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The Youth Unemployment Bomb

108 points| alexwestholm | 15 years ago |businessweek.com | reply

156 comments

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[+] patio11|15 years ago|reply
I'm most worried not for the numbers as for the corrosive effect long periods of unemployment have on employability. You lose the simple habits which are required for lots of gainful employment, such as "getting up before 9 AM consistently" and "working mostly non-stop for 8 hours a day".

I see this in a lot of these articles where folks will, e.g., claim they applied for 15 jobs in 3 weeks. At some point the new normal for him has become that he works 15 minutes a day or less on his job search. (Relatedly: some days I wonder if the single most effective form of unemployment relief would be teaching people that sending out resumes is for suckers.)

[+] _delirium|15 years ago|reply
(Relatedly: some days I wonder if the single most effective form of unemployment relief would be teaching people that sending out resumes is for suckers.)

The welfare-reform efforts of the past 15-20 years in most western countries have tended to do exactly the opposite, oddly enough. Out of a worry that people were just receiving benefits without really looking for work, you must now demonstrate that you're actively sending out resumes and filling out applications. Some jurisdictions even require you to show up every so often to a center where they help you search job listings and send out resumes.

[+] sp_|15 years ago|reply
This is so true. I have a friend, fresh out of college with a Masters degree in CS from a German university, who has been unemployed for about a year now and in that time he has sent out maybe 10 to 15 applications. I carefully try to nudge him in the right direction by keeping an eye open for job offers that might interest him or by suggesting programming challenges/projects that could improve his skills.

But instead of working on things that could improve his chances to get a job, he just watches TV all day long. If he put in only maybe three hours of open source coding time a day, his chances to score a job should increase tremendously. If you are an unemployed software developer, it is much easier to stay on top of things than in many other professions but in the end you have to have the motivation for it.

[+] vaksel|15 years ago|reply
there aren't that many new jobs added to all the jobs sites every day, so if you limit yourself just to sending resumes within the closest 100 miles, 15 minutes a day can be as much as you can actually spend.

and yes sending resumes isn't as productive as having connections, but a lot of people just don't have that many connections that they can tap to get them a job

[+] mkr-hn|15 years ago|reply
I've been very careful to craft my resume for the job applied for and to only apply for those where I have a shot.

1 interview out of 3 resumes seems like a good rate. I've only sent three, but that's because I realized the economy wasn't getting better any time soon.

"Ran an advice blog" definitely looks better on my resume than "got really good at writing resumes."

I'll start sending them out again once unemployment drops a couple percentage points, but I've made more money from this blog than I would have lost driving around asking for jobs (which is a double digit number, but still meaningful).

I mentioned this here some months ago in a similar thread, and I'm only more sure of the value in doing this now. :)

[+] Alex3917|15 years ago|reply
I think the bigger picture is that at least in the US, most of these people will never get middle class jobs because they just aren't smart enough to really contribute anything.

If unemployment among youths is around 50% or whatever today, then just imagine what it will be in ten years when gas is $8 per gallon and we're facing food shortages. There is simply no way this is going to solve itself without massive government intervention, and I have trouble seeing that happening considering that there has been basically zero progress made by the federal government since I've been alive.

[+] pragmatic|15 years ago|reply
The simple answer is: These kids are training for the wrong jobs. College (in many areas) is a waste. Trade schools (vo-tech) offer a (almost 100%) guarantee of employment.

A trade is a gateway to self employment (once you have your hours in for licensing).

My brother has his master electrician's license in two states. He has more work than he knows what to do with.

I have two friends who recently went back to school (one finishing undergrad business/marketing the other MBA). Their job outlook is _poor_. The market is flooded with people that have _soft_ skills.

Our company is still hiring network technicians. Again a two year degree with _hard_ skill requirements. (Cisco certs, etc).

Tech school is way cheaper than college and your job prospects are good.

[+] mkr-hn|15 years ago|reply
I started on a networking specialist degree (2 year community college) before the economy tanked, and finished just after. I went in figuring I'd be dead before a technology would exist to automate it.

I'm sure I'm right, but I didn't think about how a recession would impact it.

On the plus side, there were endless streams of entry level positions I was well-qualified for before things went south, and I'll probably be able to find a job related to my degree when the economy starts improving.

[+] thedaveoflife|15 years ago|reply
I agree that there are certainly plenty of opportunities presented by developing a technical skill. However the unemployment rate is only 4.5% for the college educated vs 10.7% for high school only and 8.4% for an associate degree/some college. So maybe college is not as much of a waste as you might think.

http://www.bls.gov/news.release/empsit.t04.htm

[+] salemh|15 years ago|reply
http://www.ted.com/talks/mike_rowe_celebrates_dirty_jobs.htm...

I have a few trade's friends, and a few programmer friends (well, one hacker, one QA / side project hacker). The plumber friend makes $50k in this down market, typically $80k at 1-3 years of experience. The hacker / QA make ~50-55k at 2-4 years. Its all relative to your skills and contributions, but, I am only agreeing that you can make "good" money at a trades skill.

[+] ianhawes|15 years ago|reply
Couldn't agree more. I know plenty of people that do masonry, electrical work, etc.. and they're busier than ever.
[+] scotty79|15 years ago|reply
Our wealth has grown exponentially in recent decades but poor people still work 9 to 5 or more.

Wealth is manufactured by machines not people.

Some generation has to close the gap between how wealthy society is and how much average member of society has to work for same basic needs.

You can't make basic necessities cost always nearly same amount of work because that work thanks to technology is producing more and more wealth.

You can't keep prices of meals to be higher than recent technological wonder. Someone at some point will call bullshit on that. "My sandwich is not worth same amount of wealth as 4GB flash thumb drive. They just want me to pay this much for sandwich to keep me working because I need sandwich. I'll just pass on working, buy cheapest food and see how this works out. They don't seem to want me in their companies anyway."

This unemployed generation can be the first one to take advantage of wealth humans get from technology en masse without need to cunningly trick everyone else out of their share. They'll get their share just by being more or less human dead weight that rich won't be able to shake off because they can't kill them or even let them die because there's for the first time too many of them.

[+] jerf|15 years ago|reply
"Our wealth has grown exponentially in recent decades but poor people still work 9 to 5 or more."

Our poor people, at least in the US, are a lot more wealthy than they were several decades ago. Actually if you dig into the economics of deciding how much to work and for what, how preferences vary depending on how much of a resource you have and how cheap a lot of things are compared to decades ago, this is neither surprising nor terrible, nor really even preventable without actually going down to these people and dictating their economic preferences and proper lifestyle to them, which I at least find a repugnant idea.

If you want to live a simple life with nothing from beyond 1950, no modern medicine, no modern tech gadgets, nothing beyond 1950, you can do it substantially cheaper. But it's just so easy to work a few more hours and get the modern stuff that it's the rare person who will choose to do this.

If there's anything to be horrified by, it would be the cheapening of debt that has made it too easy to get buried under it vs. decades past.

[+] yummyfajitas|15 years ago|reply
Our wealth has grown exponentially in recent decades but poor people still work 9 to 5 or more.

This is a myth. The poor work very little - their full time labor force participation rate is only 10% or so (this includes both the employed and unemployed). 80% of the poor don't work at all.

http://www.bls.gov/cps/cpswp2007.pdf

(Before you criticize this statistic as being too simple, go see this thread where I answer many objections: http://news.ycombinator.com/item?id=2129845

In particular, this is not a result of the poor being disproportionately old or young.)

[+] Tichy|15 years ago|reply
I expect in the future a lot of people will be employed in computer games. It would not be so different from working for Disney World.

Not sure how many support people Blizzard has, but it is a shame that doing real business is usually outlawed in most MMORPGs.

[+] bambax|15 years ago|reply
> But the failure to launch has serious consequences for society—as Egypt's Mubarak and Tunisia's overthrown President, Zine al-Abidine Ben Ali, discovered.

Mmm, what? Don't make it sound like overturning dictators is a bad thing, dude.

Maybe it's much better for "society" to have unemployed young people with not only the courage to fight for freedom but also nothing better to do with their time, than to have people with jobs who tolerate authoritarianism.

[+] kjhgfdfgh|15 years ago|reply
The trouble is that they might get confused between overthrowing our stalwart allies in the war against terrorism like Mubarek and start thinking that there is no real difference between a dictator for life and a government that relects the same group of millionaire business leaders every year or one where the same bunch of toffs from the same few fancy schools get to be in charge.
[+] wisty|15 years ago|reply
I've spoken to a few Chinese about this, where manual workers get more than uni grads (though not as much as successful business owners). Chinese really value education (in the high culture sense), and education (in the sense of meaningless test scores), money, and status. Until a few years ago, degrees were a ticket to riches. Now, they just mean you are overqualified for higher-paying jobs. Their feelings about it tend to be extremely complicated.
[+] ylem|15 years ago|reply
I think that you see this in places like Spain as well--you have a large educated, unemployed fraction of the population...
[+] iamdave|15 years ago|reply
I grew up with an ex-drill sergeant for a father. My dad was a skilled carpenter, a certified electrician and welder (TIG, MIG and Stick), and has fixed every single car I've owned and totalled.

Passed down to myself and my brothers, we're both skilled in welding, my brother now has his own electrician shop. I work in IT. If suddenly my IT job goes away, I have a trade to fall on.

Skilled trades and physical labor it seems to be lost arts on my generation (I'm 25) and that depresses me.

[+] tannerburson|15 years ago|reply
Move out of the city. In the more rural areas that isn't as true. It's definitely trending in that direction, but there are still a lot of kids who grow up with parents in skilled trades who pick up a lot of those skills growing up. Combine that with high schools that have legitimate trades programs, and there's at least a much better opportunity.
[+] andresmh|15 years ago|reply
In Mexico they are called nini's (_ni_ estudian, _ni_ trabajan). They often find "better" opportunities joining organized crime/drug cartels. This, in my opinion, is one the main challenges that need to be resolve in order to end violence in Mexico.
[+] netmau5|15 years ago|reply
They mention the product lifecycle being short as a primary reason for not wanting to bring on new employees. If it takes someone 12 months to get up to speed in an 18 month product lifecycle, it is too costly.

I've got to wonder what kind of industry takes 12 months to get up to speed unless you've got workers coming in with absolutely no training and education. For most programmers I know, the worst case ramp up time is around 3 months. That is often with a project that will never be profitable, much less make it for 18 months.

There are other fiscally attractive reasons to hire young so I'd think if training was the only problem, we could solve that problem. The problem I see with regards to education in most companies is that there is simply no one on staff who can do the training effectively or is given the time to do so. Perhaps this will open the door for the return of a mini trade school in the form of an app.

[+] redrobot5050|15 years ago|reply
Hardware engineering can easily be 12 months out of 18. There are a sundry of reasons:

a) Moore's law. The technology your school is using for hardware design is easily 5-6 or 10 years out of date. This makes it easier to teach and cheaper to work on, but the "real world issues" like heat, leakage current, etc just aren't addressed at the same level.

b) Intel has its own RTL that is not taught in schools. Some technology companies also have proprietary in-house technologies (like Cachet, or Wasabi).

c) Ripple effects. Analog components might change/fluctuate and this impacts the entire design. Or a new antenna placement might merit new design, etc.

d) Scale. An undergrad in hardware engineering typically builds a 5 stage pipeline processor that supports 2-4 hardware interrupts and a memory controller. This is enough to run linux on an FPGA. You've engineered a computer! But a Core 2 Duo has 23 pipeline stages. Vector units. Out of Order execution. 96% accurate branch predictor. Each one of those things I've mentioned could be the focus of a masters or PhD thesis. Getting hired, you'd be expected to pick up the logic of all of them in about six months.

e) Minimization. More systems are being done by less chips. This is what is called System-On-A-Chip design by some. Previously, you'd need to know how to design a CPU. Now you need to know how to integrate a CCD into the CPU.

This is off the top of my head but i'm sure you get the point.

[+] ylem|15 years ago|reply
I think one thing that we have in the US is that unemployment centers were set up in a different age and are designed to serve unskilled labor--but there are not so many unskilled jobs. Some of the training programs that are paid for are short "certificate" programs of dubious worth.

But, here's a question: currently sites like ODesk provide contract labor. Some of the jobs are for people to do research (for example, I wanted a listing of high schools/contact information for a side project I'm working on). I've only done a couple of postings, but I got very few American applicants. Is it just not well publicized? The rates are low, so it's not a good long term solution, but in some cases for "simple" research jobs, the rates could be $10/hr, which compared to some service jobs is competitive (since many service jobs here also don't provide health care)--especially in some lower cost of living states.

[+] rst|15 years ago|reply
One key bit: "more education is not always better. What matters is matching the skills of the workforce to the skills that employers demand. In Iran, where the percentage of people aged 15 and over with postsecondary degrees has soared from 2.5 percent to 10.5 percent over the past 20 years, the education system has become 'a giant diploma mill,' says Djavad Salehi-Isfahani, an economist at Virginia Tech."

The same is true here, as many of our chronically "overqualified" unemployed could attest. What's worse, some of what counts as "training" here is a set of dubious commercial vocational schools --- cosmetology schools, and the like --- which soak up student loans, and leave the trainees with large debts that are hard to dismiss, even in bankruptcy.

(And these are pretty big business. One of them, Kaplan, is a wholly owned subsidiary of the Washington Post corporation that has over $2 billion in revenue, accounts for just about all of the parent corporation's profits. Not without controversy by the way; reports of abusive practices from Kaplan have led to allegations of fraud: http://www.nytimes.com/2010/11/10/education/10kaplan.html The Washington Post, of course, has editorialized in favor of its baby.)

[+] ylem|15 years ago|reply
This would seem to be especially true of "for profit" colleges. There was a pretty depressing tv special (frontline?) on it...They sell hopes and dreams.
[+] kiba|15 years ago|reply
It's time for youth to blaze new path to employment.

19 years old like me are trying to build a living on the internet by writing, programming, and selling ads. It's a lot of hard work to find clients and more scary when you're trying to deliver the work.

[+] bsaunder|15 years ago|reply
Buy an Arduino and start building robots. IMHO, there's a long, rewarding career there.
[+] DrJokepu|15 years ago|reply
The fact is than even the educated kids are unemployable. We constantly try to hire graduate developers here in London but the fact is that most of those kids are simply unemployable. They have impressive degrees from the best universities, but I simply can't hire someone who can't code a simple Fibonacci algorithm at the whiteboard in the interview room. In the language of their choice. I'd even accept an only marginally working solution with a few bugs. Still, most of them just can't do it. They don't even know how to start.

Universities simply don't prepare kids for the needs of the industry. After 3-5 years of higher education, many of the graduates can't solve even the most basic programming problems. I suspect that this must be the case in other professions as well. Something has to be done about the completely defective higher education systems.

[+] mkr-hn|15 years ago|reply
I was fortunate in community college because the instructor for my major (Linux admin) liked to spend large parts of class time telling stories from working in the IT industry.

Many interesting stories from dealing with MS audits in a mixed source environment.

The most interesting classes were those where he had us solve a real world problem (like researching and preparing an executive summary for a purchase).

Or the time he mangled all the computers while we were on break and had us troubleshoot them.

[+] tomjen3|15 years ago|reply

    fib a b 1 = 1
    fib a b 0 = 0
    fib a b n = (fib a b (n - 1)) + (fib a b (n -2))
Where do I send my CV (I always loved London).
[+] tastybites|15 years ago|reply
Universities simply don't prepare kids for the needs of the industry.

I've been working in industry for over 10 years and the only time I've ever had to write a fibonacci sequence generator was during a code challenge (that lead to an interview).

[+] Tycho|15 years ago|reply
Luckily the soil is fertile: All over the world, the hittistes and shabab atileen, NEETs and freeters and boomerang kids are hungry for a chance to thrive.

Hmm, but how hungry? Compared to say people who came of age in the 40s or 50s? I'm not sure hungry is the right word. Restless maybe. Peckish.

[+] _delirium|15 years ago|reply
The Americans at least that I know who came of age in the 50s as anything close to middle-class weren't very hungry at all. They lived in a world of corporate jobs for life, defined-benefit pensions, comprehensive employer-provided health-care with no deductibles/copays/exclusions, low unemployment, etc. Even blue-collar workers had quite strong unions, high pay, and great pensions/healthcare in the 50s.

Granted, if you meant coming of age in 1947 in Poland, that'd be another matter.

[+] jhamburger|15 years ago|reply
Do you have anything substantial behind this or is it just general "worst generation ever" talk?
[+] throw02082011|15 years ago|reply
Jason Calacanis? Is that you???

Part of the problem is cheaper young workers are laid off to keep fatcat management of an older generation. The workers remaining at the company then get "more productive." Fire the old and bring in 2 young workers(or more) for each of their salaries and things get much better.

[+] jderick|15 years ago|reply
The government should create jobs to solve this problem. Unemployment is cruel and inefficient. Prioritizing reducing the national debt over employment is short sighted.
[+] ngvrnd|15 years ago|reply
Things which cannot continue, won't.
[+] rorrr|15 years ago|reply
Anther problem is the education that people choose. The world is full of "VCR repairmen", while everyone is using disposable bluray players.

I see it again and again, students pick silly, simple or just useless degrees, such as

    * philosophy
    * international relations (every single one of those wants to work for the UN, maybe 0.001% ends up there).
    * arts, all kinds
    * history (how many historians do we really need)
Don't get me wrong, they are interesting and entertaining, but just not very helpful when it comes to being employable.
[+] mikecarlucci|15 years ago|reply
Not to troll, but Thomas Jefferson, Ben Franklin, Leonardo DaVinci etc. were all technical people with understanding of philosophy, art, history, mathematics. Obviously these are cherry-picked examples, but having only technical knowledge isn't a great solution either.
[+] sedachv|15 years ago|reply
History, philosophy and international relations undergrad degrees are all great ways to prepare to go into law or business school professional programs.

There are people that go into them for "silly" reasons, and there are people that go into them that come from upper-class backgrounds where being bankrolled by your parents while doing an international relations degree at a private university and spending time at unpaid internships in cities with high cost of living is a status symbol and a way to weed out the lower class from certain career tracks.

[+] jkeel|15 years ago|reply
I' also add that these may seem "silly" on the cover but can be put to good use later on. I've known several successful managers (including our current Director) who have their undergrad degree in philosophy, albeit coupled with an MBA.

Generally, I think the more well rounded a person is they can usually lead a more successful (fulfilling) life.

[+] ahoyhere|15 years ago|reply
I'm sure many people who are unemployed are unemployed through no fault of their own. But...

... the other day I checked out a site for finding tech/design-oriented interns. There were 50 listed in my city (Philadelphia)... and most of the eye-catching descriptions the interns had written for themselves were things like:

* "Coming soon"

* "19 years old"

* "I'm a recent graduate of the University of Miami"

* "My name is Brittany"

* "My name is [redacted] and I am a 19-year-old Korean-American student."

This was the only part of the profile that was really custom to them, other than checking off a list of skills & available times/dates.

Don't even get me started on the usernames they chose to present to potential employers. (Musicbabi_87?!)

Their chances are pretty much zero. Obviously nobody taught these kids (and, in a few cases, adults) anything at all about professionalism or the fact that when they take a job, their job is to serve the employer. And they obviously haven't been reading books on their own that would teach them that.

Only a precious few mentioned anything that would tell me what I'd get out of the deal, how they could help me/be useful to me. Almost none even expressed any interests or goals of their own.

So, obviously, I'm not hiring any of them -- when I would have liked to. They got in their own way. This is, sadly, their fault.