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Number of young and jobless will rise, warns economist

By Russell Lynch

Published 27/10/2009

A leading labour market expert has warned of a fresh surge in youth unemployment.

Around one in five or 946,000 under-25s are out of work in the UK but former Bank of England rate-setter David Blanchflower called this the “lull before the storm” as graduates and school leavers enter a bleak job market.

He said the school leaving age should be raised to 18 and unemployed graduates used as teaching aides to combat youth unemployment. He also urged wage subsidies and the scrapping of national insurance contributions for those under 25 to encourage employers.

Warning of the “permanent scars” caused by youth unemployment, he said: “This is a war — we have to deal with this situation now because the consequences of not dealing with it are even worse.”

He also wants more investment in infrastructure to create jobs as part of a package of “temporary and targeted” measures which could be withdrawn as the economy edged back to health.

The former Monetary Policy Committee member — who predicted the recession but was ignored by colleagues until the financial crisis struck — already expects overall unemployment to reach 3.4m. But he forecast this could reach “four or even five million” if stimulus measures were withdrawn too soon, risking “pushing us into a depression”.

“Unemployment is going to be high for some time to come. It is hitting the least skilled, minorities and the young the most. Government policy is helping, but the scale of that help is much too small. We need a big expansion of education,” he said.

Professor Blanchflower was speaking at an event held by V, the National Young Volunteering Service set up three years ago.

Belfast Telegraph

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