Youth Unemployment - Essay Example

Youth Unemployment Contents Contents 2 Introduction 3 Main Body 3 Conclusion 16 Reference List 18 Introduction The scope and scale of commercial activities in the contemporary world are significantly increasing in most of the major economies. With the rise in the scale of commercialization, the overall skills and qualities demanded from the newly recruited workforces have significantly increased. In the current epoch, unemployment is a common phenomenon for both developing and developed nations of the world. It is true that the precise nature and cause of unemployment is largely different across nations. Developed rich economies in general experiences high cyclical or frictional unemployment. On the other hand, the developing or most of the underdeveloped nations in the world exhibit structural, disguised and seasonal pattern of unemployment. However, though the type of unemployment across nations is diverse, there exists large commonality among all of its impacts. High incidence of poverty, poor health status, lack of adequate education and poor standard of living are the common severe impacts of unemployment. This research patchwork test will analyze the incidence of youth unemployment across nations in the contemporary world, both with quantitative and qualitative analysis tools (Giles, 2012). Main Body (a) The books focussed on jilted generation of U.K., who according to the authors, are the individuals born from 1970 onwards (Howker and Malik, 2010). The authors claimed that all the individuals in the jilted generation face more uncertain future, experiences more impecunious income but enjoy high spirits of competition within them. It was stated that these group of individuals experience relatively less welfare benefits from the external world, when compared to the benefits achieved by their older generations. In short according to the author, the jilted generation are the youth of U.K. who are subjected to the severe atrocities of recession, crisis and competition in the current era. U.K. is considered to be a developed nation in the world but at present the level of youth unemployment in the country is as high as 21% of the total population in the nation (Howker and Malik, 2010). The acronym, NEET is utilized to represent the share of 9% youth in the nation who is not educated, employed or trained. It is found that the majority of the youth of U.K. does not compromise of the accurate skills that are required by the contemporary recruiters in the nation. The author claimed that the jilted or the young generation individuals of a nation are primarily responsible for driving the long run economic growth and prosperity of a nation. As, they turn out to be the prospective tax payers and national income earners of the nation. A miserable state of this section of individuals in a nation signifies the long run economic downfall of the country. Persistence high youth unemployment in U.K. since the last few years indicate that a large section of individuals in the country would not be able to pay debt repayments, receive adequate pensions and healthcare services in future (Howker and Malik, 2010). In order to eradicate the youth unemployment thresholds in a nation, the government of U.K. had generated several unemployment benefit programs. Under the regime of this program, some young educated individuals were provided jobs in companies like Tesco, Primark and several street store organizations. However, the author claimed that several young individuals who received jobs under this program were rendered jobless by their companies as all of them were claimed to breach the rules and regulations of the organizations. These companies claimed that all those workers who disobeyed the norms of ‘workfare’ (benefits registered under Nixon administration), were rusticated from their jobs. There were several other programs like ‘Mandatory Work Activity’ and ‘The Young People Trailblazer’ that were introduced to increase the employment opportunities of the jilted generations had begun successfully but proved to be less ambitious after implementation (Howker and Malik, 2010). Most of the multinational companies in U.K. were found to outsource cheap labour resources at its workplaces and provided only temporary employment opportunities to the native youths of the nation. Thus, in chapter 2 the author elaborated on the scare job opportunities of the current youth in U.K. and thereby indicated the threatening state of the economy of U.K. in the long run (Howker and Malik, 2010). (b) The extent of youth unemployment is largely diverse across all the nations of the world. The following context of the paper will analyze the trends of youth unemployment for a randomly selected sample of 10 countries across the globe. For the purpose of the trend analysis, the paper will capture time series data (2000-2012) for percentage of youth unemployment across the 10 selected nations. The data is collected from World Bank’s official website. The analysis is accomplished by considering the data on percentage of youth unemployment (between 15 to 24 years) among the total population, for each of the nation. With the help of descriptive statistical analysis, the paper will elaborate on the trend of youth unemployment across the nations. Table: 1 Selected Sample The above table shows the list of 10 nations that are selected in the sample. The sample thus, comprises of middle, low and high income nations. At the same time can also be classified in terms of their geographical locations like nation form EU, Asia and Latin America. The table also indicates the value average youth unemployment rates in the 10 nations considering the years 2000 to 2012. Initially, from the above table it can be claimed that the extent of youth unemployment is highest in South Africa, followed by Sri Lanka. On the other hand nations like India and Mexico experiences the lowest value of youth unemployment rate. The analysis, for the trends of youth unemployment is done through the graphical trend analysis method. Figure 1: United States (Source: World Bank, 2014) The above graph shows a positively slope trend line for youth unemployment in U.S. However, though the trend is a positive line, but still the country had experienced booms and depressions in the level of its employments. Figure 2: United Kingdom (Source: World Bank, 2014) The case of U.K. in the above graph also shows a positively sloped trend line that indicates rising youth unemployment level of U.K. However, it should be noted that the actual line of youth unemployment of the country is subjected to less upswings and downswings than the case of United States. Figure 3: Australia (Source: World Bank, 2014) The trend line in the above graph is slightly negatively sloped. This indicates that over time the level of youth unemployment in Australia is falling. Figure 4: Finland (Source: World Bank, 2014) The case of Finland and Australia is almost similar as; from the above graph it can be observed that the trend line of Finland is also slightly negatively sloped. Figure 5: Sri Lanka (Source: World Bank, 2014) Though Sri Lanka is a small developed nation in Asia, with relatively less financial reserves, but still from the above graph it can be claimed over time the level of youth unemployment in the nation has significantly fallen. The trend line for unemployment in Sri Lanka is a steep negative curve. Figure 6: Mexico (Source: World Bank, 2014) The above graph explains that the level of youth unemployment in Mexico is also increasing over time. The trend of young unemployment in the nation is positively sloped. Figure 7: Russian Federation (Source: World Bank, 2014) The trend line of youth unemployment rate for the developing nation of Russia is also negatively sloped and hence it can be claimed that the country is offering higher employment opportunities to its youth in the recent years. Figure 8: India (Source: World Bank, 2014) The above trend line indicates that since the last 14 years, India is experiencing higher unemployment rates for its young workforce. Figure 9: Brazil (Source: World Bank, 2014) However, contrasting the case of India, the above graph explains that the level of unemployment for the young individuals in Brazil have significantly fallen since the last few years. Figure 10: South Africa (Source: World Bank, 2014) With an exception to all, the trend line of South Africa is perfectly elastic or horizontal. It indicates that the country is experiencing persistent high rate of youth over the last few years. Country Name Trend Line Pattern on Youth Unemployment United States Rising United Kingdom Rising Australia Falling Finland Falling Sri Lanka Falling Mexico Rising Russian Federation Falling India Rising Brazil Falling South Africa Constant After interpreting the above trend curves it can be summarized that United Kingdom, United States, Mexico and India are experiencing rising trends in youth unemployment. The causes of youth unemployment in these nations are: Due to poor macroeconomic performance Unequal growth effects across all economic sectors Cyclic unemployment patterns (occurring due to changes in business cycle) Transformational roles demanded for workplace entrepreneurs However, the level of youth unemployment in Australia, Finland, Sri Lanka, Russian Federation and Brazil is falling with time. It can be claimed that the above countries have probably improved in terms of those factors that are poor performing for the nations with rising youth unemployment levels. However, in South Africa youth unemployment rate has neither increased nor fallen over time. Despite of experiencing high economic growth, South Africa over the last few years have experienced high rise in its labour force strength. The domestic employment opportunities in the nation are not able to suffice the requirements of jobs for its youth. (c) If the global context is assumed, then it can be stated that youth unemployment exists across all the nations and regions of the world. Figure 11: Global Distribution of Youth Unemployment (Source: Oesch, 2010) The above graph explains that the maximum level of youth unemployment exists in the nations of South Asia followed by the European Union. However, the least level of youth unemployment exists in North Africa. The Youth income level of a nation signifies the long run economic stability of its economy. Thus it is highly rational to estimate the precise causes of youth unemployment in the contemporary era. In 2007, the real estate sectors of many western economies experienced significant rise in the prices of construction properties. During this period of time, property trading took place for speculative purposes. Easy credit facilities and overestimation of profits ultimately increased the number of failed projects in the country and generated the global financial crisis in the subsequent years. The scales of operations of most of the companies in these nations were lowered due to lack of adequate investment opportunities. As a result the employments of youth significantly decreased during due to the crisis. Most of the companies started to prefer experienced workers in their workplace. Finally, during 2008 to 2009, it was found that almost 4.6 million young individuals were rendered jobless in the global marketplaces. Moreover, the education and workplace training opportunities provided to the youth in most of the nations are inadequate in the current era. The existence of frictional unemployment among the youth is also high in the developed nations. Under such situations, the demand and supply of labour force in the labour market does not match with each other. Among the total unemployed young individuals in the developed nations, large proportions are actually voluntarily unemployed. Such pattern of unemployment is experienced when the individuals does not agree to work because of not getting the appropriate job offer. Moreover, the scale and scope of operations in the modern corporate companies have also become very complex in nature. As a result, companies are demanding for more skilled, versatile, trailed and experienced workers. Apart from the recessionary trails in the global marketplaces (caused after global financial crisis) and lack of training as well as educational facilities, the political governance pattern across most of the nations are also responsible for the existence of high youth unemployment levels. The ruling political parties in many nations indulge in uneconomic spending activities in order to satisfy the present generations and win their democratic support. Such uneconomic allocation program of the governments ignores the requisites of the future generations (ILR, 2013). If the level of youth unemployment in a nation cannot be reduced, then it simply marks economic downfall in the same country in long run. Thus both public and private authorities of nations in the current era must undertake strict initiatives to reduce the level of youth unemployment. Youth and general unemployment patterns are widely different in terms of its underlying cause factors. General unemployment in a nation can occur due to lack of adequate job opportunities. However, youth unemployment occurs when the jobs available in the market does not demand for the exact skills and expertise present among the young generations. With the rise in the level of business internationalization, the complexity of business operations have created demand for more skilled workers. General unemployment reduction initiative is a long term objective of a nation. However, in a very short span of time the level of unemployment among the young generations can be significantly lowered by increasing the scope of educational, training and skill development opportunities to the youth. U.K. government has undertaken significant steps to lower the soaring level of youth unemployment in its nation. Programs like ‘Mandatory Work Activity’ and ‘Steps to Work’ helped to employ a large proportion of young individuals in the country on temporary jobs. Apart such opportunities, young workers get changes to work in diverse workplaces in U.K. according to their skill and expertise. Figure 12: Types of Jobs in U.K. across Different Sectors (Source: Bell and Blanchflower, 2010) Government authorities in most of the nations at present have introduced the ‘living wage policy’. Under the regime of this law, a minimum necessary wage income level is fixed for all the workers. The minimum level is fixed in such a way that all the skilled, unskilled and semiskilled workers in the nation would be able to sustain the expenses of their daily necessary requirements. However, such support policies would increase the level of youth unemployment in a nation in the long run. This is because, if such policies were not implemented, then some funds could be accumulated both by public and private sectors of an economy and such funds could be used for enhancing the education and skills of the young workforce (Bell and Blanchflower, 2010). Better education, training and skill development opportunities can significantly help in reducing the level of youth unemployment in nation. Appropriate education and professional working skill would help young workers become more competent. Higher competence would help the workers easily grasp employment and social opportunities at workplace. Companies would readily employ knowledgeable and trained employees because they would help in augmenting the overall productivity in workplace. Future innovation and development in workplace can be achieved in companies with the help of such capable young employees. Conclusion From the above context it would be correct to conclude that long run growth and stability in a nation cannot be achieved without the essence of sufficient youth employment opportunities. The state of political, social, economic and cultural aspects in a single country has become highly complex after the emergence of globalization that has integrated all the economies of the world. It is true that the jilted generation in the present era are not provided the adequate opportunities to develop appropriate skills and expertise for achieving becoming competent enough to get good jobs. The 10 country case analysis showed that such unemployment’s exists primarily in those nations where the degree of economic prosperity is extremely high but the education and skill development opportunities available to young workforce are extremely low. Single ‘living wage’ policies would not resolve such problems in the long run; such grave issues can only be addressed with the help of good skill development and educational facilities to the young individuals (The World Economic Forum, 2014). Reference List Bell, D. N. F. and Blanchflower, D. G., 2010. U.K. unemployment in the great recession. [pdf] National Institute Economic Review. Available at: < http://www.dartmouth.edu/~blnchflr/papers/Bell-Blanchflower.pdf > [Accessed 28 February 2014]. Giles, C., 2012. Soaring youth unemployment stokes fears. Financial Times, 2 July. Howker, E. and Malik, S., 2010. Jilted Generation: how Britain has bankrupted its youth. London: Icon Books. ILR, 2013. Global employment trends for youth. [pdf] ILR. Available at: < http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_212423.pdf> [Accessed 28 February 2014]. 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. The World Economic Forum, 2014. Global agenda council on youth unemployment 2012-2014. [online] Available at: < http://www.weforum.org/content/global-agenda-council-youth-unemployment-2012-2014> [Accessed 28 February 2014]. World Bank, 2014. The Data Bank. [online] Available at: [Accessed 28 February 2014]. Read More