No future for the young?

A modern cure to the epidemic of unemployment

The financial crisis of 2008 has had devastating impacts on the world's economies[1]. While economic recovery has lately been witnessed in several countries, the young generation still bears the consequences of the economic recession[2]. Several European countries have been hit hardest with youth unemployment rates ranging from 27.9% for Portugal to 44.7% in Greece[3]. During a recession, the economic activity slows down and fewer jobs are created[4]. Although the crisis did not only impact young people, the youth population was particularly affected being the largest share entering the job market[5]. In addition, the long-term effects of unemployment are particularly marked for young people who are prone to the so-called "scarring" effect, which reduces their chance of being hired once they have experienced the situation of unemployment[6].

Generally, the issue of unemployment is viewed as a the consequence of pale economic growth, a rigid labour market, varied perceptions of work and a discrepancy between the employers' needs and employees' skills[7]. In his book "Prosperity without Growth", the economist Tim Jackson argues that it is in fact our current obsession with rising labour productivity in modern economies, which drives unemployment forward[8]. This is explained by the fact that "[a]s each hour of working time becomes more productive, fewer and fewer hours of labour are needed to deliver any given level of economic output"[9]. Therefore, as long as labour productivity is increasing, the level of demand must follow accordingly in order to keep the total hours of employed labour unchanged[10]. Jackson refers to this particular issue as the "productivity trap"[11]. This logic is actually central to capitalism, given that rising rates of labour productivity increase production per unit of time[12]. Labour productivity, is essentially a measure of the "efficiency with which human resources are used in the production process"[13]. Technological advancements are important drivers for labour productivity[14]. However, recent technological changes are also feared to bring unemployment forward as most manual jobs could become automated[15]. Overall, it seems that the constant drive for labour productivity coupled with the advent of automation implies that significant levels of economic growth would be required to compensate for the loss of jobs as a result of both trends. Economic growth is indeed promoted as the greatest solution to tackle unemployment[16]. This brings to the greatest point of contention between neoclassical and ecological economists, the latter rejecting unlimited economic growth given the limited natural capacity of the earth[17]. Faced with those issues, it seems that the only way to resolve the conundrum of unemployment is to let go of the grail of labour productivity and support employment in sectors with a high demand in workforce, such as the care, craft and cultural industries[18][19].

However, policy proposals by organisations, such as the OECD, the EU and the International Labour Organisation, mostly focus on an optimal allocation of the labour market by better matching the supply with the demand[20][21][22]. In fact, their proposed so-called "structural reforms" are about facilitating "school to work transitions" and promoting flexibility within the market[23]. While these policies could potentially minimise the impacts of unemployment for the young generation, they do not address the fact that the labour market is being saturated. As some argue we have now entered the age of "the end of work", doesn't the goal of full employment, as is the case for labour productivity, become equally a technical and a moral impasse[24]? Ecological economists, such as Jackson and Galbraith, argue that it is actually possible to bring back full employment with a shift to labour sectors that require a high labour workforce[25][26]. On the other hand, some argue that the ecological imperative we are facing forces society to review its production and consumption downwards through an overall reduction of the economic activity[27]. As such, a work-time reduction could play an instrumental role in favouring this socio-ecological transition[28]. Keynes had in fact predicted that by 2030, we would only work 15 hours per week, given the level of affluence we would have reached by then[29]. A reduced working week, supported by a universal basic income, could indeed facilitate a fair redistribution of work among the population and enable people to dedicate their time to non-monetarised activities, such as caring for the elderly and children[30].

The recent surge of unemployment, with its disastrous consequences for the youth, offers the opportunity to question the meaning and values attached to work in our modern societies. Rather than increasing productivity and growth at all costs, promoting leisure, care and cultural activities could both become concrete solutions to youth unemployment and respond to the economic and moral crisis of work.

References

[1] Tse, T. and Esposito, M., 2013. Youth unemployment could wreck Europe's economic recovery. The Guardian, [online] 14 November. Available at: https://www.theguardian.com/commentisfree/2013/nov/14/youth-unemployment-wreck-europe-economic-recovery [Accessed 9 November 2017].

[2] Ibid.

[3] OECD, 2017. Youth unemployment rate. [online] Available at: https://data.oecd.org/unemp/youth-unemployment-rate.htm [Accessed 9 November 2017].

[4] International Labour Organisation (ILO), 2017. Rising to the youth unemployment challenge. New evidence on key policy issues. [pdf] International Labour Office, Geneva. Available at: http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_556949.pdf [Accessed 9 November 2017].

[5] Borland, J., 2014. Unemployment is hitting youth hard: this is what we should do. The Conversation, [online] 19 June. Available at: https://theconversation.com/unemployment-is-hitting-youth-hard-this-is-what-we-should-do-27590 [Accessed 9 November 2017].

[6] Scarpetta, S., A. Sonnet and T. Manfredi, 2010. Rising Youth Unemployment During The Crisis: How to Prevent Negative Long-term Consequences on a Generation?, OECD Social, Employment and Migration Working Papers, No. 106, Paris: OECD Publishing [Accessed 9 November 2017]. Available at: http://dx.doi.org/10.1787/5kmh79zb2mmv-en, p.15.

[7] Tse, T. and Esposito, M., 2013. Youth unemployment could wreck Europe's economic recovery. The Guardian, [online] 14 November. Available at: https://www.theguardian.com/commentisfree/2013/nov/14/youth-unemployment-wreck-europe-economic-recovery [Accessed 9 November 2017].

[8] Jackson, T., 2017. Prosperity without growth. Foundations for the economy of tomorrow. 2nd ed. London: Routledge.

[9] Ibid.145

[10] Jackson, T., 2017. Prosperity without growth. Foundations for the economy of tomorrow. 2nd ed. London: Routledge.

[11] Ibid.145

[12] Jackson, T., 2017. Prosperity without growth. Foundations for the economy of tomorrow. 2nd ed. London: Routledge.

[13]The Swiss Federal Statistical Office, 2017. Productivity. [online] Available at:  https://www.bfs.admin.ch/bfs/en/home/statistics/national-economy/productivity.html [Accessed 11 November 2017].

[14] Investopedia, 2017. Labor Productivity. [online] Available at:  https://www.investopedia.com/terms/l/labor-productivity.asp [Accessed 11 November 2017].

[15] Cole, M., 2017. Automation. [online] Available at: http://www.autonomyinstitute.org/wp-content/uploads/2017/07/Automation-V5.pdf [Accessed 11 November 2017].

[16] Borland, J. 2014. Unemployment is hitting youth hard: this is what we should do. The Conversation, [online] 19 June. Available at: https://theconversation.com/unemployment-is-hitting-youth-hard-this-is-what-we-should-do-27590 [Accessed 11 November 2017].

[17] Exploring Economics, 2016. Ecological Economics. [online] Available at: https://www.exploring-economics.org/en/orientation/ecological-economics/ [Accessed 11 November 2017].

[18] Galbraith, J. K., 2013. The Third Crisis in Economics, Journal of Economic Issues, 47(2), pp.311-322.

[19] Jackson, T., 2017. Prosperity without growth. Foundations for the economy of tomorrow. 2nd ed. London: Routledge.

[20] Scarpetta, S., A. Sonnet and T. Manfredi, 2010. Rising Youth Unemployment During The Crisis: How to Prevent Negative Long-term Consequences on a Generation?, OECD Social, Employment and Migration Working Papers, No. 106, Paris: OECD Publishing [Accessed 9 November 2017]. Available at: http://dx.doi.org/10.1787/5kmh79zb2mmv-en

[21] Lahusen, C, Schulz, N., Graziani, P. R., 2013. Promoting Social Europe? The development of European youth unemployment policies. International Journal of Social Welfare, 22: 300-309.

[22] International Labour Organisation (ILO), 2017. Rising to the youth unemployment challenge. New evidence on key policy issues. [pdf] International Labour Office, Geneva. Available at: http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_556949.pdf [Accessed 9 November 2017].

[23] Scarpetta, S., A. Sonnet and T. Manfredi, 2010. Rising Youth Unemployment During The Crisis: How to Prevent Negative Long-term Consequences on a Generation?, OECD Social, Employment and Migration Working Papers, No. 106, Paris: OECD Publishing [Accessed 9 November 2017]. Available at: http://dx.doi.org/10.1787/5kmh79zb2mmv-en, p.20

[24] Aeon, 2016. Fuck work. [online] Available at: https://aeon.co/essays/what-if-jobs-are-not-the-solution-but-the-problem [Accessed 11 November 2017].

[25] Galbraith, J. K., 2013. The Third Crisis in Economics, Journal of Economic Issues, 47(2), pp.311-322.

[26] Jackson, T., 2017. Prosperity without growth. Foundations for the economy of tomorrow. 2nd ed. London: Routledge.

[27] Schor, J. B., 2005. Sustainable Consumption and Worktime Reduction. Journal of Industrial Ecology, 9(1-2), pp.37-50.

[28] Ibid.

[29] Bregman, R., 2016. The solution to (nearly) everything: working less. The Guardian, [online] 18 April. Available at: https://www.theguardian.com/commentisfree/2016/apr/18/solution-everything-working-less-work-pressure [Accessed 8 November 2017].

[30] Ibid.