Gen Y’s Failure To Launch Launches Worldwide Chaos

In Tunisia, young people organized the Jasmine Revolution to help bring down a dictator. On February 1, their counterparts in Egypt forced President Hosni Mubarak to say he won’t seek reelection. The young, unemployed, and unhappy have brothers and sisters across the globe.

In Tunisia, young people organized the Jasmine Revolution to help bring down a dictator. On February 1, their counterparts in Egypt forced President Hosni Mubarak to say he won’t seek reelection. The young, unemployed, and unhappy have brothers and sisters across the globe.

In Britain, they are NEETs — “not in education, employment, or training.” In Japan, they are freeters: an amalgam of the English word freelance and the German word Arbeiter, or worker. Spaniards call them mileuristas, meaning they earn no more than 1,000 euros a month. In the U.S., they’re “boomerang” kids who move back home after college because they can’t find work.

Even fast-growing China, where labor shortages are more common than surpluses, has its “ant tribe” — recent college graduates who crowd together in cheap flats on the fringes of big cities because they can’t find well-paying work.

Bloomberg BusinessWeek reported earlier this month on The Youth Unemployment Bomb, explaining that in each of these nations, an economy that can’t generate enough jobs to absorb its young people has created a lost generation of the disaffected, unemployed, or underemployed. This includes growing numbers of recent college graduates for whom the post-crash economy has little to offer.

With no place to go, the largest, best educated generation in history is making its voice heard, creating revolutions, and wreaking havoc worldwide.

Last year, British students outraged by proposed tuition increases — at a moment when a college education is no guarantee of prosperity — attacked the Conservative Party’s headquarters in London and pummeled a limousine carrying Prince Charles and his wife, Camilla Bowles. Scuffles with police have repeatedly broken out at student demonstrations across Continental Europe. And last March in Oakland, Calif., students protesting tuition hikes walked onto Interstate 880, shutting it down for an hour in both directions.

While the details differ from one nation to the next, the common element is failure — not just of young people to find a place in society, but of society itself to harness the energy, intelligence, and enthusiasm of the next generation.

Here’s what makes it extra-worrisome: The world is aging.

According to Bloomberg’s report: ‘In many countries the young are being crushed by older workers who appear determined to cling to the better jobs as long as possible and then, when they do retire, demand impossibly rich private and public pensions that the younger generation will be forced to shoulder.’

“The older generations have eaten the future of the younger ones,” former Italian Prime Minister Giuliano Amato told Corriere della Sera.

In Britain, Employment Minister Chris Grayling has called chronic unemployment a “ticking time bomb.”

Jeffrey A. Joerres, chief executive officer of Manpower, a temporary-services firm with offices in 82 countries and territories, adds, “Youth unemployment will clearly be the epidemic of this next decade unless we get on it right away. You can’t throw in the towel on this.”

Youth unemployment is tempting to dismiss. The young tend to have fewer obligations, after all, and plenty of time to save for retirement. They have the health and strength to enjoy their leisure.

But the failure to launch has serious consequences for society, as has been observed in recent protests and riots popping up worldwide.

“Educated youth have been in the vanguard of rebellions against authority certainly since the French Revolution and in some cases even earlier,” says Jack A. Goldstone, a sociologist at George Mason University School of Public Policy.

In a nation with a healthy economy, a burst of new talent on the scene should spur economic growth. Even so, rich democracies laregly ignore youth unemployment. In the 34 industrialized nations in the Organization for Economic Cooperation and Development, at least 16.7 million young people are not employed, in school, or in training, and about 10 million of those aren’t even looking, the OECD said in December 2010.

In the most-developed nations, the job market has split between high-paying jobs that many workers aren’t qualified for and low-paying jobs that they can’t live on. Many of the jobs that once paid good wages to high school graduates have been automated or outsourced. In other cases, employers have a preference for hiring senior citizen or immigrant workers because they tend to accept lower wages than youth and young professionals.

Eventually, the retirement of the Baby Boomers will increase demand for younger workers. But that’s of little comfort to the young people who are out of work now. The short term has become distressingly long. Although the recession ended in the summer of 2009, youth unemployment remains near its cyclical peak. In the U.S., 18 percent of 16- to 24-year-olds were unemployed in December 2010–a year and a half after the recession technically ended.

What’s more, when jobs do come back, employers might choose to reach past today’s unemployed, who may appear to be damaged goods, and pick from the next crop of fresh-faced grads. Starting one’s career during a recession can have long-term negative consequences.

The only surefire cure for youth unemployment is strong, sustained economic growth that generates so much demand for labor that employers have no choice but to hire the young. Economists have been working on microscale solutions, such as training programs to smooth the transition from school to work.

In the meantime, there’s a newfound appreciation for an ancient work arrangement– the apprenticeship–because it greases the transition from learning to doing. In an update on the apprentice idea, countries such as the Netherlands encourage university students to gain work experience while enrolled.

Something similar is catching on in the U.S. AT&T, with almost 270,000 employees and an annual training budget of nearly $250 million, is trying to smooth high school students’ transition to work with a program called Job Shadow that exposes students to the realities of employment. Insight into the minds of American teenagers has made AT&T executives realize the magnitude of the challenge.

Another option: entrepreneurship. With all its guesswork and improvisation entrepreneurship could be the most underexploited means of reducing youth unemployment. In 2008 the University of Miami started an entrepreneurship program called Launch Pad inside its career center to send the message that starting your own company is a valid career option, not just a class to take.

Since then, University of Miami students and recent grads have launched 45 companies.

After Miami’s entrepreneurship initiative caught the eye of Stephen A. Schwarzman, the billionaire head of private equity firm Blackstone Group, the Blackstone Charitable Foundation last year launched a similar program in southeastern Michigan with Wayne State University and Walsh College. On Jan. 31, as President Barack Obama announced his Startup America initiative at the White House, Blackstone said it would expand what it also calls LaunchPad to five more cities, as yet unnamed, devoting $50 million over five years.

Chronic youth unemployment may not be fixable. But there’s evidence it can be reduced through the concerted efforts of government, labor, business, education, and young people themselves.

One thing is certain: All over the world, the NEETs and freeters and boomerang kids are hungry for a chance to thrive. And soon, companies everywhere are going to need this generation to survive. When that time comes and the tables have turned, will your company be the one this generation chooses?

Here’s a hint: If you’ve neglected and continue to neglect this generation, don’t count on them to show up for work tomorrow. They will probably be out causing a revolution, starting up their own company, or working for someone who gave a damn about their future.