The life chances of young people in Scotland: report to the First Minister

Section 2 - Transitions, The Labour Market And Pay

Analysis has found that young people today struggle in the labour market in spite of being the most highly educated generation in history. Unemployment is generally higher among young people than prime age adults, and those who do work tend to have poorer-quality jobs and are much more likely to be on temporary contracts or to earn lower wages than older workers.^[15] In the light of this, some may wonder if these are issues faced because of the life stage of young people, and therefore something to be expected. However, there is evidence to suggest that what is happening is a structural level change, where those people who are young today are experiencing exclusion from the labour market in a way that is new to the current generation.^[16] What we are seeing is new, intergenerational inequality. UK level analysis by the IFS shows that those born in the 1980s are the first post-war cohort to start their working lives earning no more than the previous generation.^[17]

In the following section, I describe some of the challenges, and some possible strategies to ease young people's transitions into work. In particular, this section of the report makes recommendations on four inter-related issues relating to employment - skills development and transitions from school; access to the labour market; low quality employment; and place and travel - with a particular focus on disadvantaged young people.

Skills Development And Transitions

Skills development, and transitions from school into work, training or further education, are key elements in a successful young adulthood, particularly for those not planning to go to university. The evidence review suggests that young people from the most deprived areas are less likely to experience successful transitions than their more advantaged peers - in terms of staying on at school, attainment and employment. They are more likely to experience multiple post-school transitions, to be unemployed when they leave school, or to move onto a training programme that is short-term. Of these young people, those who leave school at the earliest opportunity are at particular risk.^[18] More broadly, concerns have been raised about whether the skills system in Scotland is sufficiently well matched to current and future labour market demand, raising questions about the prospects for social mobility going forward.^[19]

The evidence review highlights that other forms of disadvantage also have an impact on young people's transitions.^[20] Disabled young people have a substantially lower rate of participation in education, training or employment than those who are not disabled. They are also more likely to be offered a more limited range of education and training opportunities than other young people, often with inaccurate assumptions made about capabilities. Young carers, too, can experience difficulties balancing post-school education or employment with caring responsibilities. A report by the Children's Commissioner found that young carers enjoy school more, but more excessive hours of caring affects mental wellbeing, which may impact on school performance.^[21] Hence, either being disabled or caring for a disabled family member can have a serious impact on future prospects. Young people leaving the care system are also at a disadvantage: looked after children tend to leave school at younger ages, and obtain lower qualification levels on average, compared with all school leavers. They are subsequently less likely to go on to, or sustain, positive destinations after school.

By contrast, minority ethnic young people have a higher rate of participation in education, training and employment than the national average. They are also more likely to continue in education, particularly higher education, than their white counterparts, and less likely to pursue work-based vocational training. However, minority ethnic groups are disadvantaged in terms of access to high earning jobs. A partial explanation suggests that for some young people from minority ethnic groups, lack of wider contacts outside their immediate family and friends can limit career choices.^[22]

There are a range of issues here - and what follows is a set of four recommendations on improving transitions and building skills.

Problem: Young people think there is a lack of high quality, easy-to-find advice to help them manage the transition into adult life.

The research literature underlines that having clear, and stretching aspirations is important in shaping young people's post-school transitions.^[23] So, high quality transitions advice - about work, study, or apprenticeships - at key stages in secondary school and beyond is vital. Research suggests that children of highly educated parents tend to have access to positive learning resources, role models, occupational knowledge and informal networks.^[24] This heavily shapes their educational decisions post-16. Young people from more disadvantaged backgrounds, who are less prepared or supported to make 'good decisions' about post-16 options, are more likely to do poorly in their transitions.

One of the recurring themes about transitions from the young people we spoke to was the quality of the advice available to them.

Here's what young people said:

"Kids are just pushed into going to university - even if it is not your first choice - it's the easy choice for the school. My friend wants an apprenticeship and the careers advisor just sent him a link - a do it yourself attitude. However, if you are going to university you get all the support you need, especially around filling out your UCAS form. But no-one helps you fill out a complicated form for a job or for an apprenticeship."

"You only get to see [your careers adviser] if you are leaving school. Surely we should have engagement with careers advisors throughout our time in high school - they don't even ask you how you got on at your work experience."

"Scottish Government needs to invest in lots of properly qualified careers advisors - advisors that can actually advise on what to do next. They need to have an awareness of what jobs, training and other opportunities are out there - at the minute if you are not going to university they give you a quiz. How on earth does that inform you on your career choices? This should be stopped immediately and proper advice should be given to you throughout your time in high school."

"If there was a young person's Citizen's Advice Bureau it would really benefit ALL young people."

"I don't feel like apprenticeships are encouraged to all young people - careers advisors don't encourage these like they do university."

The most common complaint I heard from young people was "no one advised me on what to do as a job"; or if they did get some advice, it was poor quality. Provision seemed very patchy indeed. Issues raised in the next section, on housing, also reflected difficulty in accessing advice. The challenge is two-fold:

First, the Curriculum for Excellence (CfE) is meant to instil in young people in schools a sense of resilience, to equip them with the skills to work out for themselves, with appropriate support, what it is they want to do. CfE is meant to help young people become confident learners, confident about their own choices in life. If this aspect of CfE is not working as it should, it would be helpful to revisit it.

Second, the right information (e.g. on careers, study, housing, financial inclusion, mental health) needs to be readily available, so it can be accessed when it's needed. Even if CfE is working well, young people are still struggling in some cases to find the information and advice they need. Therefore, my first recommendation focuses on helping young people get the right advice, at the right time, in the right way.

High quality advice is particularly important for groups who face additional barriers. Young people's choices of career are shaped by advice or role-modelling from family, friends and teachers. Norms and expectations relating to, for example, gender and ethnicity within these social networks will also impact on work and other choices.

Careers advice services should be designed to pro-actively challenge stereotypes, and encourage young people into training and jobs linked to better pay and prospects, and in line with their abilities. This should include both vocational and academic learning and training opportunities, as well as up-to-date information on the earning and progression prospects associated with different careers. Some young people - for example, those with disabilities, carers, parents, and care leavers - will need additional support to consider what roles would best suit their abilities, aspirations and constraints, and to access and apply for these. An enhanced offer of provision and support for young people with additional barriers is needed.

Recommendation 1 - Develop new advice provision for young people, supported by a skilled, trained workforce

A key challenge is to provide young people with clear, accessible, and accurate advice on a range of issues at the right time. Subject choice that can open and close career options comes very early (e.g. at around age 13). Housing help is needed later; mental health support may be needed at any stage. The ability to access advice and support on a range of issues including further study, employment, housing, financial support and mental health support is particularly important for groups of young people with additional barriers. Understanding entitlement to benefits and grants in relation to disability and caring responsibilities (for example to help with further study), and understanding how to access housing appropriate to needs for young parents, those with a disability or care leavers, are key to helping young people make informed choices. I understand work is already underway through the 15-24 Learner Journey Review which will bring together the digital services that young people can access to make more informed learning and career choices. This work will align advice and support for those seeking further study and employment with financial support. In future it could also include information on housing and health support. Aligning services and providers would improve identification of and support for young adults with additional support needs (including disability, care leavers and parents/carers) in further and higher education and support for those with additional barriers.

It is important to consider whether online information may be less suitable for some groups of young people. Information, advice and guidance for more vulnerable young people is most effectively provided by combining online and face-to-face services. Skills Development Scotland's model of delivering services to young people based on their need and circumstance through a 'blended service' which combines on-line information and support with face-to-face guidance is a model that could be built on.

One of the ideas that came out of my discussions with stakeholders was a 'Young People's Citizens Advice Service'. Setting up a whole new face-to-face service would be prohibitively expensive, and add a layer of provision that might still be inaccessible for some young people. However, aligning the existing information, advice and guidance sources and professionals in the way described above would be a sustainable way to deliver the solution suggested by some young people and those who work with them.

However, simply making a comprehensive website available online isn't enough on its own. All adults who are in regular contact with young people - teachers, careers advisors, youth workers, voluntary organization staff, college and FE staff - would need to receive training in its use so that what we are actually offering is a combination of web-based and face to face support. Training would also need to improve awareness of the specific issues disadvantaged groups face, in particular around transition planning and careers advice.

In this way, we could make good use of the existing workforce and expand their access to whatever relevant information was needed at a particular time. Young people would of course be free to seek any information themselves, but could also ask for help in accessing it and discussing the relevant need with an adult with whom a relationship already existed. We need to combine the idea of 'one-stop-shop' with any number of entry doors.

Problem: Positive destinations data suggests a generally positive picture of outcomes for young people, but our understanding of what happens to disadvantaged young people during the transition period could be much stronger.

It would be very helpful to know more about what happens to all young people who have made the transition to a 'positive destination'. While data on post-school transitions in Scotland gives a good overall picture of what young people are doing in the first years after they leave school,^[25] we know less about the quality of destinations, and the experiences and difficulties young people have in plotting a route from school to employment. For instance, we know how many disadvantaged young people go on to study at college but we know less about the quality of the different courses studied and how these lead to more or less positive labour market outcomes.

I am aware that Skills Development Scotland and the Scottish Government have already established a national information sharing framework between public sector partners, underpinned by legislation, which allows the sharing of real time administrative information to better identify, track and monitor all 16-25 year olds in Scotland. The system is aimed at driving early intervention with young people who are not in education, employment and training. The information that is shared will over time improve understandings of what learning and training young people participate in before they begin their career.

RECOMMENDATION 2 - Continue work to improve data collection and sharing to track post school participation in learning, training and work for young people and make better use of that information to improve service delivery and develop Scottish Government policy

The Scottish Government should continue to move the focus away from the term 'positive destinations', which has the potential to mask difficulties some young people face after their first transition from school and make it harder to direct help in the right way. Skills Development Scotland have developed the Annual Participation Measure, which aims to identify the status of the whole 16-19 cohort rather than just the initial transition from school. The Scottish Government defines 'Participating' as when a young person is 'actively engaged with an organisation for the purpose of learning, training or work'. This change in language helps consider a young person's status within the context of their journey rather than as a destination.

However, there is still a need for a more fine-grained understanding of the quality of destinations. New analytical work on the emerging data set to understand young people's movement between different statuses over time and the services they received to do so will be very valuable. This will help establish if certain interventions in or after school are effective in narrowing the gap in job opportunities and income between disadvantaged young people and their peers. I have been told that discussions are underway between the Scottish Government and Her Majesty's Revenue and Customs to incorporate their information within the existing framework. This should contribute to a better understanding of longer term employment outcomes. Public sector partners should make better use of the available information to provide support to all young people and especially those who face barriers. The Scottish Government should make more effective use of the emerging data set to drive policy development and improve the life chances of young people in Scotland.

Problem: The skills system in Scotland is not well matched to current or future labour market demand. Engagement between employers, learners and skills providers could be improved.

The Institute for Public Policy Research Scotland has argued that the skills system in Scotland is not well matched to current or future labour market demand, suggesting this is due to inadequate engagement between employers, learners and skills providers. ^[26] To respond to this challenge, schools are developing and strengthening links with employers to make transitions into work as smooth as possible but also, crucially, to make sure skills gaps are recognised early and can be plugged by schools. But are both parties doing enough and are the structures in place to support them?

Other issues with the skills system raised by key stakeholders include: inefficiencies between different parts of the skills system, with administrative barriers affecting learner choice; a lack of clarity in relation to individual learning routes within the system, which can make it difficult for learners to understand the opportunities that are available to them; and employers are not always able to engage with the system in the most beneficial way.^[27]

Here's what young people said:

"You need to get industry advisors in schools to advise kids on careers."

"Schools should invite lots of industry people in to talk to pupils from first year before you make your choices, even mums and dads could come in and tell you about their jobs."

Recommendation 3 - Do more to enhance the effectiveness of the work of the Developing the Young Workforce regional groups in building systematic engagement between local employers and schools and colleges on local and regional skills shortages

I have been told that the Developing Scotland's Young Workforce ( DYW) programme is taking action in this area. The DYW Regional Group Network has been set up, meaning that there is a formal structure in place to ensure local employers work with local schools and colleges to ensure courses are appropriate to local employment opportunities. However, the Regional Groups are at different stages of development and so far, progress seems slow.

On various visits, I came across some impressive work on linking employers to schools. A Head Teacher in Dundee had worked extremely hard to make sure his pupils had high quality work experience at Michelin. For such excellent relationships to work, schools must ensure there is sufficient time and commitment within the senior leadership team: both employers and schools have to work at it. Standard Life is doing great things as an employer: participating in the Edinburgh Guarantee Scheme and offering a six month paid work experience programme for school leavers. They also run a Carer's Network, supporting staff with caring responsibilities. It is likely that these initiatives are supported by the DYW regional groups, but they are not branded, which makes it harder to identify systematic rather than ad hoc relationships. It is also vital that local employers in the public sector are included in regional groupings. In many areas they are the largest employer.

One final point here is that in most areas a significant proportion of young people will not be aiming for a degree on leaving school. These young people should get comparable care and attention to their futures that is regularly devoted to more academic young people.

Problem: There is a perception, rightly or wrongly, that the non-academic route post-school is a second-rate route.

Here's what young people said:

"In my school, it was the elite group that went to university. They got all the teachers' time and attention - they didn't care about the rest of us"

"There is a stigma in school if you are not going to university. What if you don't want to go? Schools should do better."

"There is no support in school at all if you are not going to university"

"Everyone goes through the school system - it needs to work for all of us. Every single young person is different - it really isn't rocket science. Schools need to learn to expand young people's horizons - they still put us in a box."

The potential for the college sector to reduce socio-economic inequality has been under-explored as an issue. This leads to my first recommendation on ensuring and enhancing the quality of the college sector. A successful modern economy needs to value learning and skills across the economy. We want to get away from the perception - rightly or wrongly - that 'the only thing we value is the academic route'. The Scottish Government's widening access work is crucial in ensuring that young people from poorer backgrounds can access the same opportunities as their more affluent peers. But it is also important that other routes are valued, both in terms of funding, but also in terms of public attitudes toward less academic career routes.

Recommendation 4 - Do more to value non-academic learning routes, post-school

Audit Scotland reported that the Scottish Government provided £548 million in funding to the college sector in 2014/15.^[28] Scottish Government funding to the college sector (resource and capital) has reduced by 18 per cent in real terms between 2010/11 and 2014/15. In contrast, overall Scottish Funding Council funding to universities reduced by 4% in real terms, while Scottish Government funding for university student support increased by approximately 37% in real terms over the same period.^[29] I am not arguing that pound for pound spending on students from FE and HE should be the same. Obviously some courses are much more expensive to deliver than others. But the overall picture seems to suggest that the university sector has had greater protection from hard financial times than the FE sector. It is worth noting, however, that between 2014/15 and 2017/18, Scottish Government funding to the college sector increased from £548m to £598m, a real terms increase of 5% - this is a step in the right direction.

Funding isn't the whole story. This recommendation is also concerned with the culture of schools and wider society. Disadvantaged young people told me that their experience is that the best teachers work with the most able students, while they get little support and advice on future choices. Ensuring that young people from poorer backgrounds get a fair chance at university education is vitally important, but it may have had some unintended impact. The pressure schools are under to get more students from disadvantaged backgrounds into university has left some young people, less suited for higher academic study, feeling devalued and under pressure themselves. According to the latest international HBSC study, Scotland was the only country in which boys from lower income families had higher school work pressure than their more affluent peers.^[30] While parity of esteem between academic and non-academic routes is unlikely, given traditional pay differentials, more could be done to value work experience routes, and apprenticeships at all levels, sending a clear message that the economy needs a wide range of skills and capabilities.

The cultural differences between the two sectors are reflected in other ways too. For example, college and university students are not treated equally in terms of conditions. Bursary awards for college courses come with strict conditions including 100% attendance, which do not apply to university students. While college students are allowed periods of authorised absence e.g. self-certificated absence because of illness, exam preparation and unexpected caring responsibilities, the differences in conditionality are difficult to justify when thinking about post-school education as one coherent, consistent service.

There are no quick fixes for cultural change. One way to make a start would be an advertising campaign that emphasised the opportunities of apprenticeships at all levels. This could help to begin shifting attitudes and making those who choose non-university routes feel more valued. These messages can be built into the national campaign about Developing the Young Workforce that Scottish Government is planning for the Year of Young People in 2018. This presents a great opportunity to offer a positive picture of diverse career routes.

Problem: The FE and HE systems don't make allowances for the different development rates of young people.

This is a real problem - boys mature at very different rates from each other (as well as in comparison with girls); and young people from care backgrounds can take longer to reach their full potential. But it's a relatively easy one to fix, with a bit of determination. I met some impressive people at North East College. They have a system where young people can sign up for particular vocational courses and, depending on how they perform in first two years, they can then transfer to Aberdeen University in year three and get a degree. This kind of more fluid or flexible system - where young people can start on a vocational route but move to an academic one - has real advantages. A broader offer like this - giving young people who develop later more scope to switch routes - would be very helpful, especially for young people from poorer backgrounds.

Recommendation 5 - The Scottish Government should, through the 15-24 Learner Journey Review, ensure our FE and HE systems have more flex built in so young people can shift between routes

The FE and HE sectors need to be more integrated and to work more closely with one another to provide a clear and consistent offer to young people. I recognise that there is already some flexibility built into state support systems, for example the Scottish Funding Council ( SFC) supports articulation places between college and university and the Students Award Agency for Scotland ( SAAS) enable fully funded repeat years of study and extended eligibility for student support. Approaches such as that of Northeast College described above are being taken forward through the 15-24 Learner Journey Review, which supports the implementation of the Enterprise and Skills review.

But there is a question for me about whether this is moving far enough or fast enough. There's a real challenge for universities to be making more of these types of offers and to ensure they apply to a variety of courses. There is a challenge for schools too - if schools are to deliver a system which genuinely has the needs of children at its heart, they need to encourage more diversity of routes to successful destinations.

In practical terms, this approach could also be cost saving, both because it avoids students repeating the first two years of a degree course at university, and the cost to the individual in terms of supporting themselves, but also because the first two years at college are considerably less expensive to the state (and are likely to remain so) than the first two years on a university degree course.

Access To The Labour Market

Unemployment rates^[31] for young people in Scotland are consistently higher than those for other age groups. Additionally, the 2008 recession had a particular impact on young people: for example, youth unemployment rates spiked after 2008, while employment rates for people aged 50-64 increased through the recovery. Just under 1 in 10 (9%) 16-24 year olds in Scotland were unemployed over the year to March 2017.^[32] For a significant minority of young people, labour market entry and labour market progression are major challenges.

Here's what young people said:

"Young people are discriminated against when trying to get a job because of their age."

"I don't have enough experience - how do I get proper work experience? I need this to get a job."

"Can the Government not do something to create 'start-up jobs'?

"Gaining employment is a lot more difficult for this generation - even if you have a degree".

"I have applied for loads of jobs - some ask you to fill out an application form, some ask you to do a personality test, some ask you to do a video. How can we not just get a chance and meet the employer face to face?"

Some groups of young people face additional barriers to the labour market.^[33] Compared with all young people, those who are disabled have higher rates of unemployment. Additionally, even when other factors such as qualification levels are taken into account, analysis finds that disabled adults are more likely to be unemployed or economically inactive than non-disabled adults. Research suggests that a lack of practical support for disabled young people underpins difficulties with labour market transitions.^[34]

Despite generally higher levels of educational attainment, unemployment rates for minority ethnic adults are significantly higher than for white Scottish people. Research finds that people from minority ethnic communities with good qualifications face greater barriers to finding work which matches their qualifications, compared with the majority white population. Qualitative research has consistently highlighted the role of discrimination, whether direct or indirect, in limiting minority ethnic access to employment opportunities, education and other services.^[35]

Gender also affects access to the labour market. The unemployment rate for young men is higher than for young women, while inactivity rates are much higher for young women. While young women are more likely to continue in full-time education, especially higher education, than young men, those who leave school early with poor qualifications are likely to face worse labour market outcomes than young men with similar characteristics.^[36] This is often related to caring responsibilities, and particularly early pregnancy and motherhood.

There is a considerable body of evidence to suggest that being unemployed when young leads to a higher likelihood of long-term 'scarring' in later life in terms of pay, high unemployment, fewer life chances and poorer health. These effects seem to be stronger for younger people and those with less school success. The research shows that 'scarring' can also be caused by periods of poor quality and precarious work when young. The exclusion of some groups of the population from the labour market is likely to lead to increasing inequality, with implications for future income, wealth and health.^[37]

Problem: The changing labour market may be further disadvantaging those with low skills, and for some groups even good qualifications aren't enough.

The evidence review raised a concern that labour market changes are leading to a growing divide between those with and without skills. On average, young adults today will have higher qualifications than previous generations. But there is a risk that those with low or no qualifications will be more disadvantaged than in previous generations as the demand for skills increases. The penalty attached to having no qualifications has also grown over time.^[38] Increasing numbers of better qualified young people are often taking up job opportunities for which such qualifications are unnecessary. This has a knock-on effect of taking jobs that less qualified young people are capable of doing, but are unable to secure the posts.

Following the publication of my first report in January 2016, the Scottish Government's Fairer Scotland Action Plan committed to work with Timewise and Family Friendly Working Scotland to do more to promote flexible working and to consider issues such as flexible hiring and job design.^[39] Timewise's Scottish Flexible Jobs Index, which is to be published shortly, is very likely to show a continuing problem with Scottish quality jobs not being advertised on a flexible hire basis.^[40] This means that lower paid jobs, which tend to be more flexible, are more attractive to those who are over-qualified for them. Furthermore, the recruitment processes for some jobs require higher level skills than the jobs themselves.

Recommendation 6 - Employers need to think about 'job design' and recruitment processes that are free from bias and that match requirements for the job with the skill level needed to make applications

Employers could benefit from more thoughtful job design and recruitment. It makes no economic sense to encourage highly qualified people, who have been educated at great expense, to fill vacancies that less qualified candidates could take. We are underutilising skills as well as taking jobs away from people with fewer qualifications who could benefit from employment.

Issues relating to flexible working and recruitment processes are particularly important when considering young people with additional barriers. For example, the issue of recruitment processes requiring higher level skills particularly affects young people with learning difficulties, who are well suited to some kinds of paid work, but are less able to apply for them. Discrimination related to gender and ethnicity may also be shaped by recruitment practices. Flexible working arrangements are especially important for young parents and carers. Employers have an important role to play in supporting non-traditional candidates.

This could include considering how they can improve aspects of their recruitment practices. These might include: ensuring that vacancies and opportunities for training and progression are always advertised via open recruitment rather than word of mouth; and reviewing their selection and recruitment practices to ensure that they reflect best practice and disregard personal characteristics that are not essential to the job. As noted earlier, disadvantaged young people may lack access to wider social networks and role models that can provide employment opportunities or information about roles and the workplace. Providing mentoring to help negotiate the workplace and job coaching could help in work progression in under-represented groups.

Problem: Accessing the labour market can now sometimes mean work for no pay.

A complaint from talented young people across the UK is that they have to do two or three unpaid internships before they get a paying job. The Sutton Trust estimated in 2014 that there were around 22,000 unpaid interns in the UK. The available evidence suggests this is particularly an issue in competitive industries such as cultural and creative, media-related, and financial and professional services industries. Access to some graduate jobs (e.g. investment banks and law firms) was often reliant on specific experience with a given company, making unpaid internships a concern for social mobility.^[41]

Recommendation 7 - All post-school internships should be advertised and every post-school intern should get paid

Unpaid internships are clearly unfair to young people from less advantaged families who cannot afford to work without pay - the Sutton Trust estimated the total cost for a six month unpaid internship in Manchester as £5,078 in 2014 (including transport costs).^[42] Moreover, many internships are secured by word of mouth, reinforcing inequality of opportunity for those who don't have regular social contact with the kind of people who can offer internships. The Liberal Democrats, when part of the UK Coalition Government, tried to take action on this and it is regretful that the Coalition did not follow this up with more concrete proposals.

The Scottish Government doesn't have the power to legislate on this, but perhaps this is something the Fair Work Convention could consider responding to: internships should be open to all, and advertised. Young people who get such placements when they leave school should be paid for all the work they do. They should not be seen as free labour for the benefit of any employer.

The Scottish Government should set a strong example in this regard and ensure that they embody the fair work practices that every employer should follow. Alongside all government internships being paid and advertised, specific consideration should be given as to how these can reach marginalised groups, utilising key partners such as BEMIS and Inclusion Scotland to actively promote the opportunities to under-represented groups and help the Government to become more representative of the communities they serve.

Job Quality And Pay

The following three recommendations are mainly within the power of the UK Government, as they concern policy areas that are not yet devolved. Yet they all have major impact on young people in Scotland and are issues I believe should be raised by Scottish Ministers with the Secretary of State for Work and Pensions and the ministerial team at the Department for Work and Pensions ( DWP).

Labour market changes have been identified as an underlying driver of inequality, including globalisation, leading to skilled jobs being transferred to other countries and technological change, which has led to the automation of production systems. The labour market is becoming increasingly split between high level occupations and lower skilled jobs, with fewer jobs in the middle range. While the Scottish employment rate has recovered since the recession, there has also been a growth in part-time jobs, and increases in self-employment, insecure working, and under-employment.^[43] Young people are particularly likely to be in low quality employment compared to older age groups and to past generations.^[44]

Problem: Young people need help getting into good jobs but the support is patchy.

In particular, a regular feature of my engagement with young people has been the poor quality of support from Jobcentre Plus.

Many young people spoke of being encouraged to take 'any job'; despite limited stability, low pay and not being within interest areas or skill sets. Training programmes are frequently aimed at sectors such as retail and hospitality, in entry level roles that offer limited progression and development opportunities. Often those young people who receive support from Jobcentre Plus are the most disadvantaged, in many cases facing numerous complex barriers to employment. Engagement with this service is particularly difficult to navigate for those with no fixed abode or living in homeless accommodation. It appears that a lack of mutual trust and a strict conditionality regime leads to many young people not successfully engaging in the service and being pushed further from support.

This must been seen in the wider context; some of the young people I engaged with were positive about their experience and spoke of their work coaches being encouraging and supportive. However, this is not the experience of all young people - and it should be.

Here's what young people said:

"The jobcentre is not young person friendly."

"Young people should have access to outstanding support services to help them gain a fulfilling job."

"I never used the jobcentre […]. I needed more support than they could give. The jobcentre is for older people anyway and the advisors look down [their] nose at you and judge you for being young."

"I do everything over the phone so I don't need to speak to them face to face. They also get you in trouble for being late, even if it is the bus or something out with your control. They also give you stupid jobs to go to interview for that are unsuitable - just to get you off their books. They've told me it is all about stats - typical government."

Recommendation 8 - Raise concerns with DWP about the quality of support offered to young people in Jobcentre Plus

I recognise that Jobcentre Plus is managed by the UK Government. However, the Scottish Government should raise concerns with DWP about the service, as it is a vital one for addressing inequalities in young adulthood. Sanctions are a particular problem. Official statistics suggest that young people are disproportionately affected by the DWP sanctions regime: as of December 2016, people under the age of 25 made up 39% of the Universal Credit caseload that was able to receive a sanction; but the same group received 53% of all sanctions in the same month. While I understand that young people are perhaps most likely to face difficulties looking for work, the approach to sanctions risk damaging the relationship young people have with Jobcentre Plus. Even the threat of sanctions has negative consequences for both young people and Jobcentre Plus, because it undermines mutual trust. To work effectively, Jobcentre Plus needs to be seen as a positive player and an enabler, not as a gatekeeper. A system based on trust, dignity and respect would be - in my view - mutually beneficial.

A devolved employment service could capitalise on links to community led support, which is proven to be successful, and ensure strong links to careers advice and development through Skills Development Scotland. A focus beyond initial employment transitions is important to drive young people to fulfil their potential and to attain high quality and meaningful employment.

Problem: Many young people are starting their working lives in poor quality jobs.

The proportion of young adults working part-time has increased. At the UK level, young people made up around a third of all people on zero hour contracts. While it is difficult to untangle the levels of voluntary part time/flexible working, high underemployment rates for young adults suggest that experiences of part time and zero hours contracts may be by necessity rather than choice.^[45] An increase in 'churning' or cycling between low paid, short term work and unemployment has also been identified as a problem in the research literature.^[46] And less advantaged young people, especially those with lower levels of educational attainment, are more likely to experience this movement in and out of the labour market.

Here's what young people said:

"I'm in a low paid job, with a zero hour contract. I can't phone in sick or my employer thinks I'm putting one over on them."

"I had a temporary contract at Christmas, I was told I would get kept on but they never did - they let me go. I have lots of short term jobs on my CV: does this look like I can't keep a job down?"

"Because of my exams, I couldn't do overtime so my employer sacked me."

Recommendation 9 - Lobby the UK Government about exploitative zero hour contracts

As mentioned above, a disproportionate number of zero hours contracts go to young people. Not only are they legally paid a lower rate than those over twenty-five, insufficient hours along with irregularity of work schedules makes earning enough to live independently virtually impossible. Again, the Scottish Government cannot make such contracts illegal, but they can ensure that such contracts are not used in all the contracted out work within the public sector, and it can discourage employers from such unfair practices.

Problem: Many young people are on low pay.

Here's what young people said:

"All young people aged between 18-24 years old should receive the National Living Wage."

Just over half of 18-24 year olds (53%) earned less than the Real Living Wage compared to 20% of all adults in 2016.^[47] The proportion of under 30s in low pay in the UK has continued to increase while the level has fallen among older workers. ^[48] Low pay and labour market insecurity are related to occupation and sector. Young adults are overrepresented in low wage sectors such as retail and food services.^[49] These sectors rarely offer career progression.

Recommendation 10 - Lobby the UK Government on the need for the National Living Wage to apply to all those over 18 years old

The 'National Living Wage' introduced by the UK Government in 2016 is set at a lower wage than the Living Wage and only applies automatically to staff over 25 years of age - for younger people, the minimum pay is set at a lower level.^[50] Young adults are also entitled to lower payments and less support in the UK welfare system than older adults, and their entitlement is often complex and difficult to understand. This is based on the assumption that young adults are more likely to live with, and be supported by, their parents. However, some young adults may not have this avenue of support, particularly those from disadvantaged backgrounds.

The evidence strongly suggests that young people have lost out over recent decades in welfare, tax and spend policies at UK level. I advise Scottish Ministers to write to the UK Secretary of State for Work and Pensions to suggest that the national living wage should be extended to younger people.

Place, Travel And Work

Problem: Local labour markets for disadvantaged young people may have a limited supply of quality jobs and expensive transport to get to good jobs.

In the introduction to this report, I mentioned that travel-to-work patterns show that disadvantaged people are less mobile and more reliant on public transport. In both urban and rural areas, lower qualified and unemployed people tend to have least flexibility in where they look for jobs. For young jobseekers living in a deprived neighbourhood, cut-off from strong labour markets, job opportunities may be limited. Qualitative research found that these young people's 'mental maps' were focused on the immediate local area and they displayed an inward looking mentality, focusing more on the short-term and areas closer to home.^[51] This is reinforced by the weakness of the local labour market, which results in reduced expectations. These challenges lead me to make two further recommendations, one strategic and one practical.

Here's what young people said:

"I don't want to live where I do now, I want to live somewhere safe where there are jobs and no one hanging around street corners"

"The [Real] Living Wage is good, but if available hours are low it isn't actually going to improve your life as where I live the transport costs are so high"

Recommendation 11 - Do more to disseminate models of good practice on inclusive growth

The Scottish Government is developing a strong strategic narrative on inclusive growth. The narrative now needs backing up with firm action at national, regional, local and community level. There are already some positive models in place - for example, in some of the regeneration work in Scotland. Clyde Gateway is an excellent example of regeneration funding for capital investment that has resulted in local job creation.

The Scottish Government should be testing all new capital investment against social as well as economic gains. Public investment should require procurement systems and contractual arrangements to get maximum social benefit. In practice, this means not using price as the sole criteria for awarding contracts. Guidance should be provided to local authorities on the practical steps needed for inclusive growth and local areas should have flexible arrangements to pursue the best local solutions. Furthermore, urban areas with high areas with minority ethnic residents should be singled out for inclusive growth strategies.

Problem: The concentration of young people in low quality employment, and their difficulty in getting jobs with reasonable security and prospects, has potential implications for the sustainability of the economy, as well as for population health, social cohesion, and levels of poverty and inequality in Scotland.

The evidence review highlights that low quality labour - and, particularly, securing work in line with skill levels - is a broader concern for this whole generation of young people, not only the least advantaged. Young adults today struggle in the labour market in spite of being the most highly educated generation yet. There is evidence to support the idea that a structural level change is happening, where young adults today are experiencing exclusion from the labour market in a way that is new to the current generation. ^[52] For example, analysis by JRF found that young adults in the UK were more disadvantaged in the labour market than previous generations (in terms of unemployment, low pay and job quality).^[53] The relationship between poor quality work and place is important. The poorest neighbourhoods have the weakest job markets. As mentioned above, young people growing up in poor areas have little experience of adults in high quality work. Not only do we need to think about improving economic prospects in poor areas, we also need to ensure that costs of transport do not prevent young people from seeking jobs further afield.

Easy access to good transport services, not least for leisure and social facilities, is also important in relation to social isolation and exclusion. This may be particularly key for disabled young people, care leavers and young carers.

Here's what young people said:

"I was paid £2.76 an hour as an apprentice. I had to pay £40 a week to get to my work. I was left with hardly anything to live on."

"For me the cost of actually getting to work is the same as my hourly rate of pay."

Recommendation 12 - Do more to provide subsidised/free transport for young people aged 25 and under

The Scottish Government is already taking practical steps in the right direction here. The Fairer Scotland Action Plan set out that apprentices under 21 will get free bus travel, and there's a new Job Grant for people 16-24 who have been out of work for six months or more. I'm also aware that the Transport Minister has had meetings with young people and stakeholder organisations on changes to the national concessionary travel scheme affecting apprentices, which is a very positive first step. Nevertheless, transport remains a key concern for many young people.

More could be done to explore how devolved transport plans in this area link with or can complement existing arrangements within reserved services. For example, DWP work coaches can provide access to the Flexible Support Fund ( FSF) to help people entering employment overcome financial barriers, including travel expenses, training courses and clothing for interviews, while the Jobcentre Plus travel discount card offers half price rail fares and discounts on bus services in Scotland for 18-24 year olds who have been unemployed and claiming Jobseekers Allowance or Universal Credit for 3-9 months. However, the current arrangements for these reserved schemes - coupled with scarce information on the www.gov.uk website - limit considerably the uptake and use of what could be a key driver to employment. A report from the House of Commons Library has previously raised concerns about the FSF in particular,^[54] but Scottish Ministers could usefully raise these issues with UK counterparts.

I've also been impressed with the work Young Scot have been doing on their National Entitlement Card, which has real potential to ensure young people, eligible for some subsidies, can use them without stigma. I understand the Scottish Government is looking at how it can help Young Scot with this important work.

A further problem with travel subsidies is that they are often restricted to off peak travel, which makes getting to college or work on time difficult. Linking the government travel discounts mentioned above to the Young Scot card could also be beneficial, reducing stigma and ensuring a high rate of uptake, and might generate savings to devolved and reserved areas of government associated with young people's travel.

Finally on transport, I'm also aware that there's been some thinking around changing entitlements to concessionary travel for some older people. I fully support bold action in this area - with the proviso that there is a generational transfer so that what older people lose, younger people gain. As the evidence review shows, young people today are significantly disadvantaged in a range of ways compared to previous generations.