Will recession create another 'lost generation' of British youth?

Their school results are the best ever. They are more technologically savvy than their forebears. And arguably more employable.

But young people in Britain are proving to be the real victims of this recession. A triple whammy – fewer graduate jobs, a squeeze in university slots, and dire prospects for 16-to-18-year-olds – makes for a grim picture for the class of 2009.

Almost a million young Britons are now classified as "neets" (not in education, employment, or training), a number that looks certain to rise in coming months. One in six 18-to-24-year-olds falls into this category. Already, social experts are talking about a new "lost generation" similar to the one decimated by the economic decline of the early 1980s.

"It is a very difficult summer for young people, especially because they know their older siblings have had an easy ride in the last 10 to 15 years," says Frank Furedi, a sociology professor at the University of Kent, adding that available jobs are typically part time and poorly paid.

Worst season for graduates

Most deeply affected are those leaving university looking for jobs, those chasing university places, and those who have decided against higher education and are looking to head directly into work.

For those who have spent thousands getting a degree (and racking up debts of £15,000, or $25,000), this may be about the worst season to graduate for decades.

A succession of blue-chip companies is scaling back or cutting trainee programs. One survey showed that recruitment of graduates had fallen more than 13 percent. Another, by the Chartered Institute for Personnel Development (CIPD), found that fewer than half of employers aimed to recruit 18-to-24-year-olds.

Students report that the recruitment fairs, known as the "milk round," have been particularly dispiriting.

"A lot of my friends are struggling," says Emma Gilbody, who is grateful for a year-long placement in industry, which has postponed her own graduation until next summer. "Some can't even get jobs as secretaries because they are too overqualified. It's a nightmare."

Ms. Gilbody is already worried about next year. "When we graduate next year there'll be a backlog of people from this year still looking for jobs," she says.

Squeezing university slots

But it could be worse: You could be 18, with a decent set of exam results in your hand, but no place to take them. Tens of thousands of young Britons are facing disappointment this year in their quest to get into universities.

The reasons are multiple, but at least two are linked to the economic downturn. Many older people who have been laid off are applying for degree courses. And the number of slots has been restricted by a government-funding crunch.

As a result, more than 100,000 young people are chasing the few places available. Overseas students need not worry: As they pay higher fees, they will not be affected.

Alan Smithers, director of the Centre for Education and Employment Research at the University of Buckingham, says the scramble for places is ironic because of the Labour government's stated aim of getting half of all 18-to-30-year-olds into further education.

"Labour declared a target for 50 percent aged 18 to 30 to go to university, and given the present level of demand it could reach that this year – but it hasn't the money available to fund it," he says.

This is not the only embarrassment for a government seeking reelection next year. The dire situation facing 16-to-17-year-olds has undermined Labour's dogged efforts to get them work.

Another 'lost generation'?

This group is the most affected, an irony given that exam results released last month set new grade records.

"This is the worst time in a generation for young people, but it's the 16-to 18-year-olds who are worse affected," says Gerwyn Davies, public-policy adviser at the CIPD. "The number of 16- and 17-year-olds who have been unemployed for six months and more has gone up 100 percent over the past year. The government should be doing more to help this group."

People like Mr. Davies want the government to dig deeper to fund greater numbers of apprenticeships and study places.

Mr. Furedi argues that it is imperative to avoid a repeat of the earlier "lost generation." "There is a large section of society that simply is not engaged in any socially useful activity," he says. "Society has institutionalized this. The worst thing now is that 1 in 6 children are growing up in homes where nobody works. They end up with no idea of getting up in the morning and keeping time."