Youth unemployment in Essex could cost up to £2.5 million a week, The Prince’s Trust and RBS reveal today (2nd December).
The Cost of Exclusion highlights a steep rise in the number of long-term unemployed young people. In Essex, the number of 16-to-24-year-olds claiming Jobseeker’s Allowance (JSA) for 12 months or longer has hit a 12-year high as well as more than doubling since before the recession.
The new report, based on research conducted by the Centre for Economic Performance at the London School of Economics, warns that the price of youth disadvantage is at a new high. Even a conservative estimate – based on lost productivity being equivalent to JSA – suggests that youth unemployment costs per week for Essex would be more than £800,000.
Based on the lost productivity of unemployed young people being equivalent to the average weekly wage for their age group today, the cost of youth unemployment in Essex is £2.5 million a week.
Graham Ball, regional director of The Prince’s Trust in the East of England says: “The annual cost for an individual jobseeker in Essex can be as much as £16,000. The argument for intervention and support is unquestionable. For a fraction of this cost, The Prince’s Trust can support a jobless young person through an intensive personal development course, helping them leave the dole queue for good.”
The report shows how the significant rise in youth unemployment since before the recession has left the UK with a much higher youth unemployment rate than many of its European neighbours, such as Germany, Denmark, Austria, Norway and The Netherlands.
Fionnuala Earley, RBS Economist says: “As the UK struggles to clear record levels of national debt, we cannot afford to ignore the growing costs of youth disadvantage. This is not just a welfare burden – lost productivity and wasted potential directly affect the rate of economic growth in the UK.
“It’s crucial for the economy that young people have the skills and confidence they need to find work and view entrepreneurship as a realistic option. This is why RBS is a long-standing supporter of The Prince’s Trust.”
According to the research, young people with few qualifications have been hit particularly hard by the recent recession. More than a quarter of young men with few qualifications are now unemployed – a much higher proportion than in previous recessions.
The Prince’s Trust & RBS Cost of Exclusion report goes on to show how educational underachievement in the UK costs £22 billion for a generation. This represents the impact of education on wages and employment chances and the ‘wage scar’ over a lifetime. In the East of England, one in ten 16-to-24-year-olds leave school without qualifications.
Graham Ball adds: “Youth disadvantage in the UK is a financial burden on us all, but at The Prince’s Trust we also see the devastating effects on individuals and communities across the region.
“Every day at The Trust we meet another young person who is trapped in a downward spiral of joblessness and poverty. Only with the right support can these young people break this cycle and get their lives back on track.”
The Prince’s Trust helped nearly 3,400 young people in the East of England last year, giving them the skills and confidence to find a job.
More than three in four young people supported by The Prince’s Trust move into work, education or training. The Trust works with 14-to-30-year-olds who have struggled at school, have been in care, are long-term unemployed or have been in trouble with the law.