"Two things make the problem more pressing now. The
financial crisis and its aftermath had an unusually big effect on them.
Many employers sack the newest hires first, so a recession raises youth
joblessness disproportionately. The number of young people out of work
in the OECD is almost a third higher than in 2007. Second, the emerging
economies that have the largest and fastest-growing populations of young
people also have the worst-run labour markets.
Why is this so important? A number of studies have
found that people who begin their careers without work are likely to
have lower wages and greater odds of future joblessness than those who
don’t. A wage penalty of up to 20%, lasting for around 20 years, is common.
The scarring seems to worsen fast with the length of joblessness and is
handed down to the next generation, too - leading to a vicious cycle
that weighs on growth dramatically.
Countries with the lowest youth jobless rates have a close relationship between education and work.
Germany has a long tradition of high-quality vocational education and
apprenticeships, which in recent years have helped it reduce youth
unemployment despite only modest growth. Countries with high youth
unemployment are short of such links."
One thing that helped the US after World War II was the GI bill that made it easy for returning soldiers to go right into school and get working skills. We should be investing in our population rather than trying to squeeze the life out of our economies.