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Who are the NEETs and why?

The NEET concept and definition is discussed here: https://en.wikipedia.org/wiki/NEET “Knowledge of the word spread after it was used in a 1999 report by the Social Exclusion Unit (SEU”, so the term was less well known when the stretching of the UK’s national income distribution apparently became permanent around 1992.

 

Andy Furlong has written on Scottish NEETs, as a meaningless classification. http://wes.sagepub.com/content/20/3/553.short

“Not a very NEET Solution: representing problematic labour market transitions among early school-leavers”

The abstract says “…it is an ill-considered concept that places an undue and often misleading emphasis on voluntarism.”

 

He also wrote this paper (which I was able to read in full for free):

http://www.jil.go.jp/english/reports/documents/jilpt-reports/JILPTRNo5_furlong.pdf

Furlong, A. (2007) “Supporting the Transitions of Vulnerable Youth: UK Perspectives”, in The Japan Institute for Labor Policy Training Report No. 5.

 

“First, modern youth transitions take much longer to accomplish …” “… today many young people fail to get established in the labour market by their mid-20s …”

 

Guilty as charged, M’Lud!

 

“Second … transitions have become much more complex.” “… people move between education, training, unemployment and jobs. In this context the term ‘yo-yo’ has been used to describe modern youth transitions (EGRIS 2001).”

 

Been there, done that, got the T-shirt.

 

“Third, this complexity and unpredictability leads to a situation where young people can feel that they are constantly confronted by risk.” This perception may be incorrect, but can still cause anxiety.

 

“Fourth” the complexity and uniqueness of each young person’s transition from full-time compulsory education makes it hard to learn from others, and can lead to self-blame.

 

“Fifth ” despite all the changes in youth transitions and their apparent unpredictability, pre-existing “… patterns of inequality have been maintained.” So that would include any extra inequality created during the 1980’s. Inequality indirectly influences the outcome of the prolonged “yo-yo” transition from compulsory education, it’s not at the forefront of the minds of NEETs. The practical things that are salient to them are explained in the following study.

 

All the participants in the following study were born after the inequality boom of the 1980’s, and would have grown up with it. The small 2014 study of NEETS aged 18-20 tends to confirm that the emphasis on most NEETs having a choice to stay at home is indeed “misleading”.

http://www.ioe.ac.uk/Research_Home/16-Report-students-NEET-RR.pdf

As in recent media coverage (BBC Radio 4 “Woman’s Hour”), the majority of the 7 NEET (and 13 recently ex-NEET) interviewees were female.

 

Barriers to entering EET included:

  • physical/mental illness,
  • looking after for someone else,
  • lack of flexible working conditions,
  • family breakdown,
  • pregnancy,
  • distance to work/college (in a rural area),
  • college fees,
  • lack of practical support,
  • lack of careers advice,
  • indecision as to which way to go, and
  • poor school attainment (due to special educational needs, discipline problems, health issues, or bullying).

 

Those who had recently entered education, employment or training had often done so through considerable personal effort and initiative. The complex and prolonged transition from full-time compulsory education was also emphasised here.

 

Only one of the group had a graduate parent. More typical was the one leaving Local Authority care.

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How bad is UK graduate unemployment and underemployment?

Graduate unemployment 3 years after graduating has been under 4% since 2006 (the class of 2003).

 

Graduate median salaries were £5,500 above the median for the working population in 2012-13.

 

Of those in employment, 80.5% were in professional jobs in November 2014.

 

In 2014 there were 5.1 graduates working full time for every one working part-time, a year after graduation.

 

So, there may be some underemployment in terms of occupations and working hours, but little unemployment.

 

 

http://www.bbc.co.uk/news/education-34053555

 

“More UK graduates are in work than at any time since the recession, new figures suggest.

 

Researchers asked almost 82,000 people who graduated in 2011 about their occupations in November 2014.”

 

ie these figures relate to the 3-years after graduation follow-up study.

 

“The last time that graduate unemployment was this low was in 2008, among graduates who left university in 2005, according to the figures.

 

Graduate prospects were worst in the 2010 survey when only 86.4% of were in work, three years after leaving university in 2007.

 

A total of 3.5% of this group were unemployed.”

 

Survey date Degree finished In Work (FT or PT), +/-Study Further Study (FT or PT), +/-Work Unemployed Other eg travel
2014 2011 87.9% 6% 2.6% 3.5%
2012 2009 87.1% 6.7% 3.2% 3.0%
2010 2007 86.4% 6.5% 3.5% 3.6%
2008 2005 89.7% 5.5% 2.6% 2.2%
2006 2003 89.3% 4.9% 2.3% 3.4%

* In Work includes those starting work that month.

Work/Study: Those doing both designated one of them as primary.

 

“In November 2014 the median salary of those graduates in full-time work in the UK was £26,000 and of those in employment, 80.5% were in professional jobs.

 

More than three-quarters (76%) of the graduates said their course had prepared them well for their career and two-thirds (66%) said it had been good value for money – but this group were at university before fees trebled to £9,000 a year in 2012.”

 

Some more details on the 1-year follow-up study here: https://www.hesa.ac.uk/sfr217

 

“In 2013/14, there were 424,375 UK and EU leavers (398,105 UK, 26,270 EU) whose destinations were known (427,870 in 2012/13).

 

Over two-thirds, 71% (303,300) of leavers (both full-time (70%, 244,045) and part-time (76%, 59,255)) were working, either in the UK or overseas, a slight increase from 70% of leavers in 2012/13.

 

A further:

6% were working and studying,

12% were involved in further study,

6% (full-time 6%, part-time)

3% were unemployed (the same as in 2012/13) and the remaining

5% were involved in some other activity, such as taking time out to travel or something else”

 

So there were 5.1 full-time workers to every part-time worker.

 

 

http://www.bbc.co.uk/news/education-34186954

 

“The annual survey of the Association of Graduate Recruiters (AGR) indicates a 13.2% increase on 2014 in vacancies being offered by graduate recruiters.”

 

“The median starting salary for graduates in 2014-2015 was £28,000 – up from £27,000 in 2013-14 and a continuation of the steady increase from £25,000 in 2010-2011, £26,000 in 2011-2012 and £26,500 in 2012-2013.”

 

 

https://en.wikipedia.org/wiki/Income_in_the_United_Kingdom#Taxable_income

 

“The most recent SPI report (2012/13) gave annual median income as £21,000 before tax and £18,700 after tax.”

 

Source: https://www.gov.uk/government/collections/personal-income-by-tax-year

 

Does inequality deter young people from entering education or employment?

Apologies to young people if this seems like a stupid question. The more obvious brakes on entry to education/employment now could include:

 

From 1998, student loans for tuition fees

A continuing mismatch between the qualifications available and the needs of the job market

A continuing lack of vocational education (and funding for it)

A lack of employers willing to train new recruits (particularly public sector ones post-recession)

Lack of well paid and secure employment, due to cyclical/structural changes in the jobs market (structural= technology/globalisation/immigration?)

Not enough older workers retiring, or being laid off in the latest recession (the IFS says this relationship is a myth – “Releasing Jobs for the Young? Early Retirement and Youth Unemployment in the United Kingdom, James Banks, Richard Blundell, Antoine Bozio and Carl Emmerson, IFS, July 2008)

Job mobility issues, particularly relating to house prices in the SE

 

Due to lack of time, I’m going to skip research on this question for now [but see my next blog posting about the evidence] and use my own personal experience of 4 years of youth worklessness during the worst period for UK youth unemployment – the 1980’s. I don’t think that NEETs were/are really aware of the increase in inequality during the late 1970’s to early 1990’s. Like the proverbial frog in the pan of water, the heating was gradual and (unlike the frog) you got used to it.

 

Changes to higher education funding, and the removal of government subsidy for youth employment in times of recession have made things worse since the 1980’s. Had I not benefitted from a year of subsidised work, and 5 years of free university tuition (partly under the Scottish system), I might never have had a decent career.

How serious, and how recent, is the problem of youth worklessness?

As mentioned in yesterday’s posts, globalisation and technological change led to an increased demand for technological skills across the OECD nations in the period 1977-1991, which in turn led to higher incomes for a tiny elite and a lesser reduction in incomes for the lowest skilled. With other changes (demographic, taxation, etc), this led to a rise in overall OECD household income inequality (as measured by Gini coefficients, which are not very revealing, but widely used).

 

Turning now to young people not in Employment, Education, nor training (the “NEETs”, or “workless”), this is a serious issue because early unemployment can lead to a lasting damage to personal income, and wellbeing, even over 35 years later (Blanchflower and Bell 2011).

 

The best statistics we have on unemployment by age (the ONS Labour Force Survey) only go back to 1992. That data shows an initial rate of 11.9% unemployed and not in education in 1993, dropping to 6% in May 2004 and rising again to 10% in 2011. Those figures exclude those not actively seeking work and also not in education, which in 2011 took the total up to almost 20% (see next link).

 

A TUC pamphlet on this topic (“Touchstone Extras #7. Generation Lost: Youth unemployment and the youth labour market”) uses various proxy measures to get a rough figure for earlier rates:

https://www.tuc.org.uk/economic-issues/touchstone-pamphlets

The raw number of young unemployed (by different measures) started in 1969 very low by current standards (0.03M?), went up sharply between 1975-77 (0.3M), before the recession that started in 1979–80 saw it rise to 1.25 million. It then fell at the end of the 1980s, but remained above all pre-1979 figures. The 1991–3 recession saw a further rise, but did not have as bad an effect on youth unemployment as the earlier recession.

 

Over the same period (1969-2011), ONS data tells me that the proportion of the population aged 16-24 has changed relatively little (12.3% to 12.0%, ranging from 14.0% in 1981 down to 10.6% in 2002). I shall thus ignore population change and stick to raw numbers.

 

Youth unemployment (and thus presumably youth worklessness) is not new, and is better than it was in the early 1980’s (when I graduated for the first time).

Where does increasing UK household income inequality come from?

I have already mentioned household break-up (due to divorce) and increasing income amongst the richest UK households during the period 1977-1991 (ONS report).

www.ons.gov.uk/ons/rel/elmr/economic-and-labour-market-review/no–12–december-2008/the-distribution-of-household-income-1977-to-2006-07.pdf

 

A 2011 study “Divided we Stand: Why Inequality Keeps Rising” by the Organisation for Economic Co-operation and Development (OECD) investigated economic inequality amongst workers in OECD countries.  The main reason for increasing inequality seems to be an increased difference between the demand for, and supply of, particular skills.

https://en.wikipedia.org/wiki/Economic_inequality#Measurements

That probably applies to the UK, and explains the ONS finding above.

http://www.oecd.org/social/in-it-together-why-less-inequality-benefits-all-9789264235120-en.htm

It also blames:

  • failures of education for poorer households (I would add “lack of vocational education”),
  • lack of retraining during later life,
  • insecure and part-time work,
  • lack of opportunity for women (but only worth 1 point of Gini coefficient),
  • lack of good quality jobs,
  • labour market segmentation (certain careers are only open to certain types of worker), and
  • less income redistribution through taxation (perhaps the general switch to indirect taxation of expenditure).
  • More assortative mating (the phenomenon of people marrying people with similar background, for example doctors marrying doctors rather than nurses).

 

This list may be long, but it is not exhaustive, nor is it focussed exclusively on the UK.

One thing I omitted to mention in my first draft of this post is the possibility of policy measures to avoid/mitigate income inequality.  I will consider this in a later posting.

 

 

What has happened to UK household income inequality historically?

UK ONS figures suggest that the income growth of the middle 1/5 of households (only) has tracked national GDP since 1977, in contrast to the trend of declining incomes (relative to GDP) in the USA.

http://www.ons.gov.uk/ons/rel/household-income/middle-income-households/1977—2010-11/rpt–middle-income-households.html

 

However (for reasons which emerge below), the following report tells a different story for household incomes across the entire distribution:

www.ons.gov.uk/ons/rel/elmr/economic-and-labour-market-review/no–12–december-2008/the-distribution-of-household-income-1977-to-2006-07.pdf

 

“Income inequality is relatively high in the UK compared with many other European countries.”

 

It says that 1977-1991 was “a period of substantial change to the income distribution”, whereas 1992-2002 was “a period of relative stability”. It continues: “During the 1980s there was a substantial increase in income inequality caused by increased inequality in the distribution of income …”. “No shit, Sherlock”? (if you will pardon the expression!)

 

“Between 1977 and 1996/97 the proportion of retired households in the bottom income quintile group decreased, while the proportion of children living in households in the bottom quintile group increased.” So that’s an increase in inter-generational income inequality (a term that I have just invented).

 

“The extent of inequality within an income distribution is commonly measured by the Gini coefficient [see my previous post on measuring inequality]. On the basis of this measure, inequality increased substantially between 1977 and 1990, with the most rapid increase taking place in the mid and late 1980s” … In the discussion of alternative measures of inequality and why they disagree with each other: “much of the increase in inequality was due to income growth at the top of the income distribution” …”the households which benefit from growth in income from employment are predominantly in the middle and upper part of the income distribution. Consequently, in periods of rapid growth in employment income, these households ‘pull away’, while during periods of low or falling employment income other households, those predominantly reliant on benefit and pension income, have a chance to ‘catch up’.”

 

Others (in the OECD) have mentioned an increasing disparity in the way certain skills are rewarded in the economy. This seems broadly consistent with the ONS report.

 

The income growth at the top of the income distribution explains why the ONS report based *only* on the middle 1/5 of households fails to reflect the full story.

More here: https://www.equalitytrust.org.uk/how-has-inequality-changed

 

 

What is economic inequality?

What is economic inequality?

Wikipedia says: “Economists generally think of three metrics of economic disparity: wealth, income, and consumption”.  Let’s leave aside how much people freely choose to consume, and look only at their underlying wealth and income.

As Wikipedia says, the balance between income and wealth changes with career progress.  For most people, the majority of their wealth is not inherited, and is thus a product of household income.  Income thus appears to be the main driver of inequality.

Note: breakup of households (due to increasing divorce rates) is also believed to have a significant effect on household inequality, as you might expect.

Income can be measured at the level of the individual, or (more meaningfully) at the level of the household.  The household is the same level at which the ONS measure income inequality.

Issues remain about how to compare full-time workers with part-time, and comparing self-employed with employees.  Using household income (partly) overcomes these issues.

Inequality can be compared before or after taxation, and can opt to take into account public services.  These would make figures even harder to understand.

So, IMHO concern should be focussed on net income inequality at the household level.  Ideally this should include income from capital, asset transfer (eg inheritance) and savings.

 

How do you measure economic inequality?

https://en.wikipedia.org/wiki/Economic_inequality

… There are various numerical indices for measuring economic inequality. A widely used one is the Gini coefficient https://en.wikipedia.org/wiki/Gini_coefficient , but there are also many other methods https://en.wikipedia.org/wiki/Income_inequality_metrics.  The Gini measure has a number of shortcomings.  It is not intuitive, it does not indicate the income level at which the inequality exists, it gives peculiar values under certain demographic conditions, and negative income/wealth values also generate strange values.  However it does have general acceptance and it takes account of all income inequality.

Note: attempting to understand the integral calculus involved in the Gini coefficient can cause headaches – stick to the graphical description!

Why worry about economic inequality?

It is generally agreed that economic inequality (however defined, and measured) is bad for social cohesion, and bad for economic growth.
https://en.wikipedia.org/wiki/Economic_inequality

The corrosive effect on social cohesion seems self-evident.  That would also seem to suggest a potential problem for democracy, as economic disposession leads to the rise of political extremism (and potentially an imminent disastrous British exit from the European Community).

The problem for economic growth is that if all the nation’s capital is in the hands of an oligarchy, then there will be a shortage of disposable income for the consumption of anything except luxury goods (and not that many of those).  Without retail spending, and house purchase, the UK economy will tend to stall.
(This growth based on unsustainable spending is far from ideal, but at present that seems to be the reality.  Others have argued for prioritising economic stability over growth.
https://en.wikipedia.org/wiki/Tom%C3%A1%C5%A1_Sedl%C3%A1%C4%8Dek_%28economist%29)

Several OECD reports warn about the damage to social cohesion and economic growth.

May 2015“In It Together: Why less Inequality Benefits All”
http://www.oecd.org/social/in-it-together-why-less-inequality-benefits-all-9789264235120-en.htm

A 2011 study “Divided we Stand: Why Inequality Keeps Rising” by the Organisation for Economic Co-operation and Development (OECD).
https://en.wikipedia.org/wiki/Economic_inequality#Measurements

In the UK the Office for National Statistics has a statistical theme of household income inequality, which at least suggests some concern about this issue in central government
http://www.ons.gov.uk/ons/taxonomy/index.html?nscl=Income+Inequality+of+Households

Prominent individual sociologists have also expressed concern.  Professor Danny Dorling of Oxford University is an example:
http://www.dannydorling.org/books/onepercent/

As have a number of prominent economists:
http://www.bbc.co.uk/news/business-34987474
(includes a podcast)

Day 2 of the UK Vegetarian Society’s new era

Two days ago (on 13 June 2015) the UK’s Vegetarian Society Extraordinary General Meeting passed a special resolution to remove the accountability of the trustees to the membership, permanently. The way the vote went is unsurprising. The trustees and Chief Executive have repeatedly mislead the membership as to the purpose of the meeting and the implications of that vote. That deception by the trustees is soon to be the subject of a legal challenge and has already been reported to the Charity Commission. See: http://www.vegsocmembersrights.org/ for details.

We may have lost that battle, but the war goes on.

None of the many and varied justifications put forward by the trustees for the disenfranchisement of the VSUK membership make sense.

* Despite the claims of trustees (letter of 21 May), members could already opt out of being a company member, with the acompanying liability to pay a whole £1.00 if the society went bust after 160 years and the need to disclose their address to other shareholders on request (VSUK Company Membership Policy, Sep 2011).
* The model constitution provided by the Charity Commission actually does not encourage charities to disenfranchise their members, in contradiction to the claims of VSUK’s trustees. The Charity Commission’s own statistics (from 2004) state that the majority of UK charities had not done this.
https://www.gov.uk/government/publications/membership-charities-rs7
* Claims by the trustees and Chief Executive that the change is “necessary to campaign more on environmental issues” are self-evidently untrue. Friends of The Earth does not operate in the way that the VSUK now does.
* Statements that “Members will continue to be at the heart of our charity” and “We will continue to build a real sense of community for all members” (leaflet “Growing for Our Future”) are not consistent with the plans of the trustees to become accountable only to each other and the Charity Commission, not to the members.
* Claims in the same leaflet that they “need to keep costs down” by passing this proposal are undermined by the trustees paying to send all members a petty and spiteful letter (naming and shaming those opposed to the proposal, giving their home addresses to all members) and then reminder cards, both separately from the magazine. If any government proposed to abolish elections “to keep down costs” and remain in office forever I doubt that the population would be happy. Democracy costs money, but it is money well spent. Without democracy a membership institution has no legitimacy and members are not encouraged to participate.
* To add insult to injury, the trustees will be charging the members more each year.

Trustees claim to adher to the Nolan principles, devised for government ministers.
https://en.wikipedia.org/wiki/Committee_on_Standards_in_Public_Life#First_report
These include honesty, objectivity, selflessness, openness and accountability. As I said to the Chief Executive (Lynne Elliott), you cannot hold trustees accountable by “unliking” their policy on Facebook, you need to be able to vote them out. I cannot see how the trustees have been “honest” in their EGM notice and the reasons for their proposal. They certainly have not been “open” in disclosing the advice from “consultants” they have paid for, and which is supposed to have led them to make this divisive governance decision. They could have chosen to have a full and open debate in the magazine, with implications spelt out in detail and arguments for and against. In the absence of “openness” it is impossible to know whether they have adhered to “selflessness”, or whether they intend to award themselves salaries later (unlike the majority of UK charity trustees in Grant Thornton’s 2013 review of governance).
http://www.grant-thornton.co.uk/Publications/2013/Charity-Governance-Review-2013/
Should they decide to do this members would now have no say in the matter. It is also possible that the apparently autocratic, remote and over-professionalised trustees anticipate that their expensive “KIN” event on 11 July 2015 is likely to be a financial disaster and do not wish to be held accountable for this. Without “openness” as to the reasons for their potentially disastrous governance decision it is also impossible to know whether they have been objective, or not.

To my mind the main asset of the UK’s vegetarian movement is the energy and enthusiasm of the organisers of local vegetarian groups. The trustees may now control Parkdale and the VSUK bank accounts without any accountability to the membership, but the strength of the vegetarian movement lies elsewhere. Meetup, Facebook and Twitter combined will not campaign on a wet afternoon on the local high street. You don’t encourage local groups by disenfranchising their members. On the contrary, this measure will encourage them to disaffiliate from VSUK.  Similarly, members are not encouraged to campaign actively for vegetarianism by being reduced to the status of passive customers within the Vegetarian Society.

Without accountability you get impunity and that leaves all of us at risk.

Della Reynolds has hit the nail on the head. There is a lack of proper accountability at the PHSO. In a democracy there is no legitimacy for a government body without democratic accountability.

phsothetruestory

This excellent article by Bruce Newsome needs to be read in full.  Looks like it takes an outsider to see what a hash we are making of reforming NHS complaint handling and the PHSO in particular; though all credit to Bernard Jenkin and PASC for tackling this issue head on.  We must continue to work together, public and parliamentarians if we are to deliver a proper and fit Ombudsman service as a result of the PASC inquiry.

British Health Department Must Handle Complaints Over Health Care

Why does the Department of Health not accept public health complaints?

The British Parliament’s Public Administration Select Committee (PASC) has reported

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