Home > The Economy, unemployment > Young, educated, and jobless in America?

Young, educated, and jobless in America?

from John Schmitt

The New York Times has a piece by Steven Erlanger on the “Young, Educated and Jobless in France” that gets most of the facts right, but still might leave its readers with the wrong idea about the real labor-market challenges facing Europe and the United States.

The story focuses on the plight of young, college graduates in France (and several other European countries) who have been unable to find work despite their college degrees and other post-secondary training. 

The initial focus is on young people (15-29 year olds) who are unemployed. But, many young people are still in school, which can make interpreting official unemployment rates tricky. (For a discussion of why this is the case, see this article that David Howell and I wrote for The American Prospect back in 2006.)

Erlanger doesn’t acknowledge the problems with the unemployment rate when applied to young people, but he does introduce a much better measure of labor-market performance for young people, the NEET:

“[In addition to the unemployed] There is another category: those who are ‘not in employment, education or training,’ or NEETs, as the Organization for Economic Cooperation and Development calls them.”

The idea is that, from a societal point of view, we might be just as happy — even happier — if young people are in training, college, or graduate school rather than in work.

The NEET tells us in one number just how many young people are disconnected from both work and school (including training programs). As the NYT notes:

“In Spain … 23.7 percent of those 15 to 29 have simply given up [on school or work] … In France, it’s 16.7 percent — nearly two million young people who have given up; in Italy, 20.5 percent.”

The piece attributes these high rates to the “euro crisis” — though my colleague Dean Baker takes Erlanger to task on exactly what he seems to mean by that.

More broadly, though, the problem, the NYT argues, is “a failure of the system,” which has as its key features: “an elitist educational tradition that does not integrate graduates into the work force, a rigid labor market that is hard to enter, and a tax system that makes it expensive for companies to hire full-time employees and both difficult and expensive to lay them off.”

But, wouldn’t it be useful for NYT readers to know how the United States compares? The NEET numbers cited in the story are OECD calculations for 2010. For the same year, the same source puts the figure for the United States at 16.1 percent — not far from France (16.7 percent), which the piece paints as suffering through a “growing problem” common to “other low-growth countries of Europe.”

If NYT readers knew the U.S. NEET rate, they would be able to ask why the rates here are so close to those in France even though we don’t have a euro crisis, or apparently, “an elitist educational tradition,” or rigid European-style labor markets, or high European-style taxes, or strong European-style job protection laws.

And, wouldn’t it be useful to know if other European countries are faring any better? The same OECD data also show some EU countries are outperforming the United States. The NEET rate in Germany, for example, is only 12.0 percent; in Denmark, 10.5 percent; in the Netherlands, 7.2 percent. Compared with the United States, all three have highly regulated labor markets, high unionization rates, and high taxes. How have they managed to provide better opportunities for their young people than France and the United States?

(This post originally appeared at the CEPR blog.)

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Categories: The Economy, unemployment
  1. ezra abrams
    December 7, 2012 at 4:57 pm | #1

    outstanding

  2. December 7, 2012 at 7:19 pm | #2

    Un-engaged young people are a ticking time bomb and people with tunnel vision running the system will ultimately pay the price for ignoring the problem. Regrettably, so will the young people and the rest of us too.

    • Randel
      December 7, 2012 at 9:30 pm | #3

      Helge, you are so right. We have seen it happen before in Spain, England, and elsewhere around the world. Bit when profit is the driving factor of all decision making we are doomed to repeat the lack of foresight.

  3. Joan
    December 25, 2012 at 12:51 pm | #4

    Check out the Studentdebtcrisis.com link folks! You will see the rest of the story…. and go chat with those at Forgivestudentloandebt FB page. You will hear what has been happening and the FACTS straight from the horses mouth. WE have a predatory, dysfunctional system, and it is predicated by greed and Bought politicians. The time for change has arrived.

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