This month’s labour market statistics prove the importance of reading past the headline. As we delve into the data (from ONS), the nuance and the trends, it becomes painfully clear that the highlighted ‘record number of job vacancies’ fails to translate into tangible opportunities for all young people. Despite the seemingly positive reduction in unemployment levels, employment itself is unchanged from last month, and a significant proportion of unemployed young people are still not work ready. This is because they lack the necessary technical and life skills needed to enter the labour market.

Nationally, the unemployment rate is nearly back to its pre-pandemic level, with notable falls during the most recent quarter. However – and crucially – the reduction in unemployment isn’t translating into higher employment. Employment numbers are 600,000 below pre-pandemic figures, and have remained even since last month.

The West Midlands is following this trend, with unemployment falling by 0.2% and employment rising by 0.3%. Equally, job vacancies are at a record high, with recruitment efforts failing to secure the required talent. There has also been minimal growth in ‘real pay’.

So, why isn’t the reduction in unemployment translating into higher employment, particularly with vacancies above pre-pandemic levels in every single sector.

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The answer is that it’s due to economic inactivity and low labour force participation.

We are experiencing an incredibly tight labour market, at 1.1 unemployed per vacancy, the lowest in 50 years. The number of economically inactive people has risen by 400,000. And it’s a multi-faceted problem, largely driven by fewer older people in work and increasing numbers falling victim to long-term ill health. The number of young people in education, early retirement trends, and changing working patterns following pandemic lockdowns are all contributing to the situation. The labour market was increasing positively pre-pandemic, so these reductions in participation are even worse than they look.

Whilst the long-term unemployment rate for young people is levelling off (driven by support initiatives like ‘Kickstart’), a key concern is the significant increase in worklessness among young people outside of education, with the number of those not looking for work growing too.

Inextricably linked to worklessness (as well as ‘underemployment’) amongst young people (outside of education) is a growing mental health crisis. As well as mental health challenges for young people who are classed as NEET (not in education, employment or training), too many young people are finishing school with poor mental health and wellbeing (which also impacts on their educational attainment). Consequently, they lack many of the technical and life skills required to successfully enter the job market for the first time. The charity ‘Mind’, in its ‘Not Making The Grade’ report, highlights that secondary schools are struggling to meet the needs of young people with mental health problems.

The road ahead continues to be challenging and uncertain, but there are growing calls for the Government and employers to play a new role in tackling this emerging crisis.

Employers need to design recruitment, jobs and work cultures to be more inclusive, more flexible and with more security. I’ve previously written a blog on ‘How Businesses Can Support Youth Unemployment’, which delves further into measures firms can take.

The Plan for Jobs has prevented an unemployment catastrophe, but it’s not addressing these emerging needs and challenges, with a greater focus required on supporting all those out of work – not just the unemployed. Sport 4 Life UK has joined the call for a new ‘Plan for Jobs’ that raises participation and tackles the current recruitment crisis.

Sport 4 Life remains committed to its current strategy of changing the lives of young people in the West Midlands, by supporting them towards sustained employment, education and training outcomes.