U.K. subsidizes youth workers to ease jobs drought

Employers will be offered 6-month subsidies of £2,275 for each young worker
By Tim Castle
|hrreporter.com|Last Updated: 11/30/2011

LONDON (Reuters) — The United Kingdom will spend up to £1 billion on employment subsidies and other support to help young people into work as youth unemployment hits record levels, said Deputy Prime Minister Nick Clegg.

More than one million young people aged 16 to 24 are out of work in Britain, official data showed last week, with companies holding back from hiring as the economy threatens to tip back into recession after barely growing over the past 12 months.

High levels of youth employment have been blamed in part for creating the conditions for the wave of inner-city riots and looting that erupted across England in August.

Employers will be offered six-month subsidies of £2,275 for each young worker they take on, enough to cover one-half of Britain's minimum wage for youth employees, Clegg said.

The program, spread over three years and starting next April, will provide 410,000 workplaces, including 160,000 wage subsidies and 250,000 work experience placements.

"Youth unemployment is an economic waste and a slow-burn social disaster. We can't afford to leave our young men and women on the scrap heap," Clegg said.

Employers groups who had been calling for wage subsidies welcomed the move.

"This is good news for young people ... It will encourage firms to take a gamble on a young inexperienced person and help tackle the scourge of youth unemployment," said John Cridland, head of the Confederation of British Industry.

Opposition Labour, ousted from power in May 2010, has accused the coalition government of driving up youth unemployment by sticking too rigidly to its deficit-cutting austerity programme.

But the government argues that unemployment among the young is a structural problem and has been rising since 2008 when Labour was still in power.

Officials said the £1 billion of funding would come from other areas of government spending and did not represent an expansion of overall expenditure. Media reports have said the money would come from a squeeze on welfare benefits.

Ministers are under pressure to find ways to revive the economy as the euro zone crisis threatens to send it into reverse gear.

The latest jobs measures come ahead of a statement next week from finance minister George Osborne detailing plans to stimulate growth while keeping to his tight spending plans.

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