Theresa May’s speech at last month’s Conservative Party conference elaborated her plans to ‘transform Britain into a Great Meritocracy’. ‘A country that works for everyone’, she explained, must be ‘built on the values of fairness and opportunity, where everyone plays by the same rules and where every single person – regardless of their background, or that of their parents – is given the chance to be all they want to be’.
One of the Prime Minister’s examples stressed the unfair division between ‘a more prosperous older generation and a struggling younger generation’. With impeccable foresight, a few days earlier the Institute for Fiscal Studies (IFS) had published a major study which showed that, for the first time in more than half a century, young people born in the early 1980s are much less well off than their counterparts born 10 years earlier were at the same age. Judged by their housing, financial and private pension wealth, they are now half as wealthy. These findings may well be the first hard evidence of a longer-term trend of growing inequality of wealth between generations. The Prime Minister also alluded to inequalities within generations that are driven by the highly differentiated wealth of young people’s parents, but also by their social backgrounds – which would certainly include differences between classes, ‘races’, localities and genders. How these differences get translated into longer-term inequalities between generations is complex. Inherited wealth, locally highly disparate housing costs and young people’s income prospects are key factors. They shape every young person’s ability to avoid runaway debt, live independently and accumulate an adequate pension. Getting a reasonable job soon after finishing education and training is a key part of the equation: there are robust indicators that one of the factors most damaging to young people’s income prospects is an early or prolonged period of unemployment – the so-called ‘scarring effects’ of which have been shown to last a lifetime for many young people.
In what follows, I focus on an important new scenario through which ‘scarring’ comes about. Beginning from the effects of the 2007/8 Global Financial Crash (GFC) I trace some changes in patterns of unemployment, in government policy and in the laws that require school and college attendance. These changes point to the high risks of declining financial security for 16-17 year-olds – especially those who are trapped in the dilemma between more time in school and leaving to start a (very) low-paid job.
The end of the post-crisis recovery from high youth unemployment?
At the peak of the major recessions in the 1980s and 1990s there were more than a million unemployed 16-24 year-olds in the UK – enough to become a widely-shared public concern and a key factor in the 1997 General Election, when New Labour pledged to slash youth unemployment with its ‘New Deal for Young People’ job creation programme. Fast-forward a decade to the GFC, and the recessions that followed brought unemployment levels amongst 16-24 year-olds to a new high exceeding 1.1 million (1). Fast-forward another decade, and data published last month suggests that the slow recovery in youth employment following the GFC may be faltering. Office of National Statistics (ONS) data shows that the underlying trend in the overall unemployment rate has been one of fairly steady decline for several years, but that amongst 16-17 year-olds it ‘bottomed out’ at 24% last summer and has been rising steadily, reaching 29% this spring and summer. And if we home in on those 16-17 year-olds who are not in education, employment or training (NEETs – a much smaller proportion of that age-group) unemployment rates are higher and the underlying trend is worse. About 30% of NEET 16-17 year-olds have been unemployed over the last two years, and last month’s figures show a two-year high of 35% which can be expected to rise further as the bulge of this summer’s school leavers looking for jobs become included in the data.
The prospect of two out of every five 16-17 year-old NEETs (about 40,000 of them) being unemployed is troubling. More troubling but also puzzling is that if the law was being adhered to, no-one aged 16-17 should be unemployed or NEET. In 2008 Labour’s Education and Skills Act required every 16 and 17 year-old to be in full-time education or training or in full-time or part-time work that includes release for regular training. The 2008 Act coincided with OECD data which showed that the UK had one of the highest NEET rates amongst the world’s richest countries, not far behind Mexico and Turkey. And youth unemployment rates had just begun to rise alarmingly towards their new 1.1 million peak as the effects of the GFC set in. As a result, most of the Education and Skills Act 2008 was enthusiastically supported by all political parties in Parliamentary debates.
A law to ignore, for some…
So why are there now 40,000 16-17 year-olds whom the ONS counts as unemployed? The 2008 Act included vigorous mechanisms requiring Local Authorities and employers to monitor and enforce compliance. The one part of the Act that triggered objections in Parliament concerned sanctions that would apply to 16 and 17 year-olds who refused its requirements, especially those which would place them in detention centres for persistently refusing to comply. The government rejected these concerns and forced the legislation through. Three years later, the Conservative-Liberal Democrat Coalition government suspended the clauses which required Local Authorities and employers to monitor attendance and punish refusal. Participation remains compulsory, but it has not been enforced.
In fact, the latest data from the Department for Education shows that the biggest increases since the GFC in school and college attendance amongst 16 and 17-year-olds occurred several years before the 2008 Act was implemented – which was not until 2013.
Between 2005 and 2010 the proportion of 16 year-olds in full-time education (FTE) rose by eight percentage points. This coincided with a very sharp rise in youth unemployment which began in 2008 and continued until 2012. Similarly, the proportion of 17 year-olds in FTE rose by 10 percentage points. By comparison with these changes, the increase in the FTE participation rate for 16 and 17-year-olds in 2013 (when the 2008 Act came into force) was very small – less than two percentage points. Recessions like those that followed the GFC, it seems, are very much more effective than unenforced laws for enticing young people back into the classroom.
So why was the Coalition government so keen to abandon monitoring and enforcement? One reason concerns costs. Huge reductions in Local Authority budgets and staffing resulting from the Coalition’s ‘austerity’ cuts made this extra work unaffordable. From 2010 onwards these cuts also closed branches of the Connexions Service which was dedicated to supporting and monitoring young people’s post-school trajectories. As a result, Department for Education figures for 2015 show that in almost every English region, the numbers of 17 year-olds who were known to be NEET were exceeded by the numbers of ‘not knowns’, who had ‘disappeared’ from Local Authority records. In some localities, the ‘NEET or not’ statuses of more than one in five were unknown. In the same year the House of Commons Public Accounts Committee estimated that the statuses of more than 100,000 16-18 year-olds were unknown.
Privileging freedom of choice over future financial security
The abandonment of the monitoring and enforcement powers of the 2008 Act and the loss of reliable data about youth unemployment are, it seems, about much more than austerity and shrinking budgets. Conservative and Liberal-Democrat MPs raised some remarkably high-minded objections to the 2008 Act in the Parliamentary debate. They argued that 16 and 17-year-olds who are legally deemed mature enough to bring up children and serve in the armed forces should also enjoy freedom of choice not to participate in any form of education or training (or work) and should not be monitored or punished.
Rather less principled were the attitudes of many MPs to the state’s responsibilities to make provision for low-achieving, poorly motivated or disadvantaged young people, or even to keep track of their post-school careers. Indeed the whole question of what counts as dependent childhood, what warrants the protections afforded to young people, and at what age young people are to be treated as independent adults has been in flux for some considerable time. For most purposes, 16-17 year-olds are now regarded in law as dependent children, for whom the state only has responsibilities to make welfare provision in exceptional circumstances. Full adult entitlement to state benefits for unemployment and housing, for example, is delayed until the age of 25. Overall, then, there is now considerable ambiguity about the status, needs and rights of ‘young’ people, however they are defined.
Seen in this light, prioritising 16 and 17-year-olds’ freedom of choice, as the Coalition did, in effect releases the state from some long-established commitments to their welfare. This is troubling, especially when so much else has changed – to young people’s significant disadvantage. ‘The market’ increasingly determines their chances of getting a job, earning a genuine living wage and being able to afford somewhere to live. Data from the Low Pay Commission and the Department for Business, Innovation and Skills found that the real earnings of 16-17 year-olds fell by 17% between 2009 and 2013. The real value of their median hourly pay fell by more than £1 to £5.03. Within these averages many were earning much less, and only the best paid would have had any realistic chance of living independently.
All in all, the youngest adults’ freedom of choice means that many of those who have gained least by way of skills and qualifications, from eleven years of compulsory schooling, face stark choices between poverty-level wages and extending an unproductive school career. At this point, ‘disappearing from view’ is the most rational and appealing option for many 16-17 year olds – one that is lent a degree of legitimacy by the government’s apparent indifference to the faltering career trajectories of tens of thousands of them.
No path to a Great Meritocracy
This version of freedom of choice is self-evidently one with tangible consequences for future financial security – consequences that are uncertain and (as the IFS findings show) potentially impoverishing. As Mrs. May’s speech implied, fundamentally conflicting values underlie these issues. Prioritising young people’s supposed freedom of choice is part of a broader value-position that prioritises individuals’ responsibilities to be self-sufficient and to advance their own prosperity and interests without restriction. A second value-position prioritises a social and political commitment to equalise opportunities to enable people to be, as the Prime Minister’s said, ‘all they want to be’. A third entails a similar commitment to minimising (and in some versions eliminating) inequalities of class, ‘race’, locality and gender.
Mrs. May has signalled that her version of conservatism departs from the first positon in favour of the ‘Great Meritocracy’ of the second. The third position is clearly out of scope for the Conservative Party. But if her government is serious about tackling even the most elementary sources of the unfairness of intergenerational and intra-generational inequality, it must break the quiet conspiracy of silence which her predecessors allowed to evolve between young people who believe their best option is to ‘disappear’ themselves, government departments that are content to accept their invisibility in official data, and Local Authorities that are forced to ignore it for lack of funding. These ‘missing’ school leavers are amongst the most vulnerable of the next generation of adults who will be poorer – perhaps much poorer – than their older peers and their parents. For many of them, their trajectory of rapid downward social and economic mobility will prove to have been set on the day they left school. That is no path to any kind of meritocracy – least of all a great one.
(1) A number of the themes of this article, including connections between youth unemployment, labour markets and welfare provision, as well as their links to youth crime and criminalisation, are discussed in my book: Fergusson, R. (2016) Young people, welfare and crime: governing non-participation, Bristol, Policy Press.
Ross Fergusson is Senior Lecturer in Social Policy at The Open University. He is author of Young people, welfare and crime: governing non-participation, published by The Policy Press, and a member of the Editorial Board of the Journal of Social Policy. He has published articles on young people in leading journals across the disciplines of social policy, criminology, politics and education.