A prospect for the young: Coordinating a global front for tackling youth unemployment

Shirish Jadhav, a graduate from Indias elite institute, the Indian Institute of Technology, had never given much thought about his placement prospects until he had to face the reality of not getting a job, or at least not the right one. India, a nation of over a billion with more than 300 million youths is facing a situation where the system of higher education as a measure of professional success is gradually breaking down. The situation hardly seems something peculiar to India alone. Shirish, much like many of his global peers, is part of a generation that is bearing the consequences of populism and deferred liabilities of the past generation. Burdened with heavy economic debts, emerging from the woes of the recent crisis, much of the developed as well as developing world is proving unable to provide for the opportunities that the talented and highly educated youth of todays generation demand and deserve. We suffer not only from a demand side job creation slack, but also a dysfunctional supply side skill impartment system along with a mire of policies that leads to a mismatch of the two sides of the equation

The birth of modern system of education

The modern system of education is a product of the Industrial age of the 19th century. Designed in an age of manufacturing boom, the system was tasked to train young minds to fulfil the needs of an industrial economy. Slowly this system of education became entrenched in the mind-set of the nation and advanced education became a proxy for better future prospects. All correlations broke when the world took a reality check during the recent crisis. The current depressed job market reveals an ugly truth of having too many youth graduating with skills that the world economy no longer demands. Youth unemployment levels are hovering over 40% in some of the advanced world economies. Yet, we continue to value the same system of education churning students with same skill sets hoping that as long as the output is a highly trained individual, there will be a match for him in the job market. To some extent, there even exists a curious dilemma in some markets, where theres a simultaneous need for jobs by the graduating students, while at the same time a need for the right set of talented people in the industry.

The betrayed aspirations of the youth

An interesting article citing Indias Labour Bureaus annual report states that while unemployment rate among illiterate youth is lowest with 3.7 per cent for the age group 15-29 years at all India level in 20122013, the unemployment amongst the graduate youth increased to 32 per cent during 2012-2013. These are indications of an economy that is pushing efforts to produce a graduate workforce yet stuck with an unskilled labour intensive economic engine. According to a recent McKinsey report on youth unemployment in Europe, there are consistent hurdles that students face from enrolling in postsecondary education to building the right skills and then finding a right job. The sustained unemployment rate among graduates has multi-fold reasons: The cost of education and living has increased to a point where the young find it difficult to take up the desired path of education

Those that do take up higher education perceive less information support and social bias against taking vocational courses The portfolio of skills acquired lack some of the soft skills of communication and ethics that many of the employers today are demanding. There is a lack of coordination between the employers and educators for training the youth workforce In the face of globally faltering recovery the demand side of the job market is supressed leading to lesser opportunities across the talent pool With limited opportunities, those with already some experience in the industry have a better chance at employment than the fresh graduates, making unemployment primarily a concern for the youth Mismatch of talent is resulting in young graduates having to take up job for which they are over qualified and thus get underpaid for their talent, often working part time or on temporary jobs

This mismatch creates a supply constraint for a nation for advancing its economic growth while at the same time the lower economic growth continues to suppress opportunities available for the young talent. Secure jobs were once the norm for previous generations, but sadly not so for the current one. With the global crisis and the ongoing slowdown on growth, part time jobs and temporary work are not just becoming the norm for the employment market but the only option for many of the segments. This leads to a low quality of life and job satisfaction for the younger generation only leading to loss of productivity for the nations growth engine.

Social implications
With the risk of the aspirations of millions of global youth going for a toss, we have a nation of unemployed yet educated individuals who not only experience an economic dissatisfaction but also an element of injustice for their state of affairs. Burdened with education debt for attaining academic degrees and yet not finding the promised opportunities, the unemployed and underemployed youth feel a sense of betrayal. The social unrest will manifest itself in multiple ways derailing the functioning of the government. The Spanish and Greek protests are only cracks in a faltering system. The problems in some of the other parts of world are somewhat different. Developing countries like India continue to see a massive brain drain to the western world for the lack of better opportunities. This in response has irked the feeling of westerners who happen to see immigration as a strain on the already shrinking job market. It is hard to predict the spill over effects due to the lack of an enthusiastic coordinated response from all the global leaders. We are only beginning to see some of the sprouts of social tension in various parts of the world.

The change the world needs

The impact on youth unemployment not only depends on crisis events but also on the duration for which the slowdown lasts. With more than 6 years into the global slowdown, the effects on economic growth and political stability will only be more severe and will accelerate in different parts of the world. We list down a number of suggestions that can address the key reasons discussed above causing youth unemployment 1. A change in the educational system

Simply put, the education system needs to be flexible to adapt to the changing trends of the industry. We no longer live in the manufacturing industrial world. The era of industrial revolution lasted a century, followed by an era of service economy, followed by the current era of a connected economy. Instead of tweaking some of the elements of the schooling system, we now have an overlay of certifications and post-graduation degrees that cater to the changing demands of the industry. The fact is, traditional high school and graduation degrees are no longer a guarantee for a livelihood. The larger objective should be to impart skills to individuals that gives them a chance to succeed in various fields and face the challenges of the new world order in a headfast manner. A McKinsey study in Europe reported 2/3rd of employers never interact with the educators. Educators and employers can no longer work in silos and need to take responsibility to ensure imparting skills to youth that are relevant to todays world. 2. Labour Market Polices Nations need to fix the demand side of the equation as well. When the private sector fails, its the job of the public sector needs to reinforce the market for labour. However, we are seeing a situation where both the pillars of the state have not been able to generate avenues for the youth. Labour policies that restrict hiring and firing employees are creating hurdles for the youth to step on to the first rung of employment ladder. Targeting retirement age polices, pension policies are some of the quick fixes of a desperate situation. The Employment guarantee schemes not only need to provide sustenance, but motivate the unemployed to be active job seekers and connect the demand and supply side of the labour market effectively. Incentivizing the unemployed youth to take up skills that increases their employability via vocational and technical trainings will help alleviate the situation in the longer run. 3. Enhancing the quality of economic growth It is essential to determine not just the quantum but also the quality of the growth of an economy. Metric such as the Economic Complexity Index is one of the way to capture the sophistication of the economy. Developing nations especially that are driving the supply of young pool of talented individuals can no longer afford to stay stuck in a simplistic economy. Failure to nurture advanced technological industries will either cause the educated youth to emigrate or a vast majority to settle for jobs that hardly challenge them to the extent their education demands, leading to lower job satisfaction. In the longer run, this has the potential to supress the need for quality education in the coming generations, creating a self-fulfilling prophecy of a nation stuck in the first gear. Nations labour policies and industrial policy need to work in tandem to minimize the mismatch of talent and opportunities that exist for todays youth. 4. Promoting entrepreneurship Supplementing the twin goals of quality growth and increasing job opportunities is the idea of promoting the educated youth to take up entrepreneurship. They have knowledge, they have the ambition, but what they perhaps lacking is a strong support system for venturing on their own. Risks of not meeting their education loan schedule, risk of not getting exposed to inspiring ideas, risk of sustenance are concerns that hold back todays youth even in their dire circumstances. Governments need to step in and provide support on two fronts. First, policies need to be formulated addressing the challenges that hold back the young generation. A strong financial support not only to restructure educational debt but also for starting up new ventures,

reform to tax laws, support from labour market polices can help allay some of the risk factors. Second, creating forums promoting entrepreneurship can help bring together the likeminded entrepreneurs and foster innovation. Incubation centres that help jump-start ventures from ideas to execution, funded by dedicated funds and mentoring from the industry are some of the measures that will help the economy break from the labour market conundrum, creating more job opportunities while advancing economic growth. 5. Preparedness to tackle the social challenges Finally, regardless of the measures that the leaders take to resolve the state of the present, we still have a huge mass of educated unemployed youth that needs to be channelized for constructive use in the society. Sustenance programs and skill impartment drives are crucial for rehabilitation. But also critical is a media to express their opinions in formulating policies that shape their future. Else there is bound to be increasing alienation between the generations of yesterday and today and the social unease will continue to manifest itself in various anti-social elements.

An appeal to the leaders of today

While acknowledging that todays leaders recognize the issue of unemployment and are trying hard to keep the number down, one cant help feel that it just isnt enough. Just the way this problem is not restricted to a set of selected nations, the solution too has to come from a coordinated execution from global leaders When the nation is full of examples of youth who have invested more than a quarter of their life acquiring talent that they can no longer put to use, take note of the message that we are sending out: That it is futile for the young to aspire for better life and that it is impossible for a nation to rectify a dysfunctional system even with all the political will of its leaders. However, one must choose to have more faith that that; One must believe that voices of the young leaders of tomorrow will find their way to the right forum and bring about a collective change that the world sorely demands from the leaders of today. [Word Count: 2030]

References
DNA. (2014, February 2). We need to create an entrepreneurial culture, says RBI chief Dr Raghuram Rajan. Retrieved from DNA India: http://www.dnaindia.com/money/report-we-need-to-createan-entrepreneurial-culture-says-rbi-chief-dr-raghuram-rajan-1958840 International Labour Organization. (2013). Global Employment Trends For Youth. Geneva: International Labour Organization. Lawrence, J. (2013, February 28). Todays College Graduates: In Debt and Unable to Find a Job. Retrieved from San Diego Free Press: http://sandiegofreepress.org/2013/02/todays-college-graduates-indebt-and-unable-to-find-a-job/ McKinsey & Company. (2014). Education to employment: Getting Europes youth into work. McKinsey & Company. OECD. (2007). OECD Employment Outlook. OECD.

OECD. (2013). The OECD action plan for youth. OECD. OECD. (n.d.). Active labour market policies and activation strategies. Retrieved from OECD: http://www.oecd.org/employment/emp/activelabourmarketpoliciesandactivationstrategies.ht m Sternberg, R. J. (2013, June 17). Giving Employers What They Don't Really Want. Retrieved from The Chronicle of Higher Education: http://chronicle.com/article/Giving-Employers-WhatThey/139877?cid=megamenu The Economist. (2013, June 29). The protests around the world. Retrieved from http://www.economist.com/news/leaders/21580143-wave-anger-sweeping-cities-worldpoliticians-beware-march-protest Zee News. (2013, November 30). Growing unemployment amongst Indian youth. Retrieved from http://zeenews.india.com/bbv/growing-unemployment-amongst-indian-youth_893368.html