A recent article on the Project Syndicate website by Mark Esposito and Terence Tse focused on Income Inequality and Youth Unemployment.
Youth unemployment can be of a structural nature – a mismatch between the skills required for the job and the skills the applicant may have. In a recent survey of nine European Union countries, 72% of the educators who responded reported that new graduates are qualified to meet prospective employers’ needs, though 43% of employers reported that candidates do not possess the required skills.
But, whatever the main factor underpinning high youth unemployment, income inequality undoubtedly exacerbates the problem. Simply put, many jobs – particularly the most lucrative ones – are available almost exclusively to young people from wealthy backgrounds. The reasons they indicated were:
1. Highest-status positions require the most prestigious educational background – and that costs money.
2. Many internships – a prerequisite for the most attractive jobs – are unpaid, making them unfeasible for graduates whose families cannot afford to support them.
3. Companies tend to recruit candidates with a familiar set of skills, experiences, and qualifications.
4. Academic results are among the top hiring criteria skews outcomes further. People who had the privilege of receiving private education are likely to have attended more reputable universities.
With financial status serving as the key determinant of opportunities, young people from poorer backgrounds are becoming increasingly discouraged – a situation that can lead to social unrest. Unless all young people have legitimate prospects of improving their social and economic status, the gap between rich and poor will continue to widen, creating a vicious cycle that will be increasingly difficult to escape.
The good news is that efforts to alleviate youth unemployment will reduce income inequality, and vice versa. The society that emerges will be more stable, unified, and prosperous – an outcome in which everyone, rich or poor, has a stake.
Below is a video from the BBC that they refer to in their article.