Wednesday , 20 September 2017


Youth Unemployment: a Looming Societal and Economic Problem That Will Adversely Affect Us All

Youth unemployment is a very large and looming societal and economic problem in developed countries. The seriousness of this issue cannot be overstated. [Let me expand on the current employment situation in many of the developed countries of the world, what the remedies might be and what the ramifications likely will be if remedial action is not taken – and soon.] Words: 1092

So says Ian R. Campbell (www.StockResearchPortal.com) in edited excerpts from one of the components of his subscription service* which is presented here with his kind permission for posting on www.munKNEE.com (Your Key to Making Money!). This paragraph must be included in any article re-posting to avoid copyright infringement.

Campbell goes on to say, in part:

Why Read: Because Youth Unemployment has to be at or near the top of both near-term and long-term economic issues that must be addressed. If they are not, they will bring the ‘edge of the economic and societal cliff’ ever closer.

Americans think their unemploment rate (youth and in total) is terribly high but it pales in comparison with those in Spain, France, Italy, the U.K., Greece, Ireland (and I could go on and on) [Read: Europe’s Scariest Unemployment Chart – Ever]. Such high and persistent levels of unemployment, particularly among the 18-24 age group, is sowing the seeds of ‘youth frustration’ with:

  • those that govern the countries in which the unemployed youth live,
  • those who do have jobs – perhaps in some instances focused on the ‘otherwise retired people’ who take jobs that youth would otherwise fill and
  • the society they live in generally.

At some point that frustration may manifest itself in anti-social actions by those youth whose ‘smart-phones’ and social networks enable ready communication among them.  

Featured Article: An article entitled Europe’s perpetual ‘wasted youth’ focuses on Europe’s youth unemployment numbers. The article reports that not only do many European countries currently suffer from serious youth unemployment rates, but also points out that while this may be a somewhat exacerbated problem currently, it is not a new phenomenon in many European countries. For example, the article reports that while youth unemployment rates have reached 51% in Greece and Spain, 36% in Italy, and 30% in Ireland, the average youth unemployment rate for the past 40 years has been:

  • 30% in Italy, where Italy’s GDP grew at an annual rate of 2% during the 1994 – 2000 period and Italy’s youth unemployment averaged 33% in those growth years; and,
  • 32% in Spain, where Spain’s GDP grew at an annual rate of 3.6% from 1995 – 2007 and Spain’s youth unemployment averaged 28% in those growth years.

The article claims that these historic European youth unemployment rates are the result of structural and educational problems – citing Germany’s current ‘just over’ 8% youth unemployment rate and better coordinated school system and industry apprentice programs.

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My Commentary: That said, irrespective of Europe’s past youth unemployment rates, youth unemployment simply has to be a very large and looming societal and economic problem in developed countries.

The following table sets out the 2011 GDP, latest reported population, and 2007 and current reported youth unemployment rates for seven of the world’s current 10 largest developed economies (2007 statistics for Japan, Russia and Australia not found):

 

 

2011 GDP U.S.$ Trillions

Population Millions

Current Unemployment Rate %

2007 Youth Unemployment Rate %

Current Youth Unemployment Rate %

United States

15.1

314

8.1

11.7

16.4

Germany

3.8

82

5.6

11.4

7.9

France

2.8

65

10.0

18.3

21.8

United Kingdom

2.4

62

8.2

13.6

21.9

Italy

2.2

59

9.8

21.3

35.9

Canada

1.7

35

7.3

11.0

13.9

Spain

1.5

46

24.4

17.4

51.1

Sources: Wikipedia, various, referenced Guardian article

These 2007 and 2012 youth unemployment rate statistics are set out in the following table:

 

 

A second article entitled Youth unemployment across the OECD: how does the UK compare reports on youth unemployment in OECD (Organization for Economic Co-operation and Development) countries. That article, published in The Guardian has a number of interesting charts and tables that include many other countries – all of which charts and tables tell the same general story as set out in the foregoing table and chart.

Finally, another article entitled  Global Youth Unemployment Rate Staggeringly High: ‘Lost Generation’ Feared reported the International Monetary Fund as saying the “the average unemployment rate among workers ages 15 – 24 is nearly twenty percent”.

The solutions to youth unemployment in developed countries, once one gets past structural issues (meaning improper or inadequate training for available jobs, or jobs not available in proximity to possible employees), in essence, are two in number, neither of which is likely to reverse in the next several years:

  1. generate real (not inflationary) economic growth in the countries with youth unemployment problems. Given the current general economic malaise in many developed countries, this is an increasingly unlikely scenario; and/or,
  2. establish lower forced retirement ages, thereby making jobs available to youth that are now being filled by otherwise retirement age people who are working to retain their life styles as best they can. That said, the trend in legislated retirement ages is tending upward, as elderly people live longer, and as governments then have extended pension time horizons they want to offset.

The consequences that may or will flow from prevalent and increasing youth unemployment include:

  • a sense of failure on the part of both uneducated and educated youth looking for jobs, not finding them, and watching their ‘expected careers’ either being postponed as to starting date, or slipping away entirely;
  • an increased reliance on parents, relatives and friends for moral and financial support;
  • an increase in ‘youth frustration’ with both those that govern the countries in which the unemployed youth live, those who do have jobs – perhaps in some instances focused on the ‘otherwise retired people’ who take jobs that youth would otherwise fill, and the society they live in generally.

Conclusion

The seriousness of this issue cannot be overstated. Unfortunately, like many things today driven by economics, there are no ready practical answers. Once again, it is frustrating to:

  • be able to readily see a problem;
  • not be able to offer one or more practical suggestions as to how to fix that problem in an expedient way; and,
  • observe most people apparently so focused on their own problems that they seem ‘not to have time’ to take their heads out their own sandbox and consider what is going on around them.

High and persistent levels of unemployment, particularly among the 18-24 age group, is sowing the seeds of ‘youth frustration’ which may well manifest itself in anti-social actions by those youth whose ‘smart-phones’ and social networks enable ready communication among them. Unfortunately the obvious problems people don’t see today may prove to be the ones that will hit them over the head from behind tomorrow.

 *(The above is just one of many of Stock Research Portal’s daily commentaries, critiques, ‘Think for Yourself’ challenges and ‘Speak For Themselves’ World Headline summaries. Subscribe now to receive our full, unabridged newsletter.)

Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

Related Article:

1. Europe’s Scariest Unemployment Chart – Ever

euro

The last time we plotted European youth unemployment…Spain was actually worse off than even Greece…Following the latest economic…update from Greece, however, things are back to normal, as Greek youth unemployment is officially the second one in Europe after Spain to surpass 50%. In other words, Europe’s scariest chart just got even scarier [as seen below]. Words: 370

Other Insights by Ian Campbell:

1. What Does ‘Structural’ Unemployment Mean? What Does It Mean for Future Economic Growth ?

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It is important when your read articles on Job Reports that you understand what Structural Unemployment is, and what it means to economic growth. [This short article will attempt to do just that.] Words: 432

2. Save 1+ Hours! Read Campbell’s Synopsis of, and Comments on, the IMF’s 2012 World Economic Outlook

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The International Monetary Fund has just released its 2012 World Economic Outlook, sub-titled ‘Growth Resuming, Dangers Remain’. I have read it in full and present a brief synopsis of it below which will save you more than 1 hour of your time doing so. I have also commented on some of their statements to provide greater clarity and understanding of what the report conveys. Words: 674

3. China’s Doubling of the Yuan’s Trading Band Seen As Very Significant – Here’s Why

The Chinese central bank’s doubling of the trading band on the Yuan/U.S.$ exchange rate to 1.0% as of today has been greeted by general enthusiasm and is seen as a very significant move on China’s part for a number of reasons. Let me explain. Words: 772

4. Campbell’s Critique of Meredith Whitney’s Municipal Default Claims

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Meredith Whitney has resurfaced on the subject of U.S. Municipal defaults stating that a “tidal wave” of defaults in the municipal bond market is still building and will eventually hit the United States [although her views are at odds with those of] Moody’s Investors Service [who only see] a small but growing number of defaults. [Here is a critique of her latest views.] Words: 385

5. Campbell Asks: Can Italy Be Far Behind Spain?

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About three months ago, shortly before Greece’s sovereign debt was restructured, I began to warn about Spain as the next Eurozone country to focus on. That has, indeed, turned out to be ‘all the news’ with reports every day on Spain’s deteriorating financial condition. Given the ongoing world economic uncertainty and volatility, however, I suggest you now begin to pay very careful attention to Italy going forward, but doing so without losing sight of what is transpiring in Spain. [Let me explain why I see ‘Italy’ eventually surpassing Spain as ‘all the news’.] Words: 485

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It is all too easy to look for like-minded persons who continuously reinforce one’s own views – a clear form of ‘lemmingism’, to coin a new word. Instead, one should make an effort to recognize both reader and writer biases when reading and thinking about things found on the Internet in social media websites and blogs. [Let me explain my views on that further.] Words: 720

7. Campbell: Balanced Opinions Regarding Gold & Silver are Paramount – Here’s Why

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If you hold, or are considering holding, physical gold or silver or both, [it is imperative that you] read as many ‘balanced opinions’ as you possibly can with respect to ownership of each. [Here’s why]. Words: 337

8. Campbell’s Challenge: ‘Think for Yourself’ When Reading This Article on Gold!

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It doesn’t take a rocket scientist to figure out that the technical picture for gold has been rapidly deteriorating…and a look at the longer term charts makes it clear that we have just witnessed a head and shoulders formation that has dramatically failed. The chip shot on the downside for gold here is $1,500 [maybe even] $1,450. Bring a double dip scare for the economy into the picture, which I expect to see this summer, and $1,100 is a possibility. If you get a real stock market crash in 2013, as many analysts are predicting, and you’ll get another chance to buy at $750. [That being said,] long term, I still like gold and expect it to hit the old inflation adjusted high of $2,300 during the next hard asset buying binge – but remember also that long term, we are all dead. Words: 900

9. Campbell’s Critique: Some Gold Prognostications are Well Based, Some Much Less So – Here’s a Comparison

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When forecasting, many economists and commentators fail to focus on the dramatic change in inter-country dependence in our ever more globalized world…and fail to let the actual markets influence their views. Below I critique two articles, rationalizing what they see for the price of gold for the balance of 2012. Words: 730

10. Is Gold the Ultimate Inflation Fighter It Is Claimed to Be?

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Below is a synopsis of, and comments on, a very well balanced article on physical gold which is rather rare in this day and age. The article challenges everyone who owns gold, or is considering owning gold, to think for themselves, and then come to their own conclusions as to whether physical gold is, indeed, the ultimate inflation hedge that it is so often claimed to be. Words: 800

11. Save Time While Staying Informed: Today’s 6 ‘Speak For Themselves’ World Headlines With Links

The following 6 headlines, with links, have been personally filtered from over 1,200 articles canvassing economic and resource news to save you time while staying informed on the key issues of the day.

12. Campbell’s Critiques on Fiat Currency, Washington Gridlock, Business Journalism and Career Choices

Hundreds of articles are posted every week but their content is almost never challeged. Campbell does just that. He conveys his comments, concerns and criticisms in a concise conversation, concluding his critiques with either his concurrence or contrary point of view. He invariably ends each critique with a question or two for you to mull over until his next insightful and thought-provoking commentaries. Put your thinking cap on and give them a read. Words: 1722