Starbuck's solves our youth unemployment problems

All our economic problems are over it seems.



The Prime Minister is hailing the news that global coffeehouse chain Starbucks has revealed plans to create up to 5,000 jobs over the next five years as it ramps up its drive-through business in the UK.

According to a statement from the Company,it wants to expand the number of drive-through branches in the UK from nine to 200 and around half of the drive-throughs will be operated under licence by petrol forecourt retailer Euro Garages, which mainly operates in the north of England.

Kris Engskov, managing director of Starbucks UK & Ireland, said the expansion plans would particularly benefit young jobseekers as half the chain's baristas are under 24 years old.

Downing Street has welcomed the announcement saying it was a "great boost to the British economy".

A good reaction from Diana Johnson MP on twitter to the news

The PM is celebrating 5,000 new Starbucks jobs. With all due respect, jobs paying just above Minimum Wage don't replace 3,000 lost at #BAE.

Mine's a grandee Latte

Sweaty palms at No 11 Downing Street

Faint hints of a U Turn at No 11.

Reading this morning's papers you might see the faint glimmer of hope that maybe the message is getting through that Plan A is not working.

First the Telegraph which tells us that Nick Clegg will be unveiling a £1billion scheme to pay half the wages of tens of thousands of unemployed teenagers in bid to tackle record number of young people out of work.

The scheme, says the Guardian, will subsidise 160,000 work places by providing £2,275 to any private-sector business willing to hire an unemployed 18- to 24-year-old.

The Independent which leads with news that a gloomy official forecast on jobs will be issued next week on the same day that the Chancellor delivers his Autumn Statement.

The paper says that the Office for Budget Responsibility to downgrade its previous prediction that public sector job cuts will be outweighed by a significant expansion in the private sector.

With the likely that capital projects are being rushed forward,it is possible that the coalition is finding that the bad medicin of unemployment to tackle debt eduction is simply not going to be palatble to the electorate for two long

Change minimum wage to tackle youth unemployment, employment law experts urge Osborne

Chancellor George Osborne should consider introducing a new band of minimum wage to help boost youth unemployment in the face of competition from older workers, claim employment law experts.

Following last week's figures on youth employment, law experts believe that George Osborne urgently needs to take drastic action to give younger workers a chance in the jobs market.

Peter Mooney, of business support company ELAS, said: “Since the Government scrapped the default retirement age, more and more workers are remaining in work beyond the age of 65.

“Until recently, they would have been retiring and freeing up jobs for younger people, while many businesses, particularly those with customer-facing roles, would rather employ more mature workers rather than take on and train young people.

“Current minimum wage regulations mean those under 21 do receive less than older workers, but between the ages of 21 and 24, there’s no incentive for businesses to hire young people – and there should be.”

As the law stands, anybody aged over 21 is entitled to be paid a minimum of £6.08 an hour. This drops to £4.98 for those aged between 18 and 20, and £3.68 for those aged 16-17. Apprentices under the age of 19, or aged 19 and in the first year of an apprenticeship, are entitled to £2.60 an hour.

Mr Mooney argues that a new, temporary band of minimum wage for those aged 21 to 24, set somewhere between £4.98 and £6.08, would encourage businesses to consider hiring those currently facing the greatest difficulty finding work.

He said: “Young people appear to be bearing the brunt of the economic slowdown and the fact that one in five young people are now out of work must be a sign to the Government that something needs to be done.

“Changing the minimum wage in this way would help small businesses and struggling retailers while also making young people that little bit more attractive when competing for jobs.”

Youth unemployment-A million reasons to get it right

With youth unemployment hitting the million mark today,this report Youth unemployment
A million reasons to act? is well worth a read.

The report from the Centre for Economic and Social Inclusion,calls for a subsidy focused on creating 75,000 new jobs for long-term unemployed,and putting young people on the Work Programme, at a cost of £150 million.

It shows that youth unemployment now is 25 per cent higher than it was at the same point after the 1990s recession and that long-term youth unemployment is rising more quickly than at any point since comparable records began.

260,000 young people have now been unemployed for more than 12 months.

In many cases, young people have responded to the downturn by staying in education but this says the report is just masking the problem.

Whilst they say that the Government’s focus on raising participation in education and reforming the vocational system is welcome,the effectiveness of skills and education reform critically depends on young people making the right decisions and understanding what employers need,which means that high quality careers services are critical.

It is not clear,say the authors that government plans to localise careers guidance with no measures of success will be sufficient. There is also a well documented gap on employability skills, with the CBI calling for more engagement between schools and businesses.

The report also recommends strengthening incentives for employers who offer apprenticeships to the unemployed and expanding the Apprenticeship Training Agency model, where apprentice providers can employ directly and place apprentices
with host employers.

The reasons behind youth unemployment

Over on the FT's blog today,Kiran Stacey tackles the question of why we have so such youth unemployment and what cab=n be done.

With figures on Wednesday likely to show unemployment among 16-24 year-olds is expected to top 1m people, its highest since records began in 1992,Kiran looks at the work of Prof John Van Reenen of the LSE’s Centre for Economic Performance who suggests a few possibilities.

1.Immigration and the question of whether young people's jobs have been taken especially by the influx from Eastern Europe to which he says no.

2.the fact that Labour shifted the emphisis of its new deal away from youth to single parents back in 2004 which may have been a reason for youth unemployment to start rising again.

3.The minimum wage was extended to cover 16-17 year olds but again he dismisses this

4.The fact that wages for qualified people have been rising too, more quickly in fact than those for relatively unskilled people. This would suggest there has been a boom in the demand for skilled workers, which might count against young people with less experience.

but most of all he claims there has been a shift in focus on the part of job centres from young people to lone parents and those claiming IB.

If that is the case, perhaps ministers should look a less at education and more at the benefits system for how to avoid creating a “lost generation”.