Delegate Charlie Oliver on what needs to be done to tackle youth unemployment.
Follow Charlie on Twitter: @rlieoliver
We all accept that youth unemployment is too high. Where I live, in the UK, the total number of young people, aged 16-24, that are unemployed increased to 9,000 according to government figures released on Wednesday 11 September, totalling close to 1 million.
Sadly, youth unemployment rates are high and remain stagnant in most of Europe. One study in 2011 estimated that the total economic loss from disengaged young people equated to $153 billion or 1% of Europe’s GDP.
Global youth unemployment, currently at 12.6% (75 million), is expected to increase to 12.8% by 2018.
In most cases, in countries where there are high levels of youth unemployment, national governments are facing a number of serious problems, most commonly caused by the global financial crisis. These conditions make for political extremes and competition for diminishing budgets, influenced by a huge range of interests. This means that a quick and effective response to address youth unemployment has not been found, six years after the onset of the financial crisis in 2007.
The huge array of statistics and studies of this make the problem seem faceless and impersonal. The reality is however, that it is a hugely personal crisis to those affected and has lasting “scarring” effects on their quality of life and career prospects.
My question is when will the figure be considered too high? What do we have to get to before something changes dramatically? 100 million? 200 million?
It’s my view that we cannot depend on national governments to resolve this crisis alone - politics is getting in the way of effective policy. Therefore, the private sector needs to do more.
Ideas for the Private Sector
Many large businesses are in a position to do more at the moment, with a great deal of “cash” on their balance sheets. (The Clinton Global Initiative estimates over $1 trillion. UK businesses alone hold £70 billion.)
They could do so in two ways.
Address the "skills gap"
Businesses should invest more and create additional work experience opportunities, graduate roles and apprenticeships for young people. Further, if they cannot find a suitably skilled candidate for an entry level vacancy, train a young person to fill it.
I realise that companies have other financial obligations to meet, but even a small percentage of these massive cash piles invested in creating employment opportunities for young people would make a huge difference. £7 billion of the UK’s £70 billion balance would be enough to directly employ 350,000 young people.
Unified plan of action
Many companies, like my employer Telefónica, are trying to make a contribution in addressing the youth unemployment problem. However, these businesses do not appear to be in any way aligned and receive nominal attention in the news. It is therefore hard to know what action they are taking or how they are progressing.
As a result, the second suggestion I would like to make is for an international group of large companies to get together and form a collective voice, creating a shared list of goals and commitments to lower youth unemployment around the world. By taking this shared leadership position, these companies would attract more attention from the media and bring the youth unemployment crisis further forward into the on-going news agenda. Their work, insight and ambitions would also offer a comparison to the policies of national governments too.
While the private sector has no obligation to act, businesses need to challenge themselves and ask if it is right to sit on the side-lines while the societies of many of their core markets deteriorate. Sluggish, stagnant economies, underpinned by a large number of young unemployed people tend not to make for the vibrant, confident environment that most businesses favour.