Spotting the effect of the minimum wage

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  The first place we'd expect to see the effects on unemployment of a minimum wage that was too high is of course in the unemployment rate among teenagers and the young. For these are the people with little to no training, no job skills, and thus those that a minimum wage is going to be binding on. So, what do we see in the UK?

Centre-left think tank the Institute for Public Policy Research (IPPR) says that a full-blown economic recovery will not resolve the UK's youth unemployment problem.

Its latest report says despite steady falls in unemployment, there are still 868,000 out-of-work 16 to 24-year-olds.

Later on Wednesday, the latest official UK unemployment figures will be revealed.

They have been falling steadily for the last year. Gap

The IPPR highlights a striking mismatch between what young people are training for and the types of jobs available.

For example, it says, 94,000 people were trained in beauty and hair for just 18,000 jobs, while only 123,000 were trained in the construction and engineering sectors for an advertised 275,000 jobs.

The IPPR says youth unemployment is lower in countries where the vocational route into employment through formal education and training is as clear as the academic route.

It says this helps, as it puts the two on a higher perceived footing.

We're certainly willing to believe that more vocational training would be a good idea. We could have institutions of higher learning that specifically existed to teach people how to do real world jobs rather than providing a more theoretical education as at a university. Perhaps we could call them Polytechnics of Technical Schools?

But that the IPPR insists that even a full economic recovery will lead to there still being a large amount of teenage unemployment means that we really do have a minimum wage that is too high. Yes, even that special, lower, minimum wage for the young is too high: all we need as proof perfect of this contention is that statement that there will still be heavy youth unemployment even at the top of the economic cycle.

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