The problem of young people not in employment, education or training: Is there a ʼneet’ solution?

Abstract

For a long time Post Keynesians have argued convincingly that national unemployment rates, together with their accompanying regional variations, are not due to labour market rigidities such as the real wage being too high. The primary cause is the lack of effective demand and the absence of jobs. But this does not mean that the supply side can be neglected. Long periods of unemployment lead to deterioration of skills and lack of motivation, such that even if demand picks up, the efficiency of these workers will have been greatly eroded. But what is of even greater cause for concern is the rapid growth in the UK of the number of young people who are likely never to have held a job since leaving school. This would not be so much of a problem if they had been in training or education, but there has also been a rapid rise in the last few years of young people who are inactive and not enrolled in education or training. These are the so-called ‘Neets’. The danger is that they may well never adapt to the routine and the structure of the working day and have few of the minimum skills that are demanded by employers. There is the real danger of the development of an underclass of people, primarily in the depressed regions and the inner cities, who will never have held a job and will be literally unemployable.