The scarring effect of unemployment and low pay

Thursday 23 January 2014

Young Women’s Trust is shocked by the evidence showing how periods of unemployment can ‘scar’ young people for the rest of their lives – meaning they end up stuck on low wages, with a high chance of falling into unemployment again.

On Monday, Rachel Reeves MP, Shadow Secretary of State for Work and Pensions, revealed Labour’s approach to benefits reform whilst the Government re-launched its mental health strategy. Labour’s focus on improving skills for people alternating between low paid jobs and benefits is welcome. But improving skills is only half the story.

What Reeves’ speech just briefly touched on is one of the most critical barriers to accessing employment – the high risk of mental health problems, particularly among the young unemployed. The Government’s announcement did acknowledge this in part, reflecting on the obstacles people with mental health problems face in getting or staying in jobs and promising to improve the links between mental health and employment support services.

But what both announcements fail to address is the huge impact that moving between low paid jobs and benefits can itself have on mental health.  A new campaign from Young Minds, also launched on Monday, shows clearly how having no work can make young people feel worthless, undervalued and that they have no future.

Our report, the Real Story, shows how for many young women poor skills are certainly a barrier to employment – in 2013 over a third of girls did not achieve 5 A*-C GCSE grades, including English and Maths. Last year alone that’s more than 100,000 young women without the qualifications needed to get into further education, training or even most jobs.

But our report also outlined the growing evidence that moving in and out of short term, low paid work – precisely the type of work that young women with poor qualifications are most likely to get – can have a significant and potentially permanent scarring effect.

No wonder that in our poll, over half of young women reported that they lack self-esteem.

At Young Women’s Trust we want all young women to be financially independent and emotionally resilient. These go hand in hand – so all policy approaches to tackling young unemployment cannot afford to ignore the circular relationship between low job prospects and poor mental health.