Outlook for the Young

Posted in Human Resources Articles, Total Reads: 1410 , Published on 12 September 2014
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Our generation is marked with the prints of irony where employment opportunities are concerned. According to a recent survey conducted by ‘World Youth Report’, the global youth unemployment rate was 75.8 million in 2009 the largest annual increase. The results of this growing rate of unemployed youth can be manifold from increased violence to high rates of income disparity and political unrest.



Former prime minister of Spain Jose Maria Aznar commented "Youth unemployment is dramatic, and its jeopardizing the opportunities for future growth and prosperity". In Spain the youth unemployment rate is 56%. For Greece the youth unemployment rate was 65% and in Egypt it was 39% Comparing statistics of US with these countries, the youth unemployment is low but still it is a remarkable 16.3 percent as on July 2013.

Image Courtesy: freedigitalphotos.net, sattva


If we try to look at the reasons of this global youth unemployment crisis, one of the major and most assignable cause is the economic downturn. Young people are the first ones who suffer when there is an economic downturn in any country, according to the World Economic Forum. Though these people all around the world are graduating with great degrees, they need not have the requisite skill sets needed to satisfy the requirements of available jobs.


The extent of misaligned employment young people are accepting is increasing more than ever and they are often faced with dilemmas of whether to work in a job that doesn’t match with their skills and level of education or to remain unemployed. This has led to need for taking immediate massive actions as the problem is faced on a global scale. It is high time that leaders from around the world should stop discussing the issue further and act upon the probable quick solutions.


In Europe, United States and Canada, more and more people in their 20s are wandering in multiple directions to find ways in their preferred careers. But the problem is far more serious than it seems to be. Many young people are now working in occupations which are outside their interest fields or where the level of qualifications required is very low as compared to the qualifications they actually possess. Statistics reflect that out of few lucky ones who get a job in their preferred areas do not get enough pay to sustain themselves or their families. This phenomenon is generally termed as ‘underemployment’ by labor market experts which means a misfit between a particular job and the skills required to perform that job.


The youth today is struggling for jobs, but firms are adamant about the fact that there is a lack of skilled people like, engineers, analysts, technicians and others to fill the job positions in varied industries. The very origin of the problem is multi-faceted. It can be attributed to a number of forces: changing demands of the labor market, intense cost-cutting measures taken by companies, older population sitting at highly paid positions, to name a few. We are providing much more human resources to the system than it can handle and well utilize and create opportunities for them which have resulted in an ever increasing mass of highly educated and skilled people in their 20s fighting and suffering to get a stake in limited number of good jobs.


Challenges Ahead

Since past many years, the warning signs were much evident from the fact that about one amongst every four workers having a basic university education was struggling for a job that required no special educational requirement and the percentage has increased after recession. About 6.4% of the total workforce in Canada, i.e. 1.2 million people under the age bracket of 30 years are part-time workers who are willing to work for full time and looking for such jobs.


Students who graduated from good universities in Canada went through a phase of increased unemployment from 1997 to 2005 with a relative downfall in wages/salaries. In comparison to these students, people with high school education at least managed to improve their future position. And people without a high school degree were the ones who experienced a corresponding increase in level of unemployment during the same phase. The country with lowest youth unemployment rate is Switzerland which had 6.2% unemployed people in year 2012, according to ILO’s survey. And Greece had the highest percentage of unemployed people which was 54.2%.


Plan of Action

The first and foremost step should be taken by the private sector as NGOs and government do not possess much clarity and direction to handle the global youth unemployment. Collaborations between government, corporations and NGOs could be helpful in holistically resolve this issue. By creating favourable regulatory policies for investment and expansion of private sector, government can support the cause. A systematic, step-by-step and collective action is required to tackle this challenge. A big picture outlook has to be there and proper alignment between labour market requirements and offerings that education system provides. Focus should be on investment on infrastructural developments made by the government and providing skills enhancement training to increase the economic production capacity and enabling long-term growth target. Capitalism should be encouraged on a major scale as it promotes employment creation for young enthusiastic people.


Wage allowances and reductions in taxes from salary for younger people. By providing incentives to young workers can lead to a positive impact on reduction of youth unemployment. Dynamic policies and practices of labor market should be adopted. To narrow the gap between unemployment and young job seekers, measures like career counselling, assisting in job search and different types of training can be used. By promoting the involvement of students in internship and traineeship programs, competency creation and transition to higher positions can be achieved. Creating a binary system for linking education and professional training. There should be a connection between the education structure and the requirements of the job market as it will lead to a sync between job seekers and employers. Professional training would include hands-on training, vocational training, real time case studies and communication skills enhancement. Creating job opportunities for people can help youth in tackling the stress and remorse created by unemployment. To help people find the jobs, we have to make sure that job vacancies are there. Economic growth should be in pace with the increasing demand to provide job opportunities.


By encouraging and developing the SME’s and entrepreneurship, government can create an environment that will be fiscally efficient and will aid in creating broad strategic investments and also enhance the individual’s ability to excel in the job. By promoting entrepreneurship, government can leverage the passion of people and masses to provide a greater reach to jobs. Training and support to entrepreneurs will not only help the developing countries but can also be a great use for developed countries. Measures to curb poverty in places where there are restricted employment opportunities can encourage local resource based self-employment. To illustrate, giving assistance to people in starting and carrying out crafts businesses or selling home-made food, mobile phone repairs, etc. Talking on a larger scale, steps such as creating small self-sustained cooperatives and agricultural ventures can help small scale producers to get reach to a wider market which lead to achieving success and growth. The incompatibility between job creation and the skills supply is illustrated by an anomaly of the current economic condition: persistent, high unemployment exists alongside severe skills shortages and unfilled positions in many enterprises.


Taking the leap forward

As my closing note, I would like to say that in the current labour market scenario, there are ample number of prospective opportunities for growth of business but young qualified people who are seeking a job to work are unable to get hired because they want a job that is a fit between their capabilities and job specifications. Hence, to resolve this issue from grass root level, work from multiple levels is required. Private businesses, government and the education system have to formulate plans and policies to help address the cause and provide youth with a sound foundation of work they are supposed to do and acquire relevant skills which will in turn help them in improving the specific competencies and a proper alignment between individuals with ever-growing expanding demands of business.


This article has been authored by Sherry Singh from IIM Kashipur


Bibliography

• United Nations World Youth Report, Factsheet, 2012

• The Saylor Foundation. "Unemployment Rate." pp. 1 [1] Retrieved 20 June 2012

• Global Employment Trends for Youth Report: A generation at risk, 2013

• http://forumblog.org/2012/07/a-young-solution-to-youth-unemployment/

• http://blogs.worldbank.org/youthink/tackling-youth-unemployment-through-entrepreneurship-call-innovative-spirit-voices-and-actions

• O'Sullivan, Arthur; Sheffrin, Steven M. (2003). Economics: Principles in Action. Upper Saddle River, NJ: Pearson Prentice Hall.

• Harris, Seymour E. (2005). The New Economics: Keynes' Influence on Theory and Public Policy. Kessinger Publishing



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