The protests against Wall Street, which are now north on Bay Street, are too easily dismissed as “rent-a-rabble,” the predictable social aftershocks of a financial crisis-turned-recession, which is now a fiscal crisis in the U.S. and elsewhere. Similar protests have taken place across Europe. Some even turned horribly violent as in London this past summer.
The North American version of this movement is directed at the financial community, which is seen as the culprit and undeserved winner of this crisis. Government bailouts have not been accompanied by reductions in executive pay and end-of-year bonuses. The rich still pay fewer taxes than the middle class or the poor, as Warren Buffett, one of the world’s richest men, has gone to great pains to point out.
Bankers and investors are never popular even at the best of times. From Shakespeare’s Shylock in the Elizabethan era to the present, they have been the object of public ridicule and scorn. However, Canadian banks and investment houses weathered the recent financial storm and economic downturn without government handouts so protestors will have a harder time pressing their case here.
Even so, we must be attentive to the deeper roots of this rage. Our homegrown (and perhaps tepid) variety of the Western “Arab Spring” is symptomatic of a much deeper structural problem that is pervasive throughout the world’s advanced industrial economies — chronic unemployment among our youth.
North America’s unemployment problem is going to be prolonged as it is in many OECD countries. It is not just because of the cyclical aspects of the business cycle but also because of the structural mismatch between those jobs that are available and finding people with the right skill sets to fill them.
The reason for this is that educated, low-cost skilled labor in emerging economies (e.g., China, India, Vietnam, and Mexico) is bleeding jobs from the north. As the Economist pointed out recently, even the financial services sector, which is still largely concentrated in G7 countries, is not immune to this downsizing trend as skilled jobs even in advanced service industries move south.[1] Protestors on Wall Street or Bay Street should scrutinize their own ranks. They might find a laid-off investment banker or financial adviser within them.
In many OECD countries, the chronically unemployed account for almost half of those without jobs. Almost one-fifth of those unemployed are in the ranks of youth and youth unemployment is on the rise. Even more troubling is that fact many of those in the 15-24 youth age bracket are neither in education nor in employment or training programs.[2]
The numbers are truly staggering. There are 16.7 million young people in OECD countries who are “disconnected” from both the educational system and labour markets. Almost 7 million of them are looking for work. The remainder have simply given up.
As we are seeing right now in Canada, a general Bachelor of Arts degree won’t cut it in our increasingly high-tech, knowledge-driven economy. You need a science or engineering degree to get past the front door. This is also true for other sectors, like extractive industries or forestry, where years ago a high-school degree got you a well-paying job. Not now.
Fortunately, Canada has the lowest unemployment rate in the OECD. We also do a better job than most countries in educating, training, and employing our youth. However, we should not be complacent. The percentage of unemployed youth (15-24 years old) in Canada rose from 12.7% in 2000 to 14.8% in 2010. In the US, the corresponding figures jumped from 9.3% to 18.4%. If there is another major economic downturn, these numbers will certainly rise.
There is no simple answer to the challenge of chronic unemployment and the structural mismatch in our labor markets. However, it is going to take real leadership from our politicians, business leaders, and senior educators to address it. This is not the time to point fingers or pass the buck.
First, there is a real role for the private sector to work with government to retool the skills of those who are unemployed.
Second, education and training programs should be targeted to those sectors of the economy where there are jobs and which will be the drivers of future economic growth and innovation. Energy, natural resources, aerospace, information technology (IT), financial services, large-scale construction, and transportation are among them.
Our challenge is not to try to compete with emerging markets in those sectors where we are uncompetitive and jobs have already been lost. It is to reposition our work force and target our education dollars and training programs to those areas where employment will be found when the economy rebounds. Canada’s future in a fast-changing, global economy depends on building the next generation of workers so that we do not confront our own “Arab Spring.”
Origin
Source: iPolitico
The North American version of this movement is directed at the financial community, which is seen as the culprit and undeserved winner of this crisis. Government bailouts have not been accompanied by reductions in executive pay and end-of-year bonuses. The rich still pay fewer taxes than the middle class or the poor, as Warren Buffett, one of the world’s richest men, has gone to great pains to point out.
Bankers and investors are never popular even at the best of times. From Shakespeare’s Shylock in the Elizabethan era to the present, they have been the object of public ridicule and scorn. However, Canadian banks and investment houses weathered the recent financial storm and economic downturn without government handouts so protestors will have a harder time pressing their case here.
Even so, we must be attentive to the deeper roots of this rage. Our homegrown (and perhaps tepid) variety of the Western “Arab Spring” is symptomatic of a much deeper structural problem that is pervasive throughout the world’s advanced industrial economies — chronic unemployment among our youth.
North America’s unemployment problem is going to be prolonged as it is in many OECD countries. It is not just because of the cyclical aspects of the business cycle but also because of the structural mismatch between those jobs that are available and finding people with the right skill sets to fill them.
The reason for this is that educated, low-cost skilled labor in emerging economies (e.g., China, India, Vietnam, and Mexico) is bleeding jobs from the north. As the Economist pointed out recently, even the financial services sector, which is still largely concentrated in G7 countries, is not immune to this downsizing trend as skilled jobs even in advanced service industries move south.[1] Protestors on Wall Street or Bay Street should scrutinize their own ranks. They might find a laid-off investment banker or financial adviser within them.
In many OECD countries, the chronically unemployed account for almost half of those without jobs. Almost one-fifth of those unemployed are in the ranks of youth and youth unemployment is on the rise. Even more troubling is that fact many of those in the 15-24 youth age bracket are neither in education nor in employment or training programs.[2]
The numbers are truly staggering. There are 16.7 million young people in OECD countries who are “disconnected” from both the educational system and labour markets. Almost 7 million of them are looking for work. The remainder have simply given up.
As we are seeing right now in Canada, a general Bachelor of Arts degree won’t cut it in our increasingly high-tech, knowledge-driven economy. You need a science or engineering degree to get past the front door. This is also true for other sectors, like extractive industries or forestry, where years ago a high-school degree got you a well-paying job. Not now.
Fortunately, Canada has the lowest unemployment rate in the OECD. We also do a better job than most countries in educating, training, and employing our youth. However, we should not be complacent. The percentage of unemployed youth (15-24 years old) in Canada rose from 12.7% in 2000 to 14.8% in 2010. In the US, the corresponding figures jumped from 9.3% to 18.4%. If there is another major economic downturn, these numbers will certainly rise.
There is no simple answer to the challenge of chronic unemployment and the structural mismatch in our labor markets. However, it is going to take real leadership from our politicians, business leaders, and senior educators to address it. This is not the time to point fingers or pass the buck.
First, there is a real role for the private sector to work with government to retool the skills of those who are unemployed.
Second, education and training programs should be targeted to those sectors of the economy where there are jobs and which will be the drivers of future economic growth and innovation. Energy, natural resources, aerospace, information technology (IT), financial services, large-scale construction, and transportation are among them.
Our challenge is not to try to compete with emerging markets in those sectors where we are uncompetitive and jobs have already been lost. It is to reposition our work force and target our education dollars and training programs to those areas where employment will be found when the economy rebounds. Canada’s future in a fast-changing, global economy depends on building the next generation of workers so that we do not confront our own “Arab Spring.”
Origin
Source: iPolitico
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