School leavers and graduates are unjustly bearing the brunt of their elders’ incompetence
The Observer, Sunday 5 April 2009
The recession has been an equal opportunities destroyer. It began with a culling of City financiers and moved out to take the livelihoods of builders, shop assistants and assembly line workers. Only the public sector seems safe, but it will surely be shredded when Britain has to meet its debts.
The crisis is showing as little respect for education as occupation. One-third of the unemployed have A-levels or degrees and must be wondering what happened to their teachers’ promises that hard work brought its own rewards. Nor does the old north-south divide offer protection. If anything, unemployment is rising faster in Swindon, Exeter and Reading than Leeds, Liverpool and Manchester.
The majority of people will work through this recession as they worked through all others. Because they cannot know in advance that they will be safe, however, fear of unemployment is growing into a universal emotion.
I would blow the dust off cliches about us all being in this together were the young not suffering excessively. They are always the first victims of a recession because employers respond to a collapse in demand by taking the humane decision to freeze recruitment rather than make their existing workers redundant. This time around, though, the young stand out because they have had the bad luck to be the children of the mini baby boom of the late Eighties. The Great Crash of 2008, as I think we can safely call it, has coincided with a rush of new workers into a vanishing jobs market.
From 1980 to 2000, the absolute and relative size of the 16-24 age group declined. Since 2000, it has grown from 6.4 million (10.8% of the population) in 2000 to 7.4 million (12.1%) in 2007.
To get an instinctive feeling for their predicament, imagine how different British culture and society would have been if the first children of the postwar baby boom had reached maturity in the mid-60s to find collapsing banks and mass unemployment. We would have heard considerably less over the decades about growing up with rock’n’roll and much more about growing up on the dole.
David Blanchflower, of the Bank of England’s Monetary Policy Committee, wants an emergency programme to keep the young learning. He says the government should raise the school leaving age to 18 at once, invest in subsidies for apprenticeships and for university places and pay for a large increase in the number of teachers and work placements.
Blanchflower is about the only economist to emerge from the crash with his reputation enhanced. While his colleagues fretted about the illusory peril of inflation, he warned that Britain faced a second depression unless it tore up the rule book and recognised that a national emergency was underway.
I suspect even his high reputation will not be enough to carry his proposals through. Against him is the cost, which will be enormous. Blanchflower says we cannot afford not to pay and need to worry about the price of unemployment and rising crime. But even if politicians are prepared to throw money at job creation, they may think they would do better to direct resources to workers in their forties and fifties who lose their job and cannot find another. It seems natural to argue that the young will pull through because they have many years ahead of them to sort out their lives.
History is not always written by the victors, but it is inevitably written by the literate. When this crash is remembered in novels and biographies, the future middle class will share the notion that they were strong enough to cope by telling a story of a disaster that came without warning – an economic version of an unforeseen war – which they struggled against and overcame.
Yet many of the young unemployed are not graduates, but 16-year-olds with minimal education who could do with a lot more of it. I can think of many reasons to resist the notion that the pre-2008 world was a time of hedonism and plenty. Chief among them is the dismal statistic that youth unemployment rose steadily in the boom years.
In any case, the educated young are not as tough or as privileged as outsiders assume. Blanchflower’s colleague Andrew Oswald of Warwick University demolished Milton Friedman’s view that the unemployed rationally prefer the leisure of living on low benefits to the exertions of working for more money by studying the vast amounts of data governments produce on social attitudes. Unemployment, Oswald showed, brought a level of stress, ill health, marriage breakdown and misery out of all proportion to the loss of income. If you have ever had your confidence fall apart during a spell on the dole, you will not need him to tell you that, but many free-market Conservatives still do.
The trumpeting of the discovery of the hitherto unknown mental illness of “affluenza” by Oliver James, Anglican bishops and other traditional conservatives comes from a different philosophical tradition, but is offensive for the same reason. It ignores the commonsensical observation that it is not wealth that makes people crack up, but poverty, specifically the monotony and isolation of unemployment.
The educated young hurt the most. As Blanchflower says, a 40-year-old who spends a year out of work and then finds a new job shows no long-term ill-effects at 50. A 20-year-old is scarred for life. No one knows why. For a graduate leaving university with a good degree, the lost hopes of an attractive job and independent life may explain it. Perhaps bright students, used to praise, cannot handle rejection well.
Whatever the reasons, the evidence from Britain and around the world is consistent: whether governments want to increase the sum of human happiness or future prosperity, they do best when they invest in the next generation. I do not mean it flippantly when I say that they have more years ahead of them to be miserable in than the rest of us, so it is best not to start them off too early