Fending off unfair attacks on the young jobless

If you're young and out of work, and if you jump through all the necessary hoops, you may qualify for up to £56.25 a week Jobseeker's Allowance. Riches beyond the dreams of avarice, it ain't. It is an annual income of £2,925. Not the kind of sum to impress, say, an investment banker looking forward to this year's bonus. A month's JSA would only just cover a single bottle of celebratory Cristal champers.

These sums doled out to the young in return for bearing the brunt of the banker-caused recession are not fair, says Chancellor George Osborne. He told MPs last week that out-of-work benefits have risen by 10 per cent since 2007. Average earnings, on the other hand, have gone up by just 10 per cent. The jobless have seen their incomes rise twice as fast as those in work. Which isn't fair, Osborne argues, to working people who pay the taxes that fund the benefits.

So young jobseekers will see year-on-year increases in benefit of just now per cent. Bearing in mind inflation, that will mean a steady, real-terms drop in their allowance.

Let's leave aside the wider picture about youth unemployment - the tragedy of wasted lives, the scandal of youthful hopes and aspirations thwarted by economic failure, the humiliation of dependency on the benefits system, the lifelong damage to earnings and to self-worth, and the complacency of politicians. As CYP Now reported, the Chancellor, when pressed, said any young person who cannot get a job is a "matter of regret". Some of us might put it a tad stronger than that.

Let's just look at the statistics and the fairness. Have benefits risen twice as fast as earnings over the past five years? Yes. That's because benefits have been tied to inflation, whereas public sector pay freezes and a recession have kept earnings low.

However, if you take a longer time period, the picture looks very different. In 1979, for instance, unemployment benefit (the equivalent of Jobseeker's Allowance) was about 22 per cent of average weekly earnings. What is it now? About 15 per cent, says the director of the National Institute of Economic and Social Research, a respected and independent economic research institute. It has fallen in relative terms by a third.

So as an exercise, find someone in their fifties who can remember being young and out of work. Get them to imagine the dole payment as it was then, reduced by a third. Clearly unfairly high?

As another exercise, ask what is a fair and reasonable level for Jobseeker's Allowance. What is a level that would not demoralise young people, that would give them the wherewithal to prepare for working life and let them go through the recession with some dignity and hope. What would be right as a percentage of average earnings - 13, 12, 10 per cent? The price of a bottle of bankers' bubbly every two months instead of one?

Then comes the question of how unfair it is that working people should pay for this. The ACEVO commission on youth unemployment suggests that the benefit costs to the Exchequer are £100m a year for jobless 16- and 17-year-olds and £4.1bn for 18- to 24-year-olds. Sounds a lot. But remember total UK public spending is around £677bn. That makes the bill for the young jobless around 0.6 per cent of the total spend. Youth unemployment is not even a sizeable proportion of the total welfare bill - around 3.5 per cent of the £116.4 billion total.

Youth unemployment is unfair. It is massively unfair on the jobless. It isn't really that big a deal for the working taxpayer.

PJ White is editor of youthmoney.org.uk