Zachary Fillingham in The Geopolitical Monitor, 20 October 2012
Nearly three years removed from the onset of the Great Recession, we are now faced with a global economy that has uncoupled itself from the conventional laws of cyclical economics. This impressive feat was accomplished through a combination of quantitative easing and public stimulus, coordinated by various national governments around the world. They accomplished their immediate goal of stemming the tide of global economic contraction, yet no one can be certain as to the extent of their success because of the uncharted economic territory that we find ourselves in; where contradictory economic signs emerge on a daily basis.
But there is one economic indicator that has remained consistently negative since well before 2008- global youth unemployment. This is arguably one of the most important indicators of all given the fact that, historically speaking, high youth unemployment has always been a harbinger of revolution; just ask the Hosni Mubarak or any other politician on the wrong side of the Arab Spring.
It’s not only Arab Spring countries that are facing the problem of youth unemployment. Just about every quantitative measure available indicates that youth unemployment is a big problem all over the world, and it’s only getting worse. According to the UN’s International Labor Office (ILO), the global youth unemployment rate has maintained its 2009 peak-level of 12.6 percent through 2011, which equates to nearly 75 million unemployed youths (aged 15-24) worldwide.
Some regions bear a heavier burden than others. The Middle East and North Africa have the highest rates of youth unemployment at 26.5 and 27.9 percent respectively, and East Asia boasts a relatively low rate of 9 percent. However, there is a tendency across all regions for the youth unemployment rate to be higher than the adult rate. Even with the ostensibly positive example of East Asia, youths are three times more likely to be unemployed than adults.
Some organizations have taken exception with the ILO numbers, notably the BBC, arguing that the overall rate is skewed upwards by classifying students as economically inactive, especially since so many young people are going back to school in order to increase their employment potential. While there may be some truth to this argument, there is a considerable body of evidence that indicates many of these students will end up in the ‘unemployed’ column after they graduate anyways. There are also several concomitant issues that don’t even show up in official statistics, such the increasingly highly-skilled competition over unskilled work, workers who are underemployed, and young people who have simply given up their search.
The problem as it exists right now is stifling youth opportunity and creating pockets of instability around the globe, but there is a real risk that youth unemployment could begin to spin out of control in the future. The ILO has projected that the youth unemployment rate will remain steady at around 12.6 percent through 2017. These projections are built on the assumption that global economic growth will stabilize. Given recent signs of slowdown in China and India, the ongoing euro zone crisis, and the ‘fiscal cliff’ that’s looming over the United States; such assumptions may well prove to be misguided.
There will be 100 million young people entering the global workforceevery year for the next ten years. In 2011, six million new university graduates began their job search in China alone. It would be foolish to assume that the global economy will be able to create enough jobs to absorb these new workers. Their access to opportunity will be blocked by the following three factors:
Fewer jobs are being created. Technological advancements are reducing the role of human labor in the manufacturing process. Simply put, there are fewer and fewer ways to achieve the widespread employment that was once possible via agriculture and later manufacturing, and this trend is being reflected in dropping worldwide population-to-employment ratios from 2005-20112)
Federal governments are hampered in their ability to stimulate job creation via stimulus spending. According to a World Bank report that was just released, federal stimulus spending will be required if 600 million jobs are to be created for young people entering the global workforce in the near future. Judging from the budgetary challenges being faced by European governments, as well as the fiscal reckoning that looms over the United States, this is easier said than done.
The paradox of an infinite economic growth that is fueled by finite resources. The cohort that’s hitting the global job market over the next decade could well begin to feel what Oxford Professor Stephen Emmott has dubbed an ‘unprecedented planetary emergency.’ Or in other words, human population pressures on the planet’s natural resources. The very thing that is required for global growth and thus job creation- an expanding global middle class- is already stretching the planet’s resources to their limits. It thus stands to reason that water scarcity and rising food prices will in turn create a drag on economic growth by eating into household budgets.
These three factors suggest that high levels of youth unemployment are here to stay, a problem that has historically gone hand-in-hand with political instability and revolt. The Arab Spring is just the latest in a long line of historic examples that includes the French Revolution, the fall of the Weimar Republic, Japan’s invasion of China, and the Marxist insurrections throughout Latin America in the 1970s. There is a school of thought that believes a surplus of disaffected, economically marginalized youths contributed in large part to instigating all of these historic upheavals.
The destabilizing dynamic of youth unemployment follows a fairly straightforward logic. Early job opportunities don’t just feed people and give them something to do, they serve to indoctrinate a new generation into embracing the current system. Alternatively, young people who cannot find jobs won’t become invested in the status quo, thus leaving them far more susceptible to competing political or religious worldviews that challenge the very traditional authority that isn’t working for them. Interestingly, studies have shown that job expectations also play a large part in this kind of unrest. The more educated a pool of unemployed youth is, the more likely they are to ferment dissent when they discover that their original expectations of a better life are not going to be realized.
The potential geopolitical repercussions stemming from youth unemployment differ depending on the political institutions of the state in question, so a differentiation should be made between developed and developing countries. There was a marked lack of legitimacy surrounding the authoritarian political institutions of Arab Spring countries, and this allowed a popular movement that was rooted in economic dissatisfaction to engender a political revolution. It’s possible that similar scenarios could play out in developing countries with high numbers of unemployed youths, just as it’s equally possible that their efforts will be channeled towards other activities such as terrorism, crime, or sectarian conflict. Some notable hotspots to monitor in this regard are Iraq, Saudi Arabia, Yemen, Pakistan, Afghanistan, the Philippines, and much of sub-Saharan Africa.
Youth unemployment is also a problem in developed countries, most notably in Europe. Spain recorded a staggering youth unemployment rate of over 46 percent in 2011, and Croatia, Estonia, Ireland, and Slovakia are all dealing with rates that range from 25 to 42 percent.
The potential repercussions of youth unemployment in developed countries are different due to the relative strength of the political institutions involved; sure there may be 1.1 million unemployed young people in the United Kingdom, but that doesn’t necessarily mean that a Britannic Spring is in the cards. Yet they are still detached from the political mainstream, and this detachment can manifest itself in other ways. Research conducted by the Institute of Public Policy Research found that the worst-affected areas in the 2011 London Riots were those with high levels of child poverty and youth unemployment. They also discovered that over 66 percent of the rioters were under the age of 25. This trend is also beginning to show up in Greece and Spain, where youths are taking to the street in protests that display a growing propensity for violence.
But the more immediate threat in the developed world is ideological, as neo-Fascism, xenophobia, and anti-globalization, have always shown themselves to be a natural cognitive fit for disenfranchised youths. In the case of Europe, these political forces rally around the goal of dismantling the EU, which is already the stated mission of both the National Front in France and Golden Dawn in Greece, two extreme-right parties that happen to draw a lot of support from young, male voters. The EU makes for a handy scapegoat, as the free flow of labor and capital that European integration ushered in can easily be portrayed as the Trojan horse that ruined the purity of this or that contrived national nostalgia. But at its core, this is merely an issue of disenfranchised youths turning their backs on the status quo that has not provided them with any route for advancement. To a lesser degree, the same dynamic is at work in the Occupy movement of North America, though in this case it produced starkly different political conclusions.
The problem of worldwide youth unemployment isn’t going away, and as it continues to get more and more pronounced, so too will instability in both the developed and developing world. The list of potential repercussions is as long as it is troubling: revolution, state-collapse, religious fundamentalism, xenophobia, economic protectionism, and so on. But as we saw with the Arab Spring, nobody can say with any certainty when a crisis is going to boil over and change world history forever.
But we can know with absolute certainty that when jobless youths get together in large numbers: it’s best to expect the unexpected.
Zachary Fillingham is a contributor to Geopoliticalmonitor.com