By Carl Hasty, Director of Smart Currency
Youth unemployment is a hot topic at present, and rightly so given that the costs on the national economy are enormous: lost income tax revenues, higher welfare payments, lower consumer spending power and increased healthcare costs for stress and mental illness are costing the UK billions of pounds.
While dropping 0.1 per cent in the first quarter of 2013, more than one in five 16 to 24 year olds (20.7 per cent) in the UK remain out of work or full-time study.
The situation is even worse in Europe, with more than half of young people unemployed in the likes of Spain and Greece. The reasons for this situation are complex. But so too are the means of addressing it.
A survey by the Institution of Mechanical Engineers late last month found that more than half of manufacturers in the UK (53 per cent) believe young people lack the core skills needed by their business.
At the same time, there has been a push for interns to receive a full-time salary as a means of bumping up the employment figures and overcoming the unethical practices of some businesses by “employing” interns on an indefinite basis to lower wage costs.
However, such a move ignores the fact that internships generally benefit the intern more than the business —particularly for small export firms, given the costs of supervision and lost productivity. Worse still, enforcing paid internships may prove counter-productive by reducing the number of companies willing to take on interns, denying them valuable industry experience and a means of perfecting their career search.
The logical solution is for a balanced approach by all relevant parties, backed by strong Government leadership. Reforming education curricula to reflect modern business needs, while encouraging ethical workplace internships to give young people practical experience, would go a long way to addressing an issue which has far too many detrimental effects on our youth and on our nation.
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