Youth unemployment: is working for yourself the answer?

Unemployment fell by 132,000 from April to June to reach 2.08 million, the lowest total since the end of 2009, according to the Office for National Statistics (ONS).

The number of young people out of work also fell by 102,000 to 767,000 (including 265,000 full-time students looking for part-time work), more than 200,000 lower than a year ago and the biggest fall since records began in 1992.

But the unemployment rate for 16 to 24-year-olds remains historically high at 16.9 per cent, down from 21.4 per cent a year earlier, but way above pre-downturn levels of 13.8 per cent.

Self-employment across all age groups rose by 408,000 in just three months to reach 4.59 million – the highest ever total.

Previous figures published by the ONS show that self-employment among 18 to 24s rose from 2.8 per cent in March 2013 to 3.2 per cent in March 2014.

Entrepreneurship is trending amongst young people, writes Symeon Brown. With self-employment rising, more young people are turning to enterprise, which has been described as the key to lifting Britain's economy. 

Akeem Oluko, 25 (pictured above and speaking in the videos below), is an entrepreneur who has fought dragons for his dream (he has appeared on BBC2's Dragons' Den) to turn peanuts into profit. Akeem is not alone in his appetite for enterprise. Crowdfunding platforms from Indiegogo to Kickstarter are stocked with enthusiastic entrepreneurs who, like Akeem, are in need of a capital boost. 

Some researchers suggest the income of self employed people has fallen by up to 40 per cent. Furthermore, is this rise driven by new entrepreneurs or self-employed contractors doing casual work? The worry is that the rise in self-employment is at the expense of better paying jobs. But what do younger people want - the stability of work or the self-determination of enterprise?

Work and Pensions Secretary Iain Duncan Smith said: “The government’s long-term economic plan to build a stronger economy and a fairer society is working, with employment going up, record drops in youth unemployment and hundreds of thousands of people replacing their signing-on book with a wage packet.”

The government says 2,000 businesses a month have been set up over the past year by people who have moved from claiming benefits to being their own boss.

But Labour argues that while self-employed jobs have made up two-fifths of new posts since 2010, the income from these jobs has fallen by £2,000 on average.

Unite General Secretary Len McCluskey said: “Self-employment is not the economic panacea that ministers crow about. It forces workers into a state without rights and with wage insecurity, and we are increasingly encountering people forced into ‘self-employment’ by employers who want to swerve their responsibilities.”