Work and Pensions Committee - Youth Unemployment and the Youth ContractWritten evidence submitted by the Runnymede Trust

About Runnymede

The Runnymede Trust is a social policy research organisation focused on race equality and race relations. We work by:

Identifying barriers to race equality and good race relations;

Enabling effective action for social change; and

Influencing policy at all levels through providing thought leadership and robust evidence.

Further information is available on our website: www.runnymedetrust.org

Summary of Evidence

The Runnymede Trust is extremely concerned about the high rates of Black and Asian unemployment in the UK, and we believe that the Committee should focus some attention on the issue during its inquiry. We do not think that the government’s current approach will substantially decrease unemployment of these groups, and we believe that tailored policies should be introduced, such as mentoring schemes for those groups most affected. We also think that the success criteria for the youth contract should include the number of ethnic minority young people helped under the scheme to enter the labour market.

Overview of Statistics

1. Unemployment rates of young Black people are at high levels. 55.5% of economically active Black men, aged 16–24, are unemployed. This figure has nearly doubled since 2008. The overall figure is 44.4% for all Black people aged between 16–24. For economically active Asian people aged between16–24, unemployment has risen from 22.8% in 2008 to the current figure of 26.7%. Breaking it down by specific groups, this is 24.2% for Indian young people and 33.6% for Pakistani/Bangladeshi young people. In comparison, the White British youth unemployment rate out of those who are economically active is 20% (ONS 2012)

2. To compare to adult unemployment rates, 19.7% of economically active Black people, 9.4% of Indian people and 15% of Pakistani/Bangladeshi people are unemployed. This compares to 7.6% of economically active White people (ONS 2011)

Reasons behind Black and Asian Young People’s Comparative Disadvantage in the Labour Market

3. Evidence suggests there is a combination of reasons why unemployment rates are high amongst these groups, including discrimination, lower educational attainment, attending less prestigious universities, living in areas of high unemployment, migration and sector clustering.

4. On discrimination, research by the Department for Work and Pensions found that if you have an African or Asian sounding surname you need to send approximately twice as many job applications as someone with a traditionally English name to get a job interview. Those sending applications in the research applied in similar terms for the same jobs. The same research found that public sector employers had a discrimination level of 4% while private sector employers had a discrimination level of 35%.1

5. On education, Black Caribbean, Bangladeshi and Pakistani children have, on the whole, lower attainment at school than other groups and are less likely to attend the most prestigious universities with the highest employment rates. In addition, Black Caribbean boys are more likely to be excluded from school, meaning that they are less likely to gain academic qualifications and, consequently, employment.

6. For example, only 6.8% of Black Caribbean students taking their GCSEs in 2010 achieve the government’s English Baccalaureate measure, compared to 15.4% of white British students. 9.3% of Bangladeshi pupils and 10.3% of Pakistani pupils achieved the measure.2

7. Whilst the proportion of university places taken by minority ethnic students has increased from 13% of students in 1994–95 to 23% in 2008–09, a figure broadly proportionate to their size in the young population, these students are more likely to attend less prestigious institutions which have lower employment rates. For example, at least 44% of all Black, Pakistani, Bangladeshi and Indian graduates attended post-1992 universities, or former polytechnics compared to 34% of other ethnic groups.3 In addition, 8% of all Black university students attend Russell Group universities compared to 24% of all White students.4 In 2009 only one Black Caribbean student was accepted to study on a course at Oxford University.5

8. These trends have an impact on graduate employment prospects and earnings. Minority ethnic graduates are more than twice as likely to be unemployed after graduation compared to White students. Many of the universities with the highest minority ethnic populations have the lowest employment rates, and given the currently poor prospects for graduates generally, this is likely to have an adverse effect on minority ethnic employment. Studying at a Russell Group University has been found to boost a graduate’s earnings by between three and 6% compared to studying at a “new” university.6

Government Work on Race and Unemployment

9. There have been mixed messages from the government on specific measures to tackle overall Black and Asian unemployment. We welcomed Nick Clegg’s Scarman Lecture last year where he announced an inquiry into fair access to business finance, which may support more Black and Asian people into self-employment.

10. However, alongside this the government has suggested that it does not want to introduce tailored policies to tackle ethnic inequalities in employment. For example, in response to a Written Parliamentary Question from Kate Green MP asking if the government plans to introduce policies to tackle youth unemployment, Employment Minister Chris Grayling MP said that the government’s approach provides: “flexible, tailored support to all eligible unemployed job seekers according to their needs, irrespective of ethnicity”.7

11. In addition, there has been no leadership on this issue from the Department for Communities and Local Government, the Department responsible for race equality. The department’s focus on integration is intended to include race equality, yet its recently published document Creating the Conditions for Integration includes no mention of the high levels of Black and Asian unemployment.8

12. However, given that the unemployment rates of Black and Asian people are so high, particularly amongst young people, we believe that mainstream policies will not address the specific underlying issues driving these inequalities. It is worth noting Professor Yaojun Li’s research, which highlights that Black people are now more likely to be unemployed in Britain than in the US due to lack of intervention from UK governments in comparison to the US.9

Design of the Youth Contract

13. We are encouraged that the government has introduced a series of measures to help tackle youth unemployment. However, we are concerned that this approach takes no consideration of the high unemployment levels of particular ethnic minority groups, and offers no tailored support for these groups.

14. Research in 2010 by the Black Training and Enterprise Group (BTEG) found that ethnic minorities are substantially under-represented in apprenticeships, a initiative which is part of the Youth Contract. We support the work of the National Apprenticeship Service in setting up diversity pilots around the country to increase the number of ethnic minorities in apprenticeships, but information coming out of these pilots has not yet been forthcoming. We would welcome the publication of results of these pilots to be published, and would be keen to find out whether there is any best practice resulting from the pilots which can be rolled out across the country. We would also recommend that the government monitor how many Black and Asian apprentices move into full time work after their apprenticeships end.

15. We also believe that the success criteria for the youth contract should include the number of ethnic minority young people helped under the youth contract to enter the labour market.

16. Given the scale and urgency of youth unemployment, we also believe that the government should develop appropriate policies such as after two years on the Work Programme any claimant under 25 should be offered a guaranteed job and additional support, as recommended by the Riots Communities and Victims Panel and IPPR.10

17. We also recommend that the government introduce initiatives such as a large-scale mentoring scheme for those groups who suffer high rates of unemployment. David Cameron proposed a mentoring scheme for black entrepreneurs before the 2010 election, which has never made it into his government’s policy.11 In addition, Boris Johnson promised 1,000 mentors for young Black men—this remains to be delivered.

How the Youth Contract will be co-ordinated between government departments

18. We believe that there should be a role for the Department for Communities and Local Government in the co-ordination of the Youth Contract given its responsibility for race equality. Given the government’s assertion that equality is at the heart of all it does, the Department for Communities and Local Government should ensure that race equality is at the heart of the Youth Contract, and that the scheme plays a role in decreasing the inequalities in unemployment rates between ethnic groups.

25 April 2012

1 DWP (2009) Research Report No 607 A test for racial discrimination in recruitment practice in British cities, http://research.dwp.gov.uk/asd/asd5/rports2009-2010/rrep607.pdf, Wood, M. et al

2 Runnymede Trust (2011) Black students half as likely to achieve the English Baccalaureate http://www.runnymedetrust.org/uploads/EnglishBacpressrelease.pdf

3 National Equality Panel (2009)

4 The Runnymede Trust (2007) Not Enough Understanding? Student Experiences of Diversity in UK Universities, http://www.runnymedetrust.org/uploads/file/Not%20Enough%20Understanding%20-%20final.pdf

5 University of Oxford (2010)

6 The Runnymede Trust (2007) Not Enough Understanding? Student Experiences of Diversity in UK Universities, http://www.runnymedetrust.org/uploads/file/Not%20Enough%20Understanding%20-%20final.pdf

7 Available here: http://bit.ly/HIKGxH

8 Department for Communities and Local Government (2012) Creating the Conditions for Integration
http://www.communities.gov.uk/documents/communities/pdf/2092103.pdf

9 Available here: http://bit.ly/J1ibcw

10 Riots Communities and Victims Panel (2012) Final Report http://riotspanel.independent.gov.uk/wp-content/uploads/2012/03/Riots-Panel-Final-Report1.pdf

11 Available here: http://bit.ly/aT5fdV

Prepared 19th September 2012