30 March 2012
The future of work in advanced economies remains uncertain, as global unemployment rates remain high. Approximately 40 million workers across advanced economies are unemployed and with many nations still struggling to recover from the most recent recession while facing the risk of a renewed recession, the labor market is not expected to bounce back any time soon.
There are a number of factors contributing to slow growth in the labor market. A recently released report from the McKinsey Global Institute (MGI) discusses five trends that are influencing employment levels and shaping how work is done and jobs are created. The MGI report discusses technology and the changing nature of work, skill mismatches, geographic mismatches, untapped talent, and disparity in income growth as the five factors influencing employment levels and job creation.
Technology has undoubtedly shaped the world we live in today. We are a society constantly in search of the fastest, easiest, most efficient way to do something and that often involves machines, removing the need for people and consequently eliminating jobs.
The needs of employers and the skills of the workforce are increasingly incompatible despite rising educational achievement. In 2011 an MGI survey found that 30 percent of US companies had positions open for more than six months that they could not fill.
Geographic mismatches are an issue because workers with desired skills may be in short supply where companies are hiring, while areas where companies are not hiring may have little to no job creation and the highest unemployment. This issue draws attention the diversity of the labor market and how things like language, culture, varied systems of professional certification, and market structure - advanced versus developing - affect jobs and employment.
The above factors have all had an impact on incomes across advanced economies putting a strain on living standards, financial security, and social stability.
As people move to address these issues, the plight of the Millennial Generation has become of particular interest. They are a large demographic and with more of them entering a stagnant workforce every day, people are watching anxiously to see how the situation unfolds. Overall, the Millennial Generation has managed to make the best out of a global economic crisis and bleak labor market, not letting these dire conditions dictate their ambition, goals, future, or general outlook on life. In reality, the actions of this generation in today’s economy are shaping the market just as much as the market is shaping their lives.
In the United States the average college student today has $24,000 in student debt and lacks the job they felt their degree guaranteed. This is not the first recession, but it is unique in regards to the amount of loans students have taken out to go to college, only to realize that they won’t get the type of job they anticipated or that they won’t get a job at all. It is also a reality that today very few students pursue degrees based on what will land them in the best position professionally and financially. They continue to face the paradigm of graduating without the skills necessary to be hired only to struggle to find an entry-level job where they can acquire the skills necessary to advance professionally.
There is a continuous influx of young adults into the working world, but job creation cannot necessarily keep up with the rate at which the pool of job seekers grows. The United Nations International Labour Organization (ILO) estimates that last year 74.8 million young people between the ages of 15 and 24 faced joblessness, an increase of more than 4 million since 2007. Additoinally, young people are nearly three times as likely as adults to be unemployed and the global youth unemployment rate, at 12.7 percent, remains a full percentage point above the pre-crisis level.
Financial strain has delayed the lives of Millennials, as the beginning of their adult lives has been shaped by the economy. This demographic is unemployed, underpaid, and drowning in student debt, many still live with their parents out of financial necessity, and even more have put marriage, families, and other traditionally coming-of-age activities on the back burner. Things like buying a home, car ownership, or starting a family are good for the economy, but the current economic situation has made it difficult to pursue those things and they are not high on the priority list.
It is actually becoming more common for Millennials to actively determine their own path in life and resist the influence of tradition. Additionally, this generation is the product of an era of innovative technology, increased connectivity, social media, and the like that contribute to a digression from what used to be considered a typical progression of life.
Tina Wells, author of Chasing Youth Culture And Getting It Right, has offered her own predictions on the Millennial Generation and its future. She claims that the recession actually had a number of positive benefits for this generation, allowing them to reevaluate their priorities and focus on what really matters. The economic recession has demanded increased creativity and resourcefulness from this generation, and they have been successful in finding ways to make their lives fulfilling and purposeful in the face of adversity, finding what really matters, and living with the bare necessities.
Barry Schwartz, a psychologist at Swarthmore College has similar opinions about the millennial generation. In this NPR story, he discusses the paradox created by a world of limitless options and as a result very high expectations. “Those days are gone,” he says. Schwartz tells his students that a good job is good enough and that they don’t need to have the best job. “If they can go through their lives looking for and appreciating what's good in their friendships, in their romantic relationships and in their work — even if their work is more modest than it would have been 10 years ago — they can live an incredibly satisfying life that way,” he says.
While some have taken ownership and make the best out of a bad situation, we have also seen global social unrest in youth populations as a result of the financial crisis. From the United States to the Middle East, young people have taken the streets demanding a solution to the job and economic crises from their respective governments. According to the United Nations ILO, the world needs to create 600 million new jobs over the next decade to sustain economic growth and maintain social stability.
The New Yorker article, “The Kid’s are Actually Sort of Alright,” does a great job in painting a realistic picture of the unfortunate situation facing the Millennial Generation while making a solid case for why they will be all right: they have accepted the need to make the best out of limited circumstances.
“Remember how most Americans think this generation will be worse off than the one that preceded it? This generation doesn’t agree. A plurality of young people still think they’ll do better than their parents. Our optimism is surprisingly durable. A large-scale Pew study published in 2010 showed that about 90 percent of us either say that we currently have enough money or will eventually meet our long-term financial goals—we’re more hopeful on that front, in fact, than we were before the recession.”
The global economic recession and plight of Millennials is characterized by the pursuit of a life less focused on fulfilling the aspirations of generations past and more focused on creating a life decided on their own terms, while avoiding a life dictated by an unforgiving economic situation. Millennials have been dealt a tough hand, but resourcefulness and creativity will shine as they continue to overcome financial hardship and professional adversity.