over 20 years that has stressed flexibility and ignored the impact of this on people’s working lives or standard of living.”

The broad trend shows youth unemployment standing at 16 per cent in 1992 but at 20 per cent now, said Cook. But what is less well appreciated is how this fluctuating rate is affecting different groups.

“Those who are relatively well educated are finding jobs but those jobs are less likely to offer a career, progression, security or a decent wage than was the case even in the depths of recession under the 1992-1997 government. Stagnation of wages and loss of security has wider implications than just inflicting hardship on individuals.”

This has “real consequences” for all of society, he added.

“Not least, the consequence of low wages and job insecurity is that effective demand in the wider economy remains suppressed.”

While acknowledging that Scottish ministers are restricted to some extent by the retention of key powers by the UK Department for Work and Pensions, Cook urged MSPs to lead by example and ensure young people employed in the public sector, and by its contractors, are given guaranteed working hour contracts and paid a living wage.

He also called for a change in focus from education and training towards ensuring better working conditions for young people, suggesting that they are not lacking in skills as much as good job opportunities.

“The growth in low-wage, casual employment among the young threatens to damage the economic prospects of a generation as badly as does the continuation of youth unemployment at rates of 20 per cent,” he said.

“Many of these issues are reserved at Westminster, which makes producing an effective Scottish response difficult. Nevertheless, the Scottish Government does have leverage in key areas.”

These include ensuring that the public sector does not encourage short-term contracts and uses its role as a major purchaser to influence working practices in the private sector.

Former Labour MSP John Park, who is now policy director for the Community trade union, said: “This timely report from the Scotland Institute highlights some particularly disturbing realities – not just in terms of finding work but also the quality of work that is available for those lucky enough to have a job.

“The tragedy for this generation of young people is that if we do not address the scourge of youth unemployment it will not only hurt many young people directly now but it will also have an ongoing negative effect throughout their lives.”

Colin Borland, of the Federation of Small Businesses Scotland, said the impact of the current economic climate could not be avoided. “Everyone has had to take a hit in terms of wage cuts, fewer hours, more unpaid overtime and redundancies,” he said.

Small businesses were having to work hard to retain the staff they have, which would have a knock-on effect in terms of fewer opportunities for jobseekers.

A Scottish Government spokeswoman defended its approach. “Figures show that youth employment in Scotland moved in the right direction over the last six months,” she said. “However, there will be no let-up from the Scottish Government, with the offer of a place in training or education for all 16 to 19-year-olds.

“We are delivering at least 25,000 Modern Apprentice starts every year and investing in training for young people through the Employability Fund.”

Twitter: @EddieBarnes23

Case study: A first-class degree, 100 applications and no job

JAMES McGeachie, 26, from Denny, graduated from Heriot-Watt University a year ago with a first-class degree in accountancy. Since then he has applied for almost 100 jobs in finance, which led to four interviews, none of which led to a job offer.

In desperation he took a commission-only sales job for a short period, but found many of the practices questionable and he decided not to continue. He is currently working as a volunteer at a charity for young people with disabilities.

“I imagined I would get a training job with one of the big accountancy firms after I graduated,” he said.

“But because I’d left school in fifth year without sufficient Highers I went to college to do an HND and proceeded to university from there. The big firms take your Highers into account. I didn’t realise that even with a degree your school qualifications can affect your chances of a job, because there are so many people applying for relatively few positions.

“I tried smaller companies, but many of them wanted me to have had some kind of training first at one of the big companies. I then started looking for lower-level positions still within finance, and I got an interview, but the employer told me I was overqualified. So it has been a vicious circle, really.

“After deciding to try that sales job and what happened, it really made me think about what to do about the situation, and that’s how I ended up volunteering.

“I have an interview next week for a paid administrative role with a company and so I’m hoping that will work out. It would be easy to lose heart, but you just can’t. You’ve just got to keep trying.”

Analysis by Azeem Ibrahim: Changed times need new solutions

Dr Roger Cook’s study ‘The Changing Face of Youth Unemployment and Employment in Scotland 1992-2012’ proves that in the search for solutions for Scotland’s unemployed youth, “more of the same” is not working. Solutions designed for a different labour market are not adequate for the new labour market of today which disproportionately offers low paid, short term, part time jobs with limited or poor prospects.

The disturbing reality presented in the Scotland Institute’s report is that the Scottish Government should be doing more to prevent the UK government’s economic policies from derailing efforts in Scotland.

Scotland is doing marginally better than the UK and needs to keep doing what is working well. Community Jobs Scotland for example has produced more than 1650 jobs for 16-24 year-olds throughout the country but the need for more is almost overwhelming.

There are around 100,000 16-24 year olds unemployed in Scotland today. Over 20,000 are termed “disconnected youth” or NEET, “not in education, employment or training”. These young people need are in danger of remaining trapped in poverty as casualties not only of the recession but of a society prepared to see them caught in a vicious cycle and becoming the third generation of unemployed.

Scottish women and young people have been disproportionately affected by the recession and desperately need access to training and college places to create and update their skills to help them into work. Unfortunately it is not just that jobs are scarce but that the right sort of jobs are hard to find. Even young people with a good educational level are having to accept, low paid or part time jobs as they wait for demand to rise for workers. Unfortunately most economic indicators suggest that the recovery will be painfully slow.

This report highlights the fact that no matter what stage of the economic cycle, there has always been a significant percentage of youth who are unemployed or unemployable because of where they live in deprived areas, because of disability or ethnicity as well as low educational attainment.

It has been proved that an education-led solution is not the answer. We need to build and deliver a national strategy regardless of the economic cycle, to create jobs and opportunities for these marginalized young people.

The changing nature of employment means that nearly one-fifth of Scotland’s young people are unemployed or underemployed and are looking for their opportunity to be a meaningful part of the

Scottish economy. A focus on apprenticeships does not acknowledge the change in Scotland’s labour force requirements. Gone are the shipyards on the Clyde, the steelworks in Lanarkshire and the mining industry with their plentiful employment opportunities. Today’s labour market reflects the erosion of social democratic policies over the years, now favouring the highly educated with highly paid jobs and neglecting the potential of the rest.

Today’s unemployment problem does not mean that workers do not have the right skills, motivations or work ethic. It is simply that the jobs are not there yet. The future is mostly in science and technology and service industries, requiring specialized skills and therefore specialized investment in those industries to attract, train and retain young people.

Young workers need strong job growth as they enter the labour market in the aftermath of the Great Recession and it is more jobs they need rather than more education. Instead of having to accept low paid jobs with few prospects for the future, young people need the jobs to exist so that they can pursue the acquisition of skills and further education to match the jobs.

As the economy gradually picks up and reliance on the UK decreases, the Scottish Government not only has a unique window to address youth unemployment in the changing labour market but finally an opportunity to come to grips with the marginalized percentage of young people in danger of becoming permanently poor, disaffected and a burden on the economy. Not only is it poor economic planning to fail these young people, it is also a failure of Scotland’s long standing tradition of excellence in education and industrial innovation.

In light of this report, I have already commissioned The Scotland Institute to start an extensive project called Re-Skilling Scotland, which will look at innovative solutions to this difficult policy challenge. We intend to involve leading stakeholders in society including industrialists, business people, entrepreneurs, academics, vice-chancellors, economists, union leaders, politicians and policy experts. The result will be a comprehensive blue print which can be implemented wholesale as a national strategy rather piecemeal tidbits, putting good policy into practice and creating a uniquely Scottish example of best practice for others to emulate.

The Scotland Institute’s latest report on The Changing Face of Youth Unemployment and Employment in Scotland 1992-2012 is compelling reading for policymakers at all levels and for all those concerned for social justice for young people in Scotland today.

• Azeem Ibrahim is Executive chairman of the Scotland Institute