Whether you believe it or not but Youth manpower across the European Union, specifically of UK, has been termed as 'wasted' by The Economist magzine in its latest Intelligence Unit. In my opinion, if youth of any country is totally dependent to get a job in govt/public/private rather to become self employed will always be wasted material rather than a "empowered manpower" Read the summary of the same
Courtsey:-The Economist
MIND THE EMPLOYMENT GAP
High youth unemployment threatens long-term competitiveness in the UK
Youth
unemployment has surged across Europe since the 2008‑09
global
financial crisis, in what the German chancellor, Angela
Merkel,
has described as “perhaps
the most pressing problem
facing
Europe at the present time.” In the UK, nearly 1m young people
(aged
between 16 and 24)—or one-fifth of the youth population—are
jobless.
The crisis is not just affecting individuals and society today,
but
it also threatens the long-term growth and competitiveness of the
British
economy.
“Young
people are the future generation,” says Lena Levy, head of labour
market
policy at the Confederation of British Industry, a business
lobbying
group. “If they disengage, businesses eventually will have
problems
recruiting. The economic costs to the country are there.”
Youth
unemployment is a “time-bomb under the nation’s finances”,
concludes
a 2012 report by the Association of Chief Executives of
Voluntary
Organisations Commission on Youth Unemployment. It estimated
that,
at current levels, the “scarring effects of youth unemployment”,
including
higher welfare benefits paid out and lost potential
tax
revenue, would cost the exchequer £2.9bn (US$4.8bn) per year
and
result in annual lost output to the economy of £6.3bn. “The net
present
value of the cost to the Treasury, even looking only a decade
ahead,
is approximately £28bn,” the report said.
Meanwhile,
a UK-based youth charity, the Prince’s Trust, has put the
cost
of lost productivity to the UK at as much as £133m (US$220m)
per
week, and for youth crime at £1.2bn a year.
Other
costs are harder to quantify. Studies have shown that young
people
who have been long-term unemployed experience more ill
health
later in life and become more susceptible to committing crime.
Widening
inequality can increase social tension and instability.
Furthermore,
given the greying of Britain’s workforce, the presence of
a
large group of unemployed in the new generation could undermine
the
financial health of government welfare programmes and weaken
the
talent pool for businesses.
“Being
unemployed at a young age tends to have a big effect later
on,”
says Glenda Quintini, a senior economist at the Paris-based OECD,
a
club of rich countries. “Skills unused can deteriorate. [Unemployed
youths]
can drift into inactivity and become disengaged. This is a very
big
problem for business, because human capital is the no. 1 input.”
Youth
unemployment is not a problem only in the UK. A recent report
by
a global consulting firm, McKinsey & Company, notes that 75m
young
people are currently unemployed around the world, and that, if
estimates
for the number of underemployed were included, the total
would
triple. In countries such as Greece and Spain, youth jobless
rates
exceeded 50% in 2013. Poor economic prospects do not translate
only
into high unemployment rates, but can also become reasons
to
emigrate. In Ireland, where the economy has stagnated for most of
the
past five years, well-educated young people are leaving in large
numbers.
A study by University College Cork found that up to 62% of
emigrants
aged between 24 and 34 have completed tertiary education,
compared
with 47% for the rest of the same age group.
Even
when the UK economy was booming before the crash, a growing
number
of young people struggled to find work. Terence Tse, an
Written
by The Economist Intelligence Unit
SUPPORTED
BY
associate
professor of finance at the London campus of the ESCP
Europe
business school, says that one reason for this trend was
that
youths lacked the basic skills that employers sought. “But the
economy
was growing fast enough to absorb whomever,” he says.
This
situation changed in the wake of the 2008‑09
global financial
crisis.
As companies scaled back and cut jobs, first-time jobseekers,
still
lacking basic skills, struggled even more to find work. Young
people
who were already employed often became the first to be made
redundant,
as they had less experience and the least seniority. The
number
of jobless youths and NEETs—a term first coined in the UK
in
the 1980s, referring to young people who are “not in education,
employment
or training”—surged.
Recently,
the UK economy has started to grow again, expanding by
an
estimated 1.9% in 2013, and The Economist Intelligence Unit
forecasts
that growth will accelerate to 2.5% this year. The overall
jobless
rate has also improved, falling to 7.1% for the three months
ending
November 2013, the lowest level in more than three years
(compared
with 8.4% in 2011). The effects of the economic rebound
have
been slower to accrue to those in the 16-24 age category, with
the
unemployment rate for this group easing by 0.5 of a percentage
point
to 20% compared with the previous year. This compares with an
unemployment
rate among 25‑34
year olds of 6.7% between September
to
November 2013, down from 7.5% for the same period in 2012.
Tony
Dolphin, the associate director for economic policy at the Institute
for
Public Policy Research, a London-based think-tank, says that
there
is likely to be a mix of reasons for this, but he believes that the
main
factor is the shifting structure of the workforce. “Due to globalisation
and
technological changes, jobs that young people would be
recruited
for have disappeared,” he says. These include manufacturing
jobs
that have become mechanised or shipped overseas.
The
government has introduced a number of policies and programmes
to
address youth unemployment, but—say critics—with mixed success.
The
administration has gradually raised the age for full-time compulsory
education
to 18 by 2015. Jobcentre Plus, a service offered by the
UK
Department for Work and Pensions, provides assistance with job
searches
and building curricula vitae (CVs). However, “more intensive
support
is needed for young people” says Sue Maguire, a professor at
the
University of Warwick.
In
addition, the government has made significant funding cuts which
have
affected many programmes, including one that tracks under-18
NEETs,
notes Professor Maguire. In January 2014 the prime minister,
David
Cameron, suggested that he favoured reforms that would
require
those under 25 to take up work, education or training, or face
losing
their housing benefits and jobseeker’s allowance.
Companies
are also stepping in to tackle the youth unemployment
problem,
inspired by Germany’s youth apprenticeship programmes.
Close
collaboration among businesses, educational institutions and
the
government has resulted in Germany enjoying the lowest youth
unemployment
rate in Europe. Barclays, a London-based financial
services
company, has established its own apprenticeship programme
to
recruit and train underprivileged youths. Other companies are
working
with schools or the government to review curricula, and explore
how
they might better arm graduates and apprentices with the
skills
needed in the current labour market.
Business
in the Community, a non-profit organisation that promotes
corporate
responsibility among multinationals in the UK, has helped
to
mobilise the hospitality sector to create 130,000 apprenticeships,
work-experience
placements or job opportunities for young people,
backed
by government funding.
Multinationals,
in any case, tend to have their pick among top graduates
when
recruiting, as well as the manpower and budget to provide
on-the-job
training. Economists say that small- and medium-sized
enterprises
are more likely to be hurt by the country’s high youth
unemployment
rate; these companies are more likely to hire from the
pool
of youths who do not continue into higher education.
Ultimately,
however, everyone loses. Professor John Van Reenen, the
director
of the Centre for Economic Performance at the London School
of
Economics, says that companies might temporarily benefit from
high
youth unemployment rates, as wages decline. But, in the long
term,
“if fewer people are looking for jobs, wages go up.”
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