Unemployment and Generation Y: Change Will Come Sooner or Later
What is the economic and cultural course of prolonged youth unemployment in the US?
I. Is the government trying to keep young Americans unemployed?
A MarketWatch article written by former chief economist for the Department of Labor Diana Furchtgott-Roth discussed youth unemployment and how the "government is doing everything it can" to keep young Americans unemployed. Through policies, including raising the minimum wage, requiring that companies pay for health care and discouraging unpaid internships, Furchtgott-Roth argued that the government is making labor more costly and preventing young workers from entering the labor force.
Per Furchtgott-Roth's analysis, "We should not be surprised at the rise in youth unemployment, an increase that is altering the fabric of society." Furchtgott-Roth went so far as to suggest that the situation is a "tragedy" in restricting young Americans from being able to work. From the article: "If young people can't get a foot on the first rung of the career ladder, how can they get to the second? Or the third? Or, one day, the corner office?"
Furchtgott-Roth's analysis sheds due light on an uncomfortable reality in the current American job market. Excessive bureaucracy and regulations seem to fetter firms' hiring abilities and compromise a citizen's ability to be a productive member in society. In other words, too much bureaucracy can be counter-productive and can restrict young individuals' occupational mobility.
II. The prospect of a global jobless bubble for young people.
Along this same line of thought, MarketWatch's Paul B. Farrell recently discussed "10 explosive bubbles that will kill capitalism". Among the 10 bubbles, Farrell discussed a "global jobless bubble." Farrell cited TIME Magazine in that the global jobless predicament is "bigger than [the] Arab Spring and [Occupy Wall Street]." Farrell added, "Governments are warned: Figure out 'how to get [young people] jobs before they become unemployable -- and erupt in fury." Referencing remarks from British investor Jeremy Grantham regarding capitalism's inherent flaws, Farrell wrote that "if Grantham's right, governments won't act till it's too late, and anticapitalism revolutions sweep the planet."
In discussing bubbles that portend doom for capitalism, Farrell also discussed income inequality and "debt-ridden college grads selling burgers, lattes". In this way, issues with youth unemployment would appear to pervade throughout a society and work to define a society's emerging culture. Youth unemployment may be as much a cultural issue as an economic one. Even so, youth unemployment is merely a part of a much bigger economic conundrum.
III. Generation Y or Generation Why Bother?
The cultural core of prolonged youth unemployment portends much more than merely societal malaise. In March 2012, Todd Buchholz and Victoria Buchholz discussed in the New York Times how "Generation Y has become Generation Why Bother." From the article: "The Great Recession and the still weak economy make the trend toward risk aversion worse. Children raised during recessions ultimately take fewer risks with their investments and their jobs. Even when the recession passes, they don't strive as hard to find new jobs, and they hang on to lousy jobs longer."
Even further, the authors suggest that "kids who grow up during tough economic times also tend to believe that luck plays a bigger role in their success, which breeds complacency.' UCLA's Paola Giuliano commented that individuals raised during tough economic times are "less entrepreneurial and less willing to leave home because they believe that luck counts more than effort."
Even in light of complacency and tough economic times, is Generation Y really "Generation Why Bother"? A recent article published in the Huffington Post written by Meredith Bennett-Smith suggested that perhaps the label "Generation Why Bother" needs another look. According to Clark University research professor Jeffrey Jensen Arnett, members of Generation Y are "said to be lazy ... 75 percent [of Generation Y] said they're trying to be independent and don't like relying on their parents, even though most of them need to for most of their twenties."
With respect to criticism of Generation Y in that young Americans today are lazy, sedentary, and risk-averse, Arnett noted that "part of the answer is that it does take longer to grow up than it used to, to finish your education, to find a stable job, to get married and have a first job."; Arnett continued, "I think the baby boomers and other older adults look at emerging adults and say, 'There must be something wrong with them. They're not doing these things when I was doing them, and therefore, they're lazy. They're stupid.'"; Even so, Arnett suggested that older Americans are comparing young people "to a standard that really is obsolete and really not fair anymore."
Whereas one might argue that Generation Y is sedentary and not willing to move, RealClearPolitics' Robert Samuelson recently commented how "[g]etting a job has been time-consuming and often futile." In light of future costs of providing for aging Americans, Samuelson noted that Generation Y can be labeled "generation squeezed."
IV. Might some form of economic collapse be the solution?
Whether one believes that Generation Y is lazy and sedentary or has merely fallen into an unfortunate socio-economic situation, young Americans can find resolve in the fact that "this too shall pass". Something that may be overlooked with respect to discussions on the economic situation of young Americans is the fact that at some point, the younger generation of today will have political power to make important decisions. Any anger, apathy, and frustration on the part of younger Americans today could very well translate into substantive policy decisions in the decades to come. In this way, there may be reason to believe that younger Americans do not have to be worried about perpetual unemployment without end. At some point, all things come to an end one way or another - even socio-economic adversity.
That being said, what may concern the older generations and the generation in power today is the fact that current youth unemployment will most likely have long-lasting effects on not only America's economic standing, but also America's cultural standing. Per Peter Miller's recent analysis, "a recent study showed that nearly 40% of Millennials would rather have no job at all than a job they didn't like." Given the fact that so many young Americans find themselves unemployed or underemployed with excessive student loan debt owing to the higher education bubble, one might glean a subtle perspective that views some form of economic collapse in a good light. This is to suggest that from a frustrated, struggling young individual's perspective, perhaps economic collapse is the solution, not the problem.
The idea that economic collapse is the "solution" and not the problem may sound far-fetched, but one has to keep in mind the perspective of a young, single individual with no children struggling to get on his or her feet, unemployed or underemployed, and trying to deal with student loans. Charles Hugh Smith actually explored this idea in a post on Zero Hedge in June 2012. From the article: "We're like a sprawling family bickering over the inheritance: we'll keep arguing over who deserves what until the inheritance is gone. That will trigger one final outburst of finger-pointing, resentment and betrayal, and then we'll go do something else to get by. The solution' is thus collapse... as only collapse will force everyone to go do something more sustainable to get by."
One can think of this idea in terms of the economy being like a boardgame. Once the prospect of continuing to play the game appears disadvantageous for a critical number of the players, individuals simply refuse to continue playing, and the game ends. Life goes on, and everyone goes and does something else, finding some other way to spend their time.
As the contemporary economic game would appear to be rigged against younger Americans in light of Social Security, unemployment, and student loans, the danger comes as the youthful side of the collective consciousness begins to weigh the prospect that economic collapse is more advantageous than the status quo. An economic collapse in this sense need not entail some post-apocalyptic Mad Max or Book of Eli environment. Rather, this sort of economic collapse would likely entail a substantive restructuring of contemporary societal institutions and a cultural reevaluation of values. Arguably, we are already starting to see this. What such an economic collapse portends in terms of socio-cultural changes remains uncertain.
V. The bottom line.
The bottom line is that at some point, time will pass and the younger generation today will become the older generation in a position of political power in the future. In this way, the current predicament ought to entail a national discussion on cultural values and perspectives towards wealth, labor, and retirement. If one can concede that the status quo is economically unsustainable, then the next logical step is to concede that at some point, things will have to change and we ought to start preparing ourselves and our children for such change.
Young Americans may find inspiration in stories such as those coming out of Spain. MarketWatch's Barbara Kollmeyer discussed on Aug. 3, 2012 how Spain is experiencing a miniboom in entrepreneurship. From the article: "Spaniards remain in a state of shock about the economy but are slowly waking up to the reality that they will have to get more involved in their own job creation, especially the country's youth population, with 53% of the country's under-25 population jobless as of June."
Thus, the question of unemployment woes and adversity for younger generations within a nation is tied to that nation's cultural development. As a country's economy fails, so too that country's cultural underpinnings fail and the social fabric is torn. The question then arises, in what kind of country do US citizens want to live? What kind of national culture do they want to foster?
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.