From zero hours to apprenticeships: young people at work

Sunday 3 November, 17:3018:45, Auditorium 2Battle for the Economy

Partners:

The UK has some of the lowest youth unemployment rates in the EU. But, as critics point out, this statistic hides a multitude of issues. Starting salaries for graduates are amongst the lowest in the EU. Many young people end up in low-paid, ‘gig economy’ or zero-hour jobs with few career prospects. Young people from disadvantaged backgrounds are dramatically more likely to be unemployed – even if they get the same grades as their better-off peers. While this picture of low unemployment, but arguably poor-quality jobs, mirrors the general employment landscape for the UK, things are perhaps most pronounced for young people.

For many years, the response has been the same: attempt to include more ‘transferable’ or employment-related skills in education on the one hand and encourage young people and employers to take up apprenticeships on the other. The most recent major change was the introduction of the apprenticeship levy in 2017, where large businesses must set aside 0.5 per cent of their payroll budget for training. However, in the following financial year, the number of apprenticeship starters fell by 25 per cent. Employers have complained that the levy is too complex and inflexible. But rather than griping, what alternative methods might be deployed to finance the schemes? While employers appear to ‘prefer’ graduates, can apprenticeships be a means of attracting and training younger adults to fill the skills gaps in their industries?

And what of young people themselves? There are declining numbers of apprenticeships, worries about quality and complaints of poor pay – so much so that even the debt of degree study appears more attractive to many young people as a route to a ‘good’ job, while the gig economy – with all its insecurity – offers more immediate rewards in terms of pay.

Arguably, the deeper problem is a confusion about what the role of apprenticeships should be. Whereas most people are familiar with traditional apprenticeships in manual trades, there are now apprenticeships for everyone from hairdressers to nuclear technicians. What’s more, two-thirds of apprenticeships are taken up by over-25s. For some critics, the expansion of apprenticeships has been less about providing a route into good work for practically-oriented young people, and more about providing employers with a crop of young workers who can be paid dramatically less than their peers: the minimum wage for apprenticeships begins at £3.70 per hour.

More broadly, structural trends in the economy seem to be hitting young people hardest. With the introduction of new technologies such as AI and robotics, most commentators suggest the economy will increasingly divide between a small number of very well-paid, high-skill jobs and a much larger group of low-skill jobs with low-pay and little prospect for advancement. As young people enter the world of work, it is this divide they are facing most keenly. If you include the well-reported difficulties for young people in getting on the housing ladder and being able to save for retirement, the picture looks even gloomier.

However, other commentators suggest that these problems are overblown. Is there a danger that this discussion portrays the young as hapless victims, or do they face a uniquely difficult employment situation? What, therefore, is the truth about the world of work for new generations of young people? Are employers and the government doing enough to train employees for the jobs of the future? What is the right role for apprenticeships today? Or, perhaps, are the problems faced by young people really the problems of our low-growth, low-investment and low-innovation economy?