Economic for Business - Global Youth Unemployment - Essay Example

Study on Global Youth Unemployment Table of Contents Introduction 3 Jilted Generation of UK 3 Youth unemployment across different nations 4 United Kingdom 4 United States 5 Australia 5 Sri Lanka 6 Mexico 7 India 7 South Africa 8 Causes of Youth unemployment 10 Consequences of Youth unemployment 12 Solution 13 Conclusion 14 Additional readings 15 Introduction The problem of youth unemployment has been rising uncontrollably since the last few decades. The youth are three times more prone to unemployment than adults. A good education with high marks or graduating from a reputed college is not enough to get employed. Lack of practical knowledge, mismatch between the education structure and the labour market needs and slow growth of economy are reasons because of which unemployment is increasing at an alarming rate. This essay lays emphasis on the unemployment situation in UK as described in the book ‘Jilted Generation: how Britain has bankrupted its youth’ (Howker and Malik, 2010) and also on youth unemployment factors across the world along with their potential causes and solutions. Jilted Generation of UK The book, ‘Jilted Generation: how Britain has bankrupted its youth’ (Howker and Malik, 2010) focuses on the young generation of UK and the way political and economic climate has rendered them jilted. The poor economic condition of the youth leads to weak economic development in future, where they would be unable to pay off debts, receive healthcare and pension benefits. The authors of the book claim that the young generation of UK has received little benefits from the external environment to grow and prosper. This includes low training and development, late start of career, low educational growth and higher dependency on parents. If jobs are not available, then the young generation shall not be able to pay off debts or invest in house and property. Lack of earning also demotivates them to pursue higher qualification. Large sections of the youth take up smaller part-time jobs to support themselves. Since the youth cannot afford to buy houses by themselves, due to the high rental rates, they prefer living with their parents. Therefore, they remain to be in the shade and care of their parents, which causes them to develop lack of self-sustaining abilities. The dependency factor has also led them to be less serious about education and growth. However, the young generation does not compromise on receiving the basic education that would provide them with jobs; however, owing to lack of experience, they are ignored by companies. In order to eradicate the problem of youth employment, the U.K. government had taken measures such as, ‘Mandatory Work Activity’ and ‘The Young People Trailblazer’. Under such programs, the youth received training from reputed companies like, Tesco, Primark and several street store organizations and the selected good performers were offered jobs in the same company. Nonetheless, the author claims that many of such young trainees were rendered jobless by the companies as it was seen that they had breached certain organizational rules and regulations. Therefore, in this manner, many of the developmental programs initiated by the government, although proved to be successful in the beginning, did not really pay off in later stages. The problem of youth unemployment was not dealt well through these schemes. In addition, effects of recession had lead to low job availability in the UK economy. Many firms had slowed down their growth pattern in the fear of loss. Thus, even the well-educated classes of youth were rendered jobless. Youth unemployment across different nations United Kingdom UK being one of most developed nations of the world faces a high level of unemployment which is close to 21% of the population. The main reason being the fact that the people do not have the adequate skills and abilities required meeting the job requirements of the nation (Howker and Malik, 2010). Figure 1: Youth Unemployment in UK (Source: World Bank, 2014) United States Youth unemployment had considerably risen and had reached a peak of 19.6% in 2010. The prime reason being the recession that had lowered availability of jobs. Since then, employment figures have gone down substantially (Howker and Malik, 2010). Figure 2: Youth Unemployment in US (Source: World Bank, 2014) As employment opportunities disappeared, majority of the youth went back to colleges for completion of studies or for higher studies. Several young Americans avoid taking up jobs and remain dependent on their parents or remain satisfied with a low wage job. These factors may lead to serious problems in future (Howker and Malik, 2010). Australia The rate of unemployment in Australia has shown a falling trend. This indicates that the nation has taken sufficient measures to tackle the problem of youth unemployment (International Labor Organization, 2013). Figure 3: Youth Unemployment in Australia (Source: World Bank, 2014) Although Australia has lesser unemployment issues compared to UK and US, it is still seen that the rate at which unemployment is falling has been slow. In order to maintain a steady decline, the nation needs to focus on developing better policies (International Labor Organization, 2013). Sri Lanka Despite being a small nation in Asia, Sri Lanka has shown significant alleviation of youth unemployment. The nation proves to be a model country for other nations in the context of youth unemployment (The World Economic Forum, 2014). Figure 4: Youth Unemployment in Sri Lanka (Source: World Bank, 2014) The government of Sri Lanka has tried to improve the education system of the nation. Apart from this, valuable training and counselling are also provided to the youth in order to able to find jobs in a competent manner (The World Economic Forum, 2014). Mexico There has been a rising trend in the level of youth unemployment in Mexico. It has been quite high, owing to lack of economic development and poor education (International Labor Organization, 2013). Figure 5: Youth Unemployment in Mexico (Source: World Bank, 2014) The recession of 2010 has had a considerable impact on Mexico. Although unemployment levels have gone down, it still remains high from perspective of the economy as a whole (International Labor Organization, 2013). India India has been experiencing a significantly high unemployment rate since the last 14 years. The main reason attributed to this is lack of job opportunities (International Labor Organization, 2013). Figure 6: Youth Unemployment in India (Source: World Bank, 2014) Though the government has taken considerable measures to develop the economy and increase work opportunities, very less impact has been seen. The growing population, poverty and lack of training are the main issues (International Labor Organization, 2013. South Africa Unlike other nations, youth unemployment graph of South Africa is perfectly horizontal. This signifies that the nation has been experiencing persistent high rates of unemployment (International Labor Organization, 2013). Figure 7: Youth Unemployment in South Africa (Source: World Bank, 2014) The economic development of South Africa has been low. Poverty has rendered a large chunk of the youth population illiterate. Also, many in this nation cannot afford a very high level of education, leading to serious shortage in skill availability (International Labor Organization, 2013). Figure 8: Global youth unemployment rate (Source: International Labor Organization, 2013) The above figure shows the trend in global pattern of unemployment. The level of unemployment was significantly high in 2005, which after a brief recovery, again rose to a high. The main cause of this was the global economic meltdown. Availability of job opportunities had significantly fallen during the time period of 2010 to 2012. Figure 8: Rate of youth unemployment (Source: Görlich, Stepanok and Al-Hussami, 2013) A global analysis of the level of youth unemployment is shown in the above figure. It is observed that youth unemployment was the highest in North Africa till 2005. Post-2005, highest rate of youth unemployment has been observed in the nations of Middle East. South Asia has a low level of youth unemployment since the beginning (Görlich, Stepanok and Al-Hussami, 2013). Causes of Youth unemployment From the above analysis, it is clear that almost all nations across the world suffer from youth unemployment problems; regardless of being developed, developing or underdeveloped. It is, therefore, important to know the precise reasons behind such a problem. The primary causes of youth unemployment are (Economics Help, n.d.): Lack of experience and skill- The fresh pass outs from schools and colleges lack in experience and skills. As a result, most companies are not willing to hire them. On hiring employees and workers with little or no skill, firms need to invest a lot of time and money in training them. Lack of qualifications- In countries, such as, US, it is seen that many high school pass outs do not continue with graduation. So, companies do not hire them because of their lack of education. They take up small or temporary jobs and continue to be satisfied with it. In underdeveloped countries, due to poverty, a large proportion of the youth cannot pursue higher studies, which makes them incapable of getting decent jobs. Lack of economic growth- Lack of job opportunities is the result of low economic growth. Hence, even the well-educated class of youth finds it hard to acquire jobs. This is also a cause of high unemployment in less developed nations of the world. High population- When rate of growth in population is not synchronized with that of the economy, it leads to unemployment issues. This is the major cause of low employment in the developing nations of the world, such as, India. The slow economic growth is not adequate for supporting the rising population as it fails to generate enough jobs. Rigid education system- The education system in most countries does not help in developing job-ready work force. The practical world and teachings imparted through books and in classrooms are found to be completely different. Hence, several individuals find it difficult to understand the way corporate world functions and end up being unable to secure proper jobs. Lack of rural urban migration- In many nations across the world, the youth find it difficult to move to larger cities so as to locate job opportunities. As a result, unemployment levels in smaller towns increase. Negative attitude of the young generation- It is quite often observed that the youth prefer to abstain from working. They do not find themselves compatible with the highly competitive and stressful environment of workplaces. Sometimes, they may also be reluctant to work in a particular industry or be extremely selective about their choice of workplaces. Discrimination based on race and gender- People belonging to a particular race might find it difficult to get job opportunities in a particular nation because of the fact that they either do not belong to the original race of that nation or come from a backward class. Similarly, gender biasness is also seen to exist in many organizations. Over-qualification- When individuals are highly qualified, their expectations from the job that they desire are also seen to increase. As a result, they are reluctant to opt for small jobs or jobs that pay less. In addition, organizations prefer not to hire over-qualified people as they are likely to show less interest in the job or might quit the job, when better opportunities come by. Lack of government efforts- Even though governments of different nations have established policies and organizations to deal with the issue of youth unemployment, these have been found to be functioning inadequately. The government interventions in these activities have also been quite low. Dependencies on parents- In many cultures, the youth, especially girls, are expected to remain dependent on their parents. They are encouraged to start working after crossing the threshold of a certain age. Also, due to adequate financial stability of parents, young generations remain dependent on them, even after becoming able enough to start working. Consequences of Youth unemployment A high rate of youth unemployment may have disastrous consequences on the society as a whole. Some of the issues relating to this are discussed as follows (Academia.edu, 2014). Increases in criminal activity- Criminal activities are seen to be extremely high in nations that are underdeveloped and have inadequate job opportunities. As a result, young generation sought to resort to criminal activities so as to earn a living. They engage themselves in smuggling, theft and other dishonest works for earning and supporting their families. Suicides- In many nations, it has been seen that being unable to get a job has made young boys and girls resort to suicides. This is a not only a sad consequence, but also a matter of grave seriousness. Loss of resource- One missed opportunity in human resource would mean one less resource to produce goods and services. Also, youth unemployment renders abundant talent of the young generation wasted. Loss of Tax- When people begin to earn, they are likely to pay taxes in different forms. This is lost when individuals fail to get jobs. Poverty- Lack of revenue leads to poverty and poor standards of living. People are then unable to support their survival and heath needs. Solution Youth unemployment is an issue that cannot be solved quickly. Only after continuous long-term efforts, changes and improvements in this respect can be seen. Some of the solutions that can be prescribed for this problem are as follows (Marshalle, 2006): Recruitment screening of companies and recognition- Firms that have been recruiting high level of workforce should be given special recognition and awards. Such firms can also be provided with special tax benefits. In addition, companies who have shown low rates of employment should be directed to increase their recruitments by creating potential job opportunities. Recruitment of fresher’s and training- Universities and colleges find it extremely difficult to place their students in good companies. Therefore, companies must be encouraged to employ freshers. For this, firms must impart training to fresh job seekers. Governmental support should also be there in this matter, especially for those firms who are financially weak for imparting such trainings. Development of job centres- Underdeveloped countries face a shortage of job centres that guide job seekers and help them to find a suitable career. Job centres present firms with the right talent after careful screening of employees. Reformed education system- Mere book education and classroom lectures are not sufficient in developing adequate knowledge about functioning of companies. Incorporating more of training, apprenticeship and internship programs into the education system would be helpful (Oesch, 2010). Global labour exchange policy- Outsourcing jobs and growth of multinationals have significantly improved the possibility of acquiring jobs. Also, nations must collaborate to solve the problem of unemployment by adhering to liberal flow of manpower from one nation to another. Developing more potential industries- Governments should focus on developing the economy so that more job opportunities can be created. It must try to expand those sectors that have the potentiality to house young talent, such as, tourism industry, environment management, research and development and social services. Conclusion Youth unemployment is a matter of serious concern. The present youth are the developers of tomorrow’s world. If they are not given the opportunity to grow, the future of this world may seem dark. Only when the youth is taught and trained properly, can they meet the challenges of tomorrow (Petersen and Mortimer, 2006). In addition, when the youth lose quite a number of years in their search for jobs, a lot of their skills get reduced or become inadequate. This impacts their self-confidence, leading them towards underestimating their own skills. Moreover, if the world needs advancement and innovation, the youth must be provided with opportunities. Additional readings Academia.edu, 2014. The effects of rampant unemployment on the attitude of the youth towards education. [online] Available at: [Accessed 12 March 2014]. Economics Help, n.d., Causes of Unemployment. [online] Available at: [Accessed 12 March 2014]. Görlich, D., Stepanok, I. and Al-Hussami, F., 2013. Youth unemployment in Europe and the world: causes, consequences and solutions. [pdf] Kiel Institute for the World Economy. Available at: [Accessed 12 March 2014]. Howker, E. and Malik, S., 2010. Jilted Generation: How Britain Has Bankrupted Its Youth. London: Icon Books. International Labor Organization, 2013. Global employment trends for youth 2013. [pdf] International Labour Organization. Available at: < http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_212423.pdf> [Accessed 12 March 2014]. Marshalle, M. I., 2006. Economics of Unemployment. New York: Nova Publishers. Oesch, D., 2010. What explains high unemployment among low-skilled workers? Evidence from 21 OECD countries European. Journal of Industrial Relations, 16(1), pp. 220-288. Petersen, A. C. and Mortimer, J. T., 2006. Youth unemployment and society. Cambridge: Cambridge University Press. The World Economic Forum, 2014. Global agenda council on youth unemployment 2012-2014. [online] Available at: [Accessed 12 March 2014]. World Bank, 2014. The Data Bank. [online] Available at: [Accessed 12 March 2014]. Read More