Attracting People is More Effective Than Punishing Them — Adam Smith Institute

Kingsley Amis’s remark regarding higher education—that more often leads to worse outcomes—holds true for governance as well. This sentiment is particularly relevant in the context of the current crisis of youth employment in the UK. Recent statistics reveal that nearly one million individuals aged 16 to 24 are not engaged in work or education, with the number of young people classified as NEETs—Not in Employment, Education, or Training—climbing to 946,000 by September. This figure, reported by the Office for National Statistics (ONS), represents the highest level of youth worklessness since 2014, marking an increase of 9% from the previous year, and revealing a staggering rise of almost 25% since the onset of the pandemic. This crisis signals a pressing need for both a reevaluation of governmental policy and a potential reimagining of the support structures meant to counter youth unemployment.

The recent spike in youth unemployment has been exacerbated by government policies that have, in effect, increased the cost of employing young people. Notably, the significant hike in the youth minimum wage, combined with increased employer taxes associated with youth employment, has created barriers for businesses looking to hire younger workers. Additionally, changes made to the apprenticeship system, which some perceive as a form of nationalization, have also led to a decrease in available apprenticeships. This environment reflects an ongoing struggle within industrial policy that aims to impose strict conditions on employers rather than supporting them in creating opportunities for young job seekers.

Critics of the current reactive policies propose a paradigm shift in how to address the rising youth unemployment crisis. Instead of further burdening employers with regulations and taxes—assumedly to rectify the problems created by prior governmental interventions—an alternative approach could be to reimagine the opportunities and frameworks available for youth employment. For instance, eliminating the minimum wage for young workers could open avenues for informal apprenticeships and unique training experiences, allowing age-discriminating entry-level job opportunities. The logic behind such a radical proposal suggests that allowing flexibility and creativity in employment would encourage businesses to take more risks in hiring young workers.

The idea of adjusting the policies surrounding youth employment raises larger questions about the effectiveness of existing governance—specifically, whether current measures are counterproductive. The premise becomes: rather than expecting government to provide additional solutions to problems it has contributed to, perhaps the focus should shift to mitigating government action that is causing those issues. This stance invites a reconsideration of broader government policies beyond youth unemployment, potentially examining how various policies intersect to create barriers for young people entering the workforce.

While some might interpret calls for reducing governmental intervention as advocacy for a minimal state or even anarcho-capitalism, it is crucial to emphasize the potential benefits of a less intrusive government approach. The conversation around youth unemployment illustrates a critical tension between necessary regulation and the burdens those regulations impose on employers. Striking a balance in favor of creating an environment conducive to hiring young workers may demand fewer restrictions and more incentives for employers willing to take risks on less experienced talent.

In conclusion, the current landscape of youth unemployment highlights a pressing crisis that merits comprehensive re-examination of government policies. Rather than implementing more stringent regulations and increasing employer burdens, a paradigm shift toward reducing oversight and creating more inclusive frameworks for youthful employment may yield the desired results. By facilitating a more favorable environment for young job seekers, the government can address the alarming rise in NEETs effectively and foster a youth-oriented labor market that thrives in the long run. The fundamental lesson drawn from this analysis is that pulling back on excessive government intervention could indeed unlock pathways to employment that would otherwise remain sealed.