An Accident Waiting to Happen, or 'Ever Closer To The Cliff'!
Why Read: Because Youth Unemployment has to be at or near the top of both near-term and long-term economic issues that must be addressed, or if they aren't, bring the 'edge of the economic and societal cliff' ever closer.
Featured Article: A May 14 article focuses on Europe's youth unemployment numbers. The article reports that not only do many European countries currently suffer from serious youth unemployment rates, but also points out that while this may be a somewhat exacerbated problem currently, it is not a new phenomenon in many European countries. For example, the article reports that while youth unemployment rates have reached 51% in Greece and Spain, 36% in Italy, and 30% in Ireland, the average youth unemployment rate for the past 40 years has been:
- 30% in Italy, where Italy's GDP grew at an annual rate of 2% during the 1994 - 2000 period and Italy's youth unemployment averaged 33% in those growth years; and,
- 32% in Spain, where Spain's GDP grew at an annual rate of 3.6% from 1995 - 2007 and Spain's youth unemployment averaged 28% in those growth years.
The article claims that these historic European youth unemployment rates are the result of structural and educational problems - citing Germany's current 'just over' 8% youth unemployment rate and better coordinated school system and industry apprentice programs.
Commentary: That said, irrespective of Europe's past youth unemployment rates, youth unemployment simply has to be a very large and looming societal and economic problem in developed countries. The following table sets out the 2011 GDP, latest reported population, and 2007 and current reported youth unemployment rates for seven of the world's current 10 largest developed economies (2007 statistics for Japan, Russia and Australia not found):
Unemployment Rate %
Unemployment Rate %
These 2007 and 2012 youth unemployment rate statistics are set out in the following table:
A second article reports on youth unemployment in OECD (Organization for Economic Co-operation and Development) countries. That article, published in The Guardian yesterday, has a number of interesting charts and tables that include many other countries - all of which charts and tables tell the same general story as set out in the foregoing table and chart.
Finally, a March, 2012 article reported the International Monetary Fund as saying the "the average unemployment rate among workers ages 15 - 24 is nearly twenty percent".
The solutions to youth unemployment in developed countries, once one gets past structural issues (meaning improper or inadequate training for available jobs, or jobs not available in proximity to possible employees), in essence are two in number, neither of which is likely to reverse in the next several years:
- generate real (not inflationary) economic growth in the countries with youth unemployment problems. Given the current general economic malaise in many developed countries, this is an increasingly unlikely scenario; and/or,
- establish lower forced retirement ages, thereby making jobs available to youth that are now being filled by otherwise retirement age people who are working to retain their life styles as best they can. That said, the trend in legislated retirement ages is tending upward, as elderly people live longer, and as governments then have extended pension time horizons they want to offset.
The consequences that may or will flow from prevalent and increasing youth unemployment include:
- a sense of failure on the part of both uneducated and educated youth looking for jobs, not finding them, and watching their 'expected careers' either being postponed as to starting date, or slipping away entirely;
- an increased reliance on parents, relatives and friends for moral and financial support;
- an increase in 'youth frustration' with both those that govern the countries in which the unemployed youth live, those who do have jobs - perhaps in some instances focused on the 'otherwise retired people' who take jobs that youth would otherwise fill, and the society they live in generally. At some point that frustration may manifest itself in anti-social actions by those youth whose 'smart-phones' and social networks enable ready communication among them.
The seriousness of this issue cannot be overstated. Unfortunately, like many things today driven by economics, there are no ready practical answers. Once again, it is frustrating to:
- be able to readily see a problem;
- not be able to offer one or more practical suggestions as to how to fix that problem in an expedient way; and,
- observe most people apparently so focused on their own problems that they seem 'not have time' to take their heads out their own sandbox and consider what is going on around them. Unfortunately the obvious problems people don't see today may prove be the ones that tomorrow will hit them over the head from behind.
Also read: Youth
unemployment across the OECD: how does the UK compare
Source: The Guardian, Ami Sedghi, May 16, 2012
Reading time: 3 minutes
Also read: Global
Youth Unemployment Rate Staggeringly High: 'Lost Generation' Feared
Source: International Business Times, March 16, 2012
Reading time: 3 minutes