Jobs growth brings decade-high employment rate for young people

women jobless 1

The proportion of young people in work in London is at its highest rate for nearly a decade.  Employment rates have been climbing steadily since the recession and annual figures from the ONS show that 457,000 16-24 year olds were in work in 2015.

Although London presents financial challenges for millennials who want to live and work here, the data from the Annual Population Survey reveals they are finding work at a better rate than at any time since 2006.

It has taken almost a decade for the employment rate of London’s young workforce to hit similar heights as 2006 when 47.4% of them had jobs. After a drop in youth employment rates following the financial crisis of 2008, the picture has gradually become brighter with 47.1% of the capital’s 16-24 year olds now working – a 3.8% increase from the previous year.

employment 16-24-2

The rate of increase for young women in particular has been higher with 5% more in jobs than 2014.

The steady increase in youth employment over the past six years may have contributed to a drop in the proportion of 16-24 year olds who are NEET status (not in employment, education or training).  In 2014, 5000 fewer young people were NEET throughout the capital compared to the previous year as the total number of youngsters with jobs increased by 17,400.  

At the end of 2015 London had the lowest proportion of England’s 16-24 year olds who were NEET at 9.4% 

The proportion of 16-24 year olds in work in the capital is below the national average of 53.5% but London has historically had a much higher rate of people of this age remaining in full-time education than other regions, keeping them out of the workforce.

Source data

See also

Mayoral Election Issues: The Economy and Jobs

Success of creative industries is good news for jobs growth in the capital

Over 750,000 jobs pay less than the living wage in the capital

 

 

Where are all the young people? The in-out flow of 20-something Londoners

concert hands in air-2Much is made of the exodus of young families from London but there is another significant group of London-leavers that may come as a bit of a surprise – those in their late teens and early 20s.

London may feel like a city for youth but data on population flows shows that those in their late teens and early 20s are the most likely to be leaving the capital.   And the biggest age group coming into the city is people in their late 20s and early 30s.

In 2011 there were 173,000 30 year-olds in London but only 92,000 16-year-olds. And data on internal migration flows in the UK shows that in 2014 the peak age for leaving the capital was 19-20 (the light red line in the chart below) and for moving in was 25-26 (the dark red line).

Youth pop flow

Much of this can be explained by the education and jobs cycle. A large number of people may be leaving London to go to university and an equally large number of young professional are coming to the city to work.

But longer term, the population age profile is skewing away from young adults. The population is due to grow by 1 million between 2011 and 2021 but in the same period the numbers aged 18-26 are forecast to drop by 65,000 and its 20-21 year olds where the fall is biggest – a 10% decline.

Youth pop forecast

Those arriving in the capital to pursue their career face the headache of finding somewhere affordable to live. In the boom years of the 90s this groups was twice as likely to buy their own home as they are now. In 1990 57% of 25-30 year-olds in the capital owned their own home. By last year it was down to 26%.

And the change for those in their early 20s is even more telling. A quarter of 16-24 year-old Londoners owned their own home in 1990. In 2014 it was just 6%. As our chart also shows, the only age group were the rate of property ownership is growing is the over 65s. For young people home ownership has collapsed.

Youth pop property

Those in their early 20s who stay in London and those in their late 20s who return, have one thing in common – increasingly they are living with mum and dad. Almost a quarter of those aged 20-34 were doing so last year. Back around the millennium it was just 17%.

Youth pop mum dad

Souce data

See also

Go east young man – it’s where young London lives

Under 40s locked out of housing market destined to be “generation rent”

How “Millennials” are driving an urban renaissance

How “Millennials” are driving an urban renaissance

listening to music on street-2Young, single, well-educated, well-paid professionals, part of the so-called Generation Y, are driving the resurgence in city centre populations across England and Wales. And while the growth in this group has been slower in London due to the struggle with property prices the heart of the capital has seen an increase by a third in people in their 20s over 10 years.

The growth of city centres is revealed in a study by the research institute the Centre for Cities that looked at 59 cities, including London. While the capital shares many of the findings for other large cities its economy and jobs market mean it has some unique characteristics

City centre residents tend to be better educated and more likely to be managers or senior professionals than those living in the suburbs or the commuter hinterland around a city. This is particularly the case in London. While 37% of city centre dwellers have a university degree in London it is 50%. And two thirds of London’s city centre residents are senior managers, compared to around half in other large cities.

The study says that the “urban renaissance” is being driven by people who want to live near to the amenities that city centre living offers such as being in walking distance to work, cultural attractions and surrounded by other young professionals. But they have to pay a premium to live there.

In the centre of London the high cost of property is acting as a block on the millennial generation. As a result, unlike other cities, it has a similar number of people in the 30-44 age bracket as 20-29. But it is the younger group that has seen the biggest growth.

London’s City Centre Population
Age 0-19 20-29 30-44 45-64 65+ Total
Population 2001 51,338 58,767 67,524 46,012 27,697 251,338
Population 2011 54,660 78,473 78,606 55,782 27,387 294,908
% Change 6.4 33.5 16.4 21.2 -1.1 17.3
cent city-2
Map courtesy of Centre for Cities

The study defined the city centre of London as the area within a 2-mile radius of Holborn and used the census data on small neighbourhoods within boroughs inside this area. (see map)

The study says that the high cost of property within this area has led to a spill over of young professionals into the surrounding suburbs in a way not seen in other cities.

Home ownership is lower in all city centres than suburban areas and the availabily of social housing in the defined area of central London makes social rental a common option.

Most city centre residents live in flats not houses. This is the case for 75% of people in city centres nationally, but 90% in London, according to the study.

London also has a higher proportion of residents born outside the UK than other cities, 45% compared to 35% elsewhere.

Car use, or the lack of it, is the other thing that sets London apart. Cars are used by fewer than a quarter of people for journeys to work in city centres but by only 8% of residents in the centre of London. London has greater use of public transport, bicycles and more Londoners walk to work.

See also

Urban chic or leafy charm? Inner city rentals catch up with affluent areas

More homes packed into built up inner city as growth stalls in outer areas

Jobs concentrated in just 5 of London’s 33 boroughs

Women harder hit by unemployment

hWomen in London are more likely to be unemployed than they are in the rest of the UK.  With men it is the other way round with the rate slightly below the national average.  Data for the demographics of unemployment produced by the Office for National Statistics show 7.1% of women in the capital out of work compared to 6.1% for the national average.  That’s a 21% difference.

Unemployment gender

The latest demographic breakdown in London employment data for the year to September 2014 shows that people from ethnic minorities are more than twice as likely to be jobless as white people.

Unemployment ethnicity

The rate for young people aged 16-24 is nearly 3 times the London average at 19.8%. For disabled people it is more than twice the London average at 13%.

Unemployment is static in London according to the latest general figures that show 287,000 out of work in the 3 months to February this year.    That’s 6.2% and unchanged on the rate for the 3 months ending in January.

London unemployment remains higher than the national average of 5.6%. That has been the long term trend but the gap has closed over the past 3 years.

Unemployment London v England

London’s 6.2% jobless rate is in line with Wales, the West Midlands, and Yorkshire and Humberside.  It’s the second highest rate in the UK.  Only North East England has a higher rate at 7.7%.  The lowest rate is South East England at 4.2%.

Source data