Youth Unemployment: The "Lost Generation"
In the European Union, 15% of young adults aged 15 to 29 are 'Neets' – not involved in employment, education, or training.
This group has grown to record levels of 14 million recently. It's a generational tragedy that's caused a disenchanted youth population and cost the national governments billions.
This week a report by Eurofound, an EU research agency, discovered how high the cost was. The unemployment rate of European youth costs the EU a grand total of €153 billion ($198 billion) a year and 1.2% of the gross domestic product.
The numbers of European Neets without any employment training whatsoever are shocking. A whopping 73% of 15- to 19-year-olds in the Neet category fit this description, with 43% of 20- to 24-year-olds also unprepared for the workforce, and even 28% of 25- to 29-year-olds in the same boat.
And young adults in general who do have work are more likely to have temporary positions or fewer hours. 42% of young employed people in the EU had temporary positions, and 30% only worked part time.
The EU is not alone in this. All across the world, youth unemployment is high – including the U.S. In fact, according to the International Labour Organization, youth unemployment falls between 15 and 18 percent in the U.S.
And the concerns are more widespread than just finances.
From the Guardian:
“The consequences of a lost generation are not merely economic,” the report warns, “but are societal, with the risk of young people opting out of democratic participation in society.”
It found that these Neets were less likely to be politically engaged. They begin to miss whole sections of opportunity, staying unemployed when they could be acquiring crucial job skills and salary advancements.
Bath University professor of economics and social policy Paul Gregg found this concerning in a similar study he performed. He told the Guardian:
“For young people, the time when you're gaining the experience and skills which lead to rapid advancements in your earning potential really focuses between 18 and 30.
“[So] if you're out of work for a year or so, what you're doing is forgoing that experience, so you are permanently delayed. When people are in their 30s they don't catch back up [with peers] who don't have that absence from the world of work.”
The authors of the report worry that the economic estimates are lower than the real numbers. Their research only considers welfare and lost production, failing to account for additional costs from the psychological effects of unemployment, increased crime, and health spending.
On the other hand, not all unemployed youth may be fit to work. The estimate of 15% does not remove those that may be unemployed because of childcare, mental or physical health issues, or other similar factors.
Still, the national effects are devastating. While the EU average GDP loss may be 1.2%, it's much worse in some individual nations. Ireland, for example, lost 2.8% of its GDP from unemployed youth last year, while Greece lost 3.28%.
The U.S. is not much better off. Data from the 2010 census showed that youth unemployment had grown 12% in ten years, with only 55% of young Americans between the ages of 16 and 29 reporting jobs that year.
They have been called the “lost generation.” In the summer of 2012, the Department of Labor estimated that 39.5 percent of young Americans between the ages of 16 and 24 did not work or even try to find work. For those who did look, 17.1 percent remained unemployed.
And yet U.S. GDP is likely to remain at 2% this year.
A U.S. study estimated that annual cost on Neets in the U.S. is $4.75 trillion – a third of GDP. It factored in lost earnings and public health spending among other things. Even if different factors were measured than in the EU study, this difference is astounding.
U.S. Neets put even more pressure on the economy than in the EU – a quiet pressure that hasn't received much focus at all. Monday night's presidential debate on foreign policy turned to federal spending, particularly on the military.
But in the home of the Occupy Movement, a disengaged youth is one of the biggest problems. And perhaps that's where the focus should be.+8
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