Young People to repay benefits by taking out a loan!?

Jobs Centre

Back in late 2008 when I penned the draft of the Campaign’s Open Letter I suggested that a window of opportunity might be emerging, that the system was in crisis [and I hadn’t been drinking]. Over six years later, whatever my hopes, neo-liberalism has survived scandal after scandal testifying to its inherent greed. Indeed the austerity, which serves only to widen inequality, continues to be imposed. The window is barely ajar. In this context we should take seriously the latest proposals from an influential group within the Tory Party. The war on young people and society at large continues apace.

Turn benefits into repayable loan, says Tory group

“Young individuals who have not yet paid national insurance contributions for a certain period, five years say, could receive their unemployment benefit in the form of a repayable loan.

“An unemployed teenager would still receive the same amount of cash as now, for example, but they would be expected to repay the value once in work.

“Turning an entitlement into a loan would mean that people would still be supported while out of work, but would have an additional incentive to find work rather than allow the debt to build up.”

Even if someone was out of work for the entire seven years between 18 and 25, “the total sum repayable would be £20,475 – considerably less than the tuition fees loan repayable by many of his or her peers”.

This is the neo-liberal version of equality. Students must pay for their education. Young people must pay in future for their benefits. Meanwhile the Market fails to deliver jobs.

See The NEET problem is also a jobs problem by Martin Allen

Yet the NEETs problem represents the sharp end of a wider youth employment problem. While there’s a notable correlation between low levels of qualifications and becoming NEET and that NEET’s are more likely to have lower levels of basic skills, at the other end of the spectrum is the increased numbers of youth people who are ‘over skilled’ and ‘underemployed’ in the work they do –OECD now puts this figure at I in 8.

This problem is particularly acute in the UK with up to a third of graduates having to take non-graduate jobs, resulting in the bumping down of those who would generally have done these jobs into lower skilled and lower paid employment. Because there’s been a more than proportionate increase in the growth of unskilled work, there’s been an even larger increase in the number of people or who are able to do it. Generally employers will favour those with more qualifications. But, something on which UK skills agencies regularly comment, unless there are proper incentives employers are less likely to want to employ young people without previous employment experience, when they can take on adults instead.

And for a view of the wider context,

George Osborne moves to peg public finances to Victorian values

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