Generation Jobless (more screwing of the young)

[caden]

A recent Economist had some good articles on youth unemployment. Here's 1 and a link to another. It brings up something we discussed here recently: education as job training.

www.economist.com/news/leaders/21576663-number-young-people-out-work-globally-nearly-big-population-united

Work and the young
Generation jobless

The number of young people out of work globally is nearly as big as the population of the United States

“YOUNG people ought not to be idle. It is very bad for them,” said
Margaret Thatcher in 1984. She was right: there are few worse things
that society can do to its young than to leave them in limbo. Those who
start their careers on the dole are more likely to have lower wages and
more spells of joblessness later in life, because they lose out on the
chance to acquire skills and self-confidence in their formative years.

Yet more young people are idle than ever (see article).
OECD figures suggest that 26m 15- to 24-year-olds in developed
countries are not in employment, education or training; the number of
young people without a job has risen by 30% since 2007. The
International Labour Organisation reports that 75m young people globally
are looking for a job. World Bank surveys suggest that 262m young
people in emerging markets are economically inactive. Depending on how
you measure them, the number of young people without a job is nearly as
large as the population of America (311m).

Two factors play a big part. First, the long slowdown in the West has
reduced demand for labour, and it is easier to put off hiring young
people than it is to fire older workers. Second, in emerging economies
population growth is fastest in countries with dysfunctional labour
markets, such as India and Egypt.

The result is an “arc of unemployment”, from southern Europe through
north Africa and the Middle East to South Asia, where the rich world’s
recession meets the poor world’s youthquake. The anger of the young
jobless has already burst onto the streets in the Middle East. Violent
crime, generally in decline in the rich world, is rising in Spain, Italy
and Portugal—countries with startlingly high youth unemployment.

Will growth give them a job?
The most obvious way to tackle this problem is to reignite growth.
That is easier said than done in a world plagued by debt, and is anyway
only a partial answer. The countries where the problem is worst (such as
Spain and Egypt) suffered from high youth unemployment even when their
economies were growing. Throughout the recession companies have
continued to complain that they cannot find young people with the right
skills. This underlines the importance of two other solutions: reforming
labour markets and improving education. These are familiar
prescriptions, but ones that need to be delivered with both a new vigour
and a new twist.

Youth unemployment is often at its worst in countries with rigid
labour markets. Cartelised industries, high taxes on hiring, strict
rules about firing, high minimum wages: all these help condemn young
people to the street corner. South Africa has some of the highest
unemployment south of the Sahara, in part because it has powerful trade
unions and rigid rules about hiring and firing. Many countries in the
arc of youth unemployment have high minimum wages and heavy taxes on
labour. India has around 200 laws on work and pay.

Deregulating labour markets is thus central to tackling youth
unemployment. But it will not be enough on its own. Britain has a
flexible labour market and high youth unemployment. In countries with
better records, governments tend to take a more active role in finding
jobs for those who are struggling. Germany, which has the second-lowest
level of youth unemployment in the rich world, pays a proportion of the
wages of the long-term unemployed for the first two years. The Nordic
countries provide young people with “personalised plans” to get them
into employment or training. But these policies are too expensive to
reproduce in southern Europe, with their millions of unemployed, let
alone the emerging world. A cheaper approach is to reform labour-hungry
bits of the economy—for example, by making it easier for small
businesses to get licences, or construction companies to get approval
for projects, or shops to stay open in the evening.

The graduate glut

Across the OECD, people who left school at the earliest opportunity
are twice as likely to be unemployed as university graduates. But it is
unwise to conclude that governments should simply continue with the
established policy of boosting the number of people who graduate from
university. In both Britain and the United States many people with
expensive liberal-arts degrees are finding it impossible to get decent
jobs. In north Africa university graduates are twice as likely to be
unemployed as non-graduates.

What matters is not just number of years of education people get, but
its content. This means expanding the study of science and technology
and closing the gap between the world of education and the world of
work—for example by upgrading vocational and technical education and by
forging closer relations between companies and schools. Germany’s
long-established system of vocational schooling and apprenticeships does
just that. Other countries are following suit: South Korea has
introduced “meister” schools, Singapore has boosted technical colleges,
and Britain is expanding apprenticeships and trying to improve technical
education.

Closing the gap will also require a change of attitude from business.
Some companies, ranging from IBM and Rolls-Royce to McDonald’s and
Premier Inn, are revamping their training programmes, but the fear that
employees will be poached discourages firms from investing in the young.
There are ways of getting around the problem: groups of employers can
co-operate with colleges to design training courses, for example.
Technology is also reducing the cost of training: programmes designed
around computer games can give youngsters some virtual experience, and
online courses can help apprentices combine on-the-job training with
academic instruction.

The problem of youth unemployment has been getting worse for several
years. But there are at last some reasons for hope. Governments are
trying to address the mismatch between education and the labour market.
Companies are beginning to take more responsibility for investing in the
young. And technology is helping democratise education and training.
The world has a real chance of introducing an education-and-training
revolution worthy of the scale of the problem.

Other article: Why is youth unemployment so high?
...The effects of youth unemployment can
persist for years. Those who begin their careers without work are more
likely to have lower wages and suffer joblessness again later in life.
The economic loss can be substantial, too, and not just in the form of
higher welfare payments. Part of these losses may be due to missing out
on training and experience accumulation that typically occurs with young
workers. ...Workers forced
into bad matches or no matches end up on a productivity trajectory well
below what they might otherwise have expected. One estimate suggests
that the total economic loss from youth unemployment was equivalent to
1.2% of GDP in Europe in 2011. ...
www.economist.com/blogs/economist-explains/2013/05/economist-explains-why-youth-unemployment-so-high