Background: Young People and Money
At the March Sitting, MSYPs will discuss issues around the theme of ‘Young People and Money’. You don’t need to be an economic expert to take part, just to share your views and those of the young people you represent. Below is a bit of background info to introduce you to this hugely important current issue and to give you a bit of food for thought before the Sitting.
The debates on the Saturday will be:
- Young people are being disproportionately affected by the recession and should be a priority for action.
- Young people must be able to access quality, practical careers advice which reflects the reality of education, training and work opportunities available to them.
- The recession is no excuse for taking advantage of young people in the workplace - everyone deserves equal rights and equal pay.
- The success of Scotland’s students must not be compromised by financial worries. Immediate action needs to be taken to ensure students don’t face poverty and hardship in pursuit of their education.
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What exactly is the recession?
The economic recession has dominated news headlines over past year and a half, and has had a massive influence on political debate, Government policy. This is because it affects the lives of everyone in one way or another, with some people having dramatic changes in their lives as a result of it.
A recession is defined as ‘a slowdown in economic activity’, ‘a business cycle contraction’ and is measured by several statistics, such as employment, the Gross Domestic Product (GDP) and inflation. Unless you’re an economist that won’t mean very much, but in basic terms it basically works like this:
1. People stop spending as much money as they did before.
2. This in turn means that businesses don’t take in as much money, causing them to cut jobs or even go out of business altogether.
3. This then causes less jobs, which means more people unemployed and having less money to spend
4. People have less money to spend so they stop doing so, taking us back to 1!
This circle can be caused by a number of things. In the case of this recession, many believe it was provoked by the ‘credit crunch’ where banks made risky loans to people that couldn’t pay them back and were forced to dramatically cut back on the amount of money they could loan to everyone else. To get out of the circle and get people spending money again needs some action by Government.
What does all this mean for young people?
The biggest effects are related to unemployment and the lack of employment opportunities. Young people or their parents can lose their jobs through being laid off (made redundant) and with fewer jobs going round, this can cause sustained periods of unemployment for many people. This has many negative effects for the person and their family, with significant cuts in their standard of living, with some being forced into poverty. Unemployment may negatively affect someone’s confidence and mental health. It is likely to cause a great deal of stress and uncertainty.
Research has shown that young people, along with low-skilled and low-educated workers are particularly hard hit by unemployment in a recession. In October a report published by the Scottish Trades Union Congress (STUC) showed that youth unemployment in some parts of Scotland had more than doubled and the number of young people out of work across Scotland as a whole had risen by 75% in the last two years. Recent figures show that unemployment in Scotland is still on the rise, with 10,000 extra people out of work in the last three months of 2009. This brings the total up to 206,000 people in Scotland, up 46% in a year.
Crucially, rises in unemployment will often last longer than the recession, meaning that youth unemployment numbers could well get worse before they get better.
What have the UK and Scottish Governments done about it?
Economic and employment policies are reserved issues, so are the responsibility of the UK Government, though through the use of public spending, the Scottish Government can work towards tackling some of its effects. To try and end the recession the UK Government introduced a ‘fiscal stimulus’ package to try and get people spending again – this included cutting the rate of VAT (sales tax), boosting its own spending and a number of smaller actions designed to encourage people to spend, such as the scrappage scheme designed to encourage people to buy new cars to replace old ones. In its ‘Economic Recovery Plan’ the Scottish Government prioritised creating new jobs, strengthening Scotland’s education and skills and investing in innovation.
To specifically counter the effects of youth unemployment, the UK Government have launched the ‘Young Person’s Guarantee’. This scheme guarantees that every young person aged 18 to 24 a job offer, training or work experience. The Government estimate that 100,000 young people in the UK will benefit from the places straight away, with more to follow.
The Scottish Government has launched the ‘ScotAction’ skills support package, which promises assistance for training through apprenticeships and financial support for learning.
What does this all mean for our education?
Due to the lack of job opportunities out there, many more young people are applying to go to college or university, which is causing pressure on the amount of places available. Colleges in Scotland are turning away up to four times as many applicants as they did a year ago, while the Universities and Colleges Application Service (UCAS) has received a record number of applications for the fourth year running.
The Scottish Government have made more cash for extra college places available in the recent Budget, but this may take some time to take effect. As part of their ‘Supporting a Smarter Scotland’ package, the Government also announced an extra spend of £30million which they claim will boost up to 68% of students’ income next year, and give additional support to students that need childcare.
What has the SYP said about these issues in the past?
Over the last few years the SYP has called and campaigned for a number of actions which are related to the debate topics.
- “People should be paid equally for doing the same job. There should be an equal minimum wage for all, including those in training.” From ‘Our Scotland’, 2007
- “All places of education should have a well-trained and well-informed careers advisor. They must recognise that training, enterprise and employment are valid alternatives to university.” From ‘Our Scotland’
- The SYP made several recommendations in regards to where any additional money the Scottish Government has, including making more money available to students as bursaries rather than grants, so they have slightly more to spend and would have to pay back slightly less at the end of their course. We also recommended reviewing some of the things that are taken into account when deciding how much funding a student is entitled to. From SYP response to ‘Supporting a Smarter Scotland’, 2009
- “Entrepreneurship and enterprise opportunities should be encouraged and promoted through the provision of start-up funding and support geared directly at young people.” From ‘Our Scotland’
- “There should be a body that will regulate, oversee and promote young people’s employment including pensions, trade unions, rights and tax status.” From ‘Our Scotland’
- “There should be increased places on modern apprenticeships and government training schemes that reflect the skills gap in Scotland. It is important within this that opportunities are provided in traditional trades and crafts. Young people should be made aware of these opportunities and they should be widely accessible.” From ‘Our Scotland’
Where can I find out more?