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Thursday, 25 October 2012

Possible implications of youth unemployment in Europe

(Chart Courtesy: The Atlantic, Oct 2, 2012)

Guest Post by Emma Davis

Global youth unemployment has been a major issue that has been haunting the world and Europe in particular even before the year 2008 and it is showing no signs of improvement.

March 2012 has had to witness a sorry state of affairs in Spain and Greece. The youth below twenty five years of age that were unemployed had crossed the fifty percent figure in these two nations; the news sending a frisson of alarm in all parts of Europe and the world as well, as it threatened to add fuel to the already burning issues of the Eurozone Debt Crisis in determining the weak state of the economy in the countries.
The situation as of today has worsened as per the latest report from Eurostat, which states that the number of unemployed youths increased in the period from March to September; with Greece topping the list in the entire continent by an alarming increase of ten percentage points. 55% and 53% respectively are the distressing figures that Spain and Greece are presently grappling with in terms of the problem of youth unemployment.

The graph above depicts the percentage of youth unemployment in European nations in the summers of 2011 and 2012 and compares the same with that in the U.S.

As per the graph, there is a dearth in the job sector for the youth in Greece and Spain. This seriously bodes impending doom in the countries, not only on the economic but also on the social and the political front. There is danger of many of the youths there becoming disillusioned about their present condition and it may be reason enough for them to leave their respective countries; searching for new avenues in other affluent nations where they can land jobs in an easier manner and without hassles.

Another serious implication of the setback in the employment sector in the European countries is that it may result in youth unrest and becoming dissatisfied with the present scenario; they may resort to participating in illegal or violent activities as a means of protest against the existing national policies on various issues that threaten to affect their means of living.

Every year millions of young people in the European countries enthusiastically complete their studies; entrepreneurships; trainings, etc. and look out for jobs with great expectations. Unfortunately, success does not knock on the doors of many despite innumerable efforts. Resultantly, they inadvertently start blaming the system for their failures and ill—opportunities. Technology has advanced so rapidly that there have been cuts in the human- labor front. Thus jobs in these fields; i.e. manufacturing and agriculture are decreasing day by day. With lesser jobs being made available to comparatively large number of youths, the imbalance is a stark statement that the availability of jobs will decline continuously.

In order to create jobs, there will be need for stimulus spending by the federal government; but the European government is gripped by budgetary challenges at present, which puts restrictions on the ease with which the above can be brought about. When youth opportunity is thus hampered, it is bound to create a sense of instability amongst them. It is not helped by the fact that there have been indicating factors pointing out to economic slowdown in the manufacturing leaders China and India and the fiscal cliff that threatens the U.S. economy. How can the global economy be restored to normalcy under such conditions? And if the economy does not recover, there is grave danger that the problem of youth unemployment will steeply intensify and the repercussions could be ominous.
Bio: Emma Davis is staff editor & writer at which is based in New York. InvestmentContrarians is a daily publisher of contrarian investing newsletter, know more about Contrarian Investing
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