Young, gifted and let down

The Government should deal with corporate employers rather than blame young people for a lack of skills, argues Susan Bender.

Young people, according to most British businesses, lack the skills and discipline to work. Employers are outspoken about the economic impact of an unskilled labour market. Yet many are doing little to help.

Employers appeared to be ambivalent since the announcement of the Government's Welfare-to-Work plans. Take the response to the Welfare-to-Work proposals by the Midlands car manufacturer Peugeot. Personnel director Mike Judge said that the company will take on only well-qualified young people to work on the production line ("Sceptics cast doubt on Welfare to Work", TES, August 15).

Peugeot says it cannot join the Welfare-to-Work initiative. Why? Because a decade ago the company took on a number of unemployed people and absenteeism increased.

Sir Dominic Cadbury, chairman of Cadbury Schweppes, and vice-chairman of the new Qualifications and Curriculum Authority, may be right to criticise a system that leaves many young people unprepared for work. But, as education and training chairman of the CBI, he must be aware of the poor record that British business has in training young people.

Employers are in a strong position to improve youth training with their dominating presence on the training and enterprise council boards. Yet many TECs have slashed training budgets, opting to accumulate reserves or engage in prestigious enterprise projects.

Between 1992 and 1996, there were massive reductions in training expenditures for both Youth Training (69 per cent) and Training for Work (81 per cent) that cannot be explained solely by falling participation rates. At the same time, reserves have increased so that by the end of the 1996 financial year, TECs had accumulated around Pounds 250 million. This is set against total cuts of Pounds 176m.

Employer investment in training shows an abysmal decline, falling from Pounds 14 billion in 1987 to Pounds 10bn in 1993. Since TECs have been up and running, employer investment has declined by a quarter. Voluntarism clearly is not working.

Earlier this year, The Children's Society published a report on young people's prospects in the new labour market.

Many young people had gone from one training scheme to another. They ended up sweeping floors and making coffee on a subsistence wage. In other words, they were being used as cheap, subsidised and disposable labour.

Instead of supporting some of the most exploited people in our economy, some unions are also jumping on the bandwagon, if comments in The TES from a spokesman for the shop-workers' union USDAW are anything to go by.

His comments about young people making themselves unemployable by dying their hair and piercing their noses took the argument from passive short-termism to gratuitous abusiveness.

What these organisations fail to do is face up to the need for a skilled labour force and the collective responsibility to ensure there is one.

Compare this with employers abroad. In Germany, about two-thirds of young people in the job market receive apprenticeship training. This costs businesses, because there is no guarantee that the apprentice, once trained, will stay on. But employers still participate because they recognise the general need for a supply of skilled staff with work experience.

In France, businesses are required to set aside at least 1.2 per cent of their wage bill to finance training. This is on top of an apprenticeship tax.

Chancellor Gordon Brown has placed himself in the same unenviable position as President Bill Clinton who has sanctioned similar state welfare-to-work schemes. Both must try to persuade employers to take on young workers at subsidised rates and both are being forced to rely on the "goodwill" and "volunteer spirit" of the corporate world.

Other attempts to tackle general unemployment through subsidies, such as components of the Working Nation programme in Australia between 1994 and 1996, foundered on the failure of employers to take up the subsidies.

The deregulation of the labour market has absolved companies from many of their responsibilities while hitting young workers particularly hard. According to the general workers' union, the GMB, more than 2 million young people between the ages of 13 and 24 who fill the flexible labour market pool are on pitiful wages although their employers make large profits.

One-third of the jobs pay less than what a young person would get on state benefits. A leading brewery, for example, pays an hourly rate of Pounds 3.07 to its bar staff who are over 18, despite company profits of Pounds 286m.

What the Government should do is transfer to the employers the compulsion built in to its new deal for young people. This could take the form of a compulsory levy or registration scheme with a membership fee so that corporations, which benefit from a skilled labour force, do something towards creating one.

Finally, if reducing unemployment is the primary goal of the Government's Welfare-to-Work programme, then something needs to be done to ensure that young people who complete their training can get a job paying a decent wage.

Skills training is not a panacea for the disproportionately high levels of unemployment young people face - particularly young blacks and southern Asians. Job creation is needed in both the private and public sectors as well as a minimum wage which covers all young people.

Young people have been tolerant of the ineffective and often exploitative schemes they have been offered. They want training and work which pays them a realistic wage, treats them fairly and offers something for their future.

And for those who need additional help to become ready for training or work, the same principles apply. Rather than feeling compelled to crack the whip with this group because of a faulty premise about the willingness of young people to participate, the Government should feel compelled to deal with what is probably the most reluctant member of the partnership they talk so much about - corporate employers.

Susan Bender is policy officer with The Children's Society and author of After the Windfall: Young People's Prospects in the New Labour Market

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