Are the youth losing confidence in free market?
The world was never so young. The population in the age group of 15 to 24 is the largest ever at 1.2 billion. Arguably, it is not a demographic dividend but a windfall. Meanwhile, there is no ebb in protests across continents and economic spectrum under the leadership of the young. From Tunisia to the US, 2011 was a year of protests and these continue in 2012. Most of these protests revolve around demands that do not hint of a dividend. Though protesters are demanding basic freedom in many places, there is one overarching issue: economic security, or simply put, employment. Their voices seek something more than jobs; they ask questions about the prevailing growth model and socio-economic justice. Termed as the generation that has seen development model based on free market articulated in terms of GDP growth and often considered as the fierce champion of this model, this is unsettling.
Small wonder that the 101st session of the International Labour Organisation (ILO) in the intervening fortnight of May-June was besieged by uncomfortable debates on this matter. It couldn’t be just unemployment? After discussions, two reasons emerged: the world is losing its demographic dividend, and, because of this, the champions of free market may not be confident of the model’s sustainability. The continuing recession in the US and the precipitating European crisis provide the perfect background for experts to sense a definite discomfort with the current development model.
ILO’s latest report, The youth employment crisis: Time for action, points out serious concerns over job security in the future. It says that youth labour force participation rate reduced from 52.9 to 48.7 per cent between 2000 and 2011. During the same period, only 16 million jobs were created for young people. In 2011, four of 10 unemployed persons were youngsters. Instead of a clinical diagnostic of general unemployment, ILO has done a critical review of these figures. Comparing the current young employment crisis to that of the Great Depression, ILO says, “There have been serious financial crises, none have been as deep, prolonged, and globally contagious as the current crisis.” The current unemployment phase has continued for so long that it would impact the youngsters’ employability as they remain detached from the labour market. It hints that the crisis will linger, maybe till such time when one will have to rethink the current development model.
Does this mean the demographic dividend is running out? It surely is for the developed countries as they have crossed that phase. But developing countries, like India, which are being rewarded with this dividend will not be able to milk it. More than 90 per cent of world’s young population is in the developing world. The dividend is of use only when the country encashes it with employment opportunities. All indications point that developing countries, affected by global economic slowdown, will not be able to come out of the unemployment trap.
Going by the ILO report the dividend will continue till 2060. But here lies the problem. Many regions in the world are already experiencing deceleration in young population in ratio to the overall population. “This is a clear sign that at the aggregate level, the world is approaching the final stage of demographic transition, typically labelled as ‘population ageing’,” observes ILO. So, there is not much time left for the developing countries to use the dividend.
The unemployment crisis, however, is now being treated as an impeccable sign of the economy’s failure in sustaining economic security, which in the current context means job security. Experts interpret the growing unrest among youth as a sign of losing confidence in the current system. This indicates the current generation is not sure whether the future ones will have the same security, which brings in the raging issue of inter-generation equality. Such is the fear among experts and economists that the ILO report says, “The youth employment crisis, in all its manifestations, is not merely a transitory development related to sluggish economic growth, but it may become a structural trend if no significant policy changes are put in place.” While we talk about double-dip recession, the debate over the growth model and its viability is intensifying. In India, we have used the demographic dividend and the domestic market as the excuses (to some extent) to tide over the global crisis. But now since these advantages threaten to turn into disadvantages, we are in for serious challenges.
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