Oecd says that Governments must Tackle Youth Unemployment Urgently
The OECD has raised the issue of economic inactivity among those in the 16-24 year old age group, among OECD member countries. In the UK for instance, 20% of young people are not in employment, education or training, classed as NEET. In some member countries it is as high as 40%. This percentage has roughly doubled since the economic decline began. The OECD has brought forward the issue as it is relevant to its mandate for economic progression and social cohesion among democratic market economies.
Why has the OECD highlighted this particular age group?
Although unemployment and hardship is increasing among all age brackets, it is considered that those who have yet to form work habits could develop an attitude of negativity and unwillingness towards a working lifestyle. This could be very damaging both from an economic and social perspective. This is the age group which will be the driving force of economic growth in the future. Statistically, children brought up by parents who work are less likely to become welfare dependent themselves and less inclined to resort to street crime. Overall, the percentage in the 16-24 age group classed as NEET is 2-3 times higher than the average unemployment rate for a country.
What are the reasons for the high percentage?
There is an argument that young people are less inclined to want to take up gainful employment. It is not uncommon for there to be reports in newspapers, particularly those leaning to the political right, about employers struggling to recruit people and having to hire economic migrants instead. On the other side of it, Dr Wadsworth, an economist from the London School of Economics, considers an important problem to be the fact that people are more inclined to accept a cut in their hours of work, or in their pay, than in previous recessions. This leads to less people being laid off and therefore less recruitment. Many new recruits would are young workers.
Is there a solution?
Clearly during hard economic times, there is going to be extra strain on education and training services, which are generally set up to work during normal economic conditions. It can be harder for young people to gain the experience they need to compete in the jobs market. There is no easy option. Even Sweden, with all its government initiatives, has a quarter of young people in the NEET category. There should be a benefits system which encourages people to consider work rather than making them think it isn't worthwhile. Work experience opportunities should be available to all. Secondary school education should have more time for helping children develop life skills and knowledge of the jobs market.
What the future holds
Over the long term, prosperity increases. However, it seems about every 10-20 years there is a significant decline in consumer demand. Nobody really knows how long this downturn is going to last for. There is still a considerable amount of consumer debt and the banks are still rebuilding capital. The banking crisis is not the fault of young economically inactive people, but they are having to deal with the effects. The OECD has urged rapid action to deal with the problem of youth unemployment, however, it seems governments are stuck with the idea that cutting expenditure is the only option. Perhaps the OECD can succeed in making governments reconsider their options and consider the long term costs of high youth unemployment.
References:
Telegraph.co.uk
