13 November 2011

Youth Unemployment - The Real Issue

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In amongst all the fantastical numbers that economists bandy around at the moment, there are some frightening figures that get lost in amongst the other seemingly more pressing numbers.  Amongst these, youth unemployment is the most worrying and is perhaps the biggest issue of all.

In the UK, youth unemployment is 21.3% against a total rate of 8.1%  (September 2011).  In Italy, youth unemployment is 29.3% with a national figure of 8.35% (August 2011).  Youth unemployment in Greece is 36% against a national level of 18.4% (August 2011) .  In Spain, youth unemployment is 46.2% with a national figure of 22.6% (September 2011). And this is not just an issue for those in Southern Europe, so in Sweden youth unemployment is 4 times higher than for workers aged 25 - 54, while in Ireland youth unemployment stands at 31.5% against a national level of 14.4% (October 2011) with 100 people emigrating every day at the highest levels since the Great Famine over 150 years ago.

Studies in the UK suggest that the cost of youth unemployment is £4.7 billion a year and £8.1 billion a year from reports by the Recruitment and Employment Confederation Taskforce as well as the London School of Economics.

This is a waste of the young peoples' lives, dreams and hopes, as well as a mammoth waste of capital resources.  Even more than that it creates a very unstable structure for the welfare state:

1. Failing to secure employment for a large proportion of young, let all the underemployment of many of those that find employment, is a failure of the education system, because expenditure on teaching is being frittered away by not getting graduating pupils into useful employment.  This means the wealth of the nation is being gradually eroded away through education that has no economic or intellectual value.  Apprenticeships could start to treat this scar.
2. Then there is the structural issue for the welfare state.  At its simplest, the welfare state is pyramid scheme that relies on enough new employees entering the tax system to finance those who are retiring, needing geriatric care or other benefits.  However, if employees are not starting young and so failing to start paying taxes, then the whole structure will perhaps become irreperably destabilised, while at the other end employees are looking for more benefits from state funded pensions and geriatric care.  With high youth unemployment, the welfare machine cannot function for long before it will simply grind to a halt.  The simple truth is that the pension schemes written for public sector workers in the UK and across Europe cannot be funded as there are not enough people generating new money in our economies to finance them, and without getting the young to start creating real wealth we have not a hope of paying me a sou of my state pension, while my small private pension has shown no growth in years and will not keep me living for longer than a few days, so I expect that I will need to work until I drop.  Incentivising businesses to start recuiting the youth or schemes that will find the entrepreneurs of tomorrow are vital.

Every year more young people leave school, yet with funding cuts more will fail to find university courses to meet their needs and so exacerbating youth unemployment.  While older workers no longer need to retire and as pension schemes fail to provide people with the retirement they crave, job blocks will be created, preventing young people even starting on the employment process.

Unless this issue of youth unemployment is tackled head on and quickly, not only will there be a dangerous restlessness amongst the young unemployed, but the whole edifice of social welfare is liable to topple over under its own grandiose ambitions.

These are dangerous times and we ignore this issue at our peril.  Who will speak for the young?  Not the main political parties, not employers, not the unions, not religious leaders, so they will speak for themselves with protests without care for the consequences for the nation states of Europe, as we do not worry enough for them.

Update 16/11/2011: youth unemployment in the UK rose to 1.02 million or a rate of 21.9% for 16 - 24 year olds against a national rate of 8.3%.   This is a waste of our young, energetic and resourceful youth - who will stand up for them, rather than speak platitudes to them?  What is frightening is how the unemployment rate has grown strongly since 2000, so it is the collective failures of both previous Labour and now the current Lib-Con Governments rather than something that should be used for party politicking being any of the sides, i.e. they have all been pretty useless in addressing this issue.

Updated 19/11/2011:  Sara Blecher's film on train surfing shows the nihilism that can enter the soul of the young when there is no hope and no father figures, or male role models to bring them into manhood.  It could be a bleak future, a Lord of the Flies' world.  Let us all work to give the young back their dreams and hopes for the future and fight back the bleakness of self-destructive nihilism.