The Department of Work and
Pensions was uncharacteristically sotto voce yesterday when it released figures
on the labour market status of Britain’s ethnic minorities for the 20 year period
up to and including September 2013. Those looking for a brief summary had instead
to wade through a series of data spreadsheets in order to single out the key headlines
for themselves.
My attention was
drawn to the figures on youth unemployment, which has yet to be significantly
affected by the emerging economic recovery. Although the vast majority (8 in
10) of the almost 1 million young unemployed people in Britain at present are
white, it’s clear from an interrogation of the data that youth unemployment is
disproportionately affecting at least some of Britain’s ethnic minorities.
The headline
unemployment rate for whites aged 16-24 (19% in September 2013) is much lower
than that for blacks (45%), young people of mixed race (26%), Indians (34%),
Pakistani/Bangladeshis (46%) and Chinese (29%). As is well known, however, our
perspective of youth unemployment is affected by the fact that so many young
people participate in full-time education – which reduces the size of the
active workforce and raises the measured unemployment rate – and includes young
people in full-time education who are looking for work.
If instead one looks at
unemployed jobseekers not in full-time education as a proportion of all young
people in the 16-24 age group the adjusted ‘youth unemployment rate’ for whites
is measured at 10.4% rather than 19%. Moreover, since people from different
ethnic groups have different propensities to enter education or to look for
work this adjustment likewise alters our view of youth unemployment rates for
the other ethnic groups, in some cases markedly: 12.1% for blacks, 10.1% for
young people of mixed race, 10.9% for Indians, 15.3% for
Pakistani/Bangladeshis, and 5.4% for Chinese.
Unlike the headline youth
unemployment rates, the adjusted rate suggests that only two ethnic minorities,
blacks and Pakistani/Bangladeshis, fare much worse than whites, while young
Chinese fare much better. However, some commentators object to this adjustment
for a variety of reasons, notably because it excludes young inactive jobless
people not in full-time education. Adding these people to young unemployed job-seekers
(to obtain a figure broadly approximating to that for young people not in
employment, education or training, or ‘neet’) is problematic since not all
jobless people want to work or study at any given time. But while doing so
shows ‘neet’ rates to be higher than adjusted unemployment rates they also offer
a different perspective on ethnic minority joblessness than that conveyed by the headline youth
unemployment rate: 19.3% for whites, 19.9% for blacks, 17.7% for young people
of mixed race, 19.1% for Indians, 26.9% for Pakistani/Bangladeshis and 14.2%
for Chinese.
A positive aspect of
these figures is that they show relatively little change in the relative
position of the various ethnic groups since before the recession in 2008. But the
persistence of an ‘unemployment gap’ between black, Pakistani/Bangladeshi and
white youths on all these various measures suggests that there is a larger
structural element to the problem of youth unemployment for some ethnic
minorities that won’t be solved by a stronger economic recovery alone.
It remains my view
that around half the current total level of youth unemployment is due to weak
demand for labour. As a result we should start to see a substantial and welcome
fall this year if, as I now expect, job vacancies return to the pre-recession
level. However, while urgent improvement in skills and employability is needed to
reduce the remaining structural component of the problem, with ethnicity such a
significant feature of youth unemployment for some groups more has to be done
to tackle the racial inequality that also appears to be a key underlying causal
factor. This receives too little attention in policy discussion of solutions to
youth unemployment and ought to be highlighted.
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