Youth Misses Out On "Fruits Of Rebound"

Tyler Durden's picture


With record debt issuance funding record share buybacks and record wage disparity for executives, the "fruits of the rebound" in global asset markets (read - central-bank-inspired liquidity douche) have passed over a whole generation. As Bloomberg's Niraj Shah notes, the risk of young people facing long-term unemployment is rising as firms increase payouts to shareholders and executives rather than invest in new workers, the ILO has warned. Structurally high unemployment is the second-biggest concern this year, according to the World Economic Forum’s global risks 2014 report.

Via Bloomberg's Niraj Shah ( @economistniraj )

Global Unemployment to Climb

Global unemployment rose by 5 million to 202 million last year, according to the ILO. That figure is forecast to rise to 215 million by 2018 as employment growth, at 40 million new jobs a year, fails to match the 42.6 million people predicted to be eligible for employment every year. Government spending cuts as well as a failure of firms to invest in new workers may be contributing to rising unemployment.

Youth Unemployment at Record Levels

Young people account for 40 percent of the world’s unemployed, the ILO says. About 74.5 million people under the age of 25 are unemployed, giving a global youth unemployment rate of 13.1 percent. That compares with an overall global unemployment rate of 4.5 percent. More than half the youth population is unemployed in Greece and Spain. About 357.7 million youth globally were not in education, employment, or training in 2010.

Rising Wage Disparity

Wage disparity between the U.K.’s top earners and other workers is rising to levels last seen in the 1940s, according to the research group, the High Pay Centre. Average wages have increased about 300 percent since 1980, while average executive pay soared more than 4,000 percent over the same period. In 1980, the head of Barclays earned 16 times the average wage, compared with 160 times the average worker’s salary in 2011.

Lengthening Periods of Unemployment

Periods of unemployment are lengthening. A third of Europe’s jobless citizens have been without work for more than a year, according to the ILO. That damages job prospects as work skills are lost. The average American jobseeker found work after six months in 2012, compared with three months prior to 2008. In Spain, the unemployment duration increased to eight months in 2012 from five months in 2008.

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Thu, 01/23/2014 - 17:47 | 4360317 Rainman
Rainman's picture

Got it. Structurally high unemployment is illuminati's second biggest concern. Lynch mobs made # 1 ?

Thu, 01/23/2014 - 17:53 | 4360337 LawsofPhysics
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Fri, 01/24/2014 - 08:39 | 4362088 N2OJoe
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"Government spending cuts as well as a failure of firms to invest in new workers may be contributing to rising unemployment."

So government spending cuts lead now to long term unemplyment? And what do you expect businesses to do in an environment like this? Hire more unskilled workers, train them, and pay for all their entitlements with no chance of reward?

Sorry guy, I undestand its from doomberg but I couldn't even read the rest of your article after seriously quoting such an absurd statement.

Fri, 01/24/2014 - 10:18 | 4362412 RKDS
RKDS's picture

Yes, why would businesses invest in the future...better to crawl into bed with mommy government and suckle at the teat of some kind of abritrage scheme, right?

Fri, 01/24/2014 - 13:02 | 4363124 N2OJoe
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Someone needs to learn reading comprehension...

If govt spending is not good for employment, then how could cronyism? Do you really think with the kind of tyranny going on right now, that "investing" in the future would pay off in any way?

For someone who hates mommy government so much, you sure do swallow their narrative like a good little sheeple.

Fri, 01/24/2014 - 14:49 | 4363560 RKDS
RKDS's picture

What?  Too many businesses are just laying around waiting for their certainty allocation from the government.  That's what you do when you have no ideas or work ethic.  If this country should be afraid of anything, it's when labor just stops participating and not the temper tantrums of the entitled monkey on labor's back.

Thu, 01/23/2014 - 18:03 | 4360377 Harbanger
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.... firms increase payouts to shareholders and executives rather than invest in new workers.

Typical leftist Business model, from this author.  What does he mean that they should be "investing" in new workers?  Stocks are only rising because of QE, while real production, sales and actual business continues to decline. 

Thu, 01/23/2014 - 18:10 | 4360406 Freddie
Freddie's picture

Young people in Amerika voted for this - so it is all good.  Maybe they should have gotten behind Ron Paul.

Thu, 01/23/2014 - 20:23 | 4360808 Ballin D
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Both candidates of both parties have supported the same 'progressive' boomer ideals since before the youth of today could vote and even before they were born.

Also, if you insist on blaming the youth, blame the minority youth. Under 30 whites voted against this. Not only did they vote against Obama, but the young whites of all political affiliations were as likely to vote independent as declared independents were.

Fri, 01/24/2014 - 02:19 | 4361796 LosOsos
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So false. The youth support for Ron Paul was documented the entire race, and to pop another stereotype here's the Ron Paul rally at UC Berkeley. Broad brushed charicatures don't help any of us.


Elections can't change the system as they are a product of it.


Edit: damn picture wont' load

Thu, 01/23/2014 - 17:46 | 4360320 Billy Sol Estes
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Good thing our masters are meeting in Davos to plan a way out of this mess for us little guys...

Thu, 01/23/2014 - 17:56 | 4360345 john39
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eugenics.  now take your gmo gene mutating flu vaccine and shut the F up.

Thu, 01/23/2014 - 18:27 | 4360449 jbvtme
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can you recommend the proper dosage of chemtrail homeopathic?

Thu, 01/23/2014 - 17:48 | 4360323 JuliaS
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What's with the funky crypto-charts. Are we back in the 70's?

Thu, 01/23/2014 - 17:49 | 4360327 LawsofPhysics
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If history is any guide, the "biggest concern" of these youth should be getting drafted into some pointless war to serve as cannon fodder.

Thu, 01/23/2014 - 17:55 | 4360344 Occams_Chainsaw
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Yeah....dead guys can't flip burgers.  Heck....we will have robots for that soon enough anyway.

Thu, 01/23/2014 - 17:58 | 4360360 Rainman
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Thu, 01/23/2014 - 19:30 | 4360668 Binko
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There's no "cannon fodder" in our wars any more. We were in Iraq for 10 years and suffered roughly 4,000 dead in total. Thats about 2 months worth of highway fatalities. And ten years of Iraq casualties equals about about one week of Civil War casualties when young people really were "cannon fodder".

If you want to speak metaphorically you could say that today's young people are "cannon fodder" in a very harsh economic war waged by the 1% against everybody else, and especially against young people.

Thu, 01/23/2014 - 17:54 | 4360341 Occams_Chainsaw
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So is that one chart actually representative of things swirling down the toilet?

Thu, 01/23/2014 - 17:55 | 4360353 Rukeysers Ghost
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Fruits of Rebound? This sounds like some sort of gay reality show on the Bravo channel.

Thu, 01/23/2014 - 18:00 | 4360368 Son of Loki
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If the Yutes had iinvested in those "High Yield Savings Accounts" [created indirectly by the Fed   0.01%] they'd be rolling in the dough.

Thu, 01/23/2014 - 18:17 | 4360431 noless
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I invested in getting drunk to avoid the deafening echo chamber replete with cries of "get a job, do something with your life".

Thu, 01/23/2014 - 18:10 | 4360405 Sophist Economicus
Sophist Economicus's picture

Another business journlist that doesn't have a clue.


Businesses will invest in new workers when there is demand for their products on the horizon that cannot be effectively delivered using existing plant/equipment/labor pool resources.   It is not the 'responsibility' of businesses to put salve on wounds created by government/crony capitalist corruption

Thu, 01/23/2014 - 18:10 | 4360409 Sudden Debt
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Thu, 01/23/2014 - 19:28 | 4360486 Dr. Engali
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Oh for crying out loud. I despise the corporate oligarchs for many reasons, but this is not one of them. It is not a company's responsibility to invest in new workers. If there is no demand for their products or services, then there is no incentive for the company to hire.

If this article had focused on corporations lack of investment for R&d I could give this article some credence, otherwise it's just a bunch of tripe.

Thu, 01/23/2014 - 19:33 | 4360681 Binko
Binko's picture

You are right. But it's societies (that means all of us) responsibility to put an economic system in place that creates stability and the hope of a decent life if you work hard for everybody. We have lost that. Now how do we get back to it?

Personally I think the power and security structure is so entrenched and interconnected that there is no way to make meaningful change short of collapse and rebuild.

Thu, 01/23/2014 - 19:50 | 4360737 hairball48
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We're too far down the road to ruin for there to be any "recovery" now. The party is over. The only way to unwind this boil we call an economy is for it to crash. The execesses of the past will have to be wrung out....and the pain will be extreme for most of the "99%, ", especially the bottom 50%.

Thu, 01/23/2014 - 19:48 | 4360726 itstippy
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What is Germany doing differently than the rest of Europe and the U.S.?  Germany seems to be doing well in employment, productivity, innovation, job satisfaction, profitability, ecological impact, etc. How are they thriving when all the other mature Western economies are falling apart?

Thu, 01/23/2014 - 18:40 | 4360509 pitz
pitz's picture

The rot in the economy, and the lack of youth hiring, started back after the 2001-2002 downturn.  In some sectors, particularly the tech sector, there has been very little hiring of young domestic talent since the last dot-com bubble. 

Thu, 01/23/2014 - 18:56 | 4360560 Spungo
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"Maybe they should have gotten behind Ron Paul."

They were behind Ron Paul. Ron said he ran again in 2012 because of the overwhelming support he saw from young people in 2008. He did very well in polls even when the media pretended that he didn't exist.

Thu, 01/23/2014 - 19:02 | 4360581 Harbanger
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-1 for linking Jon Stwart, who is a script reading mouth piece of the left, with Ron Paul.

Thu, 01/23/2014 - 19:45 | 4360718 ILikeBoats
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What is the problem?  GOVERNMENT.

All the good jobs at mid-sized companies were created by guys working out of their garages, or in cheap office or shops, with minimal regulation, taxation, and paperwork. 

I started a small LLC with a friend, in total, just the legal fees were about $3K due to the hoops we had to jump through.

Isn't it amazing that GE can get an effective tax rate of ZERO percent, but that the guy doing things on a shoestring out of his garage is expected to pay up to 35% or more? And then people wonder why there are not enough jobs ... people respond to incentives - make it easy to hire productive people (no nose-counting of minorities, LGBT, lesbian midget nuns, etc.) and things will get better.

Thu, 01/23/2014 - 23:30 | 4361480 pitz
pitz's picture

Most of the under-40-year-old crowd can't even afford garages these days.  Especially those with the capability of innovation, like engineers.  Salaries and jobs have lagged that badly.

Thu, 01/23/2014 - 21:33 | 4361052 Spungo
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"What is Germany doing differently than the rest of Europe and the U.S.?"

It's because they're superior to us. They fought against Britain, France, and Russia in WW1, and they were reasonably close to winning. Despite fighting on two fronts, they defeated the Russians and came within shelling distance of Paris. 20 years later, they did it again. They took Poland in 5 weeks, France in 6 weeks, and they got within 100km of Moscow. They were destroyed a second time, and once again rose to become the dominant economic power in Europe. I blame it on drugs. They have too many drugs.

One interesting TED talk alluded to language being a major part of how people think. The German language apparently doesn't use past, present, or future tense. You don't say "I will go bankrupt tomorrow" in German. You would say something closer to "I went bankrupt tomorrow." You describe things in present/past tense then add a date saying when this will happen. It rained tomorrow. The whole fucking economy imploded next year.

Thu, 01/23/2014 - 21:48 | 4361106 starman
starman's picture

wait Obumer wasnt invited!?


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