Apprenticeship can create jobs for ranks of young unemployed

Updated: 2014-12-09 14:25


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New measures in the United Kingdom that encourage employers to hire young trainees should get a closer look from many countries, including China.

Employer national insurance contributions for apprentices below the age of 25 will be abolished, Chancellor of the Exchequer George Osborne announced in his Autumn Statement on Wednesday.

While there was much talk about tax cuts in the statement, the apprenticeship system is one of the most important and helpful policies.

Under the policy, exemption from paying national insurance on apprentices under the age of 21 will be extended to those aged under 25.

The goal is to encourage businesses to hire more than 3 million apprentices during the term of the next Parliament, or 50 percent more than over the past four years.

Osborne explained that the government has tried to deliver fairness to those who aspire to work, including young people, by providing a more efficient and beneficial system.

Employers in the UK who will hire an estimated 500,000 apprentices will benefit from the change, which will apply from April 2016.

The change will cost the UK government more than 400 million pounds ($627 million) in lost revenue through fiscal 2019-20.

Youth unemployment has created "a generation at risk", according to the International Labor Organization, with worldwide youth unemployment forecast to rise to 12.8 percent by 2018.

Many governments are struggling to tackle the youth unemployment problem.

In the developed economies, the unemployment rate among those aged 16 to 24 is about 18.1 percent, with wide variations. The rate in Germany stands at 9 percent and the rates in the UK and the United States are 20 percent and 16 percent, respectively.

In Spain and Greece, half of the young people are jobless.

Abolishing employer national insurance contributions for apprentices aged under 25 will give UK businesses a good reason to hire an apprentice and increase young people's competitiveness. It will have a direct impact on job creation, be a good incentive for employers to invest in young talent and inspire more opportunities.

With relatively good economic growth, youth unemployment in Asia is among the lowest in the world, but it is getting tougher for young people to find jobs.

In China, a record 7.27 million people graduated from universities this past July. That is more than seven times the number 15 years ago.

There are so many graduates seeking work that Premier Li Keqiang has called for more efforts to create new businesses to employ them.

In recent years, the "ant tribe" in China has been a growing phenomenon. It refers to the army of underemployed or underpaid young graduates unable to fulfill their ambitions. Many are living in squalid communities in big cities waiting to find a job.

Many of them are under 25, and they can not earn enough to live. They are regarded by sociologists as part of the country's underclass, joining lowly social groups such as farmers, migrant workers and unemployed workers.

Maybe it is time to consider an apprenticeship system that benefits businesses if they hire young people.