Generation Y is currently getting kicked in the teeth. Brought up in the longest economic boom in history, they invested thousands of pounds and years of their life into building up their education and skills so that they could launch a spectacular career and so add tremendous value to society. Instead, the recession has caused around 18.5% of both American and British youth to become unemployed, leaving millions in debt and with the heavy feeling that they have been betrayed by the very institutions which promised to support them.
But why all the fuss? Surely they can just pop back home to their parents, sponge off them for a while and then get a job when things are looking up? Well, youth unemployment has negative long term effects too. Take a look at the image below, which indicates the potentially massive financial damage caused by youth unemployment.
As the graph shows, just starting out five years later can cause you to lose 17% of your potential earnings and 27% of potential savings. This loss will also impact important life developments, such as pensions and buying a house – a decision which will now not be an option for Generation Y for a number of years to come.
Of course, Generation Y is unlikely to be unemployed for half a decade, but the graph hints at the potential of the future damage caused by youth unemployment today, not just on Generation Y itself, but on the economy as a whole. Think: Generation Y will have to support the massive Boomer population as they retire, so how much more of a strain will it be if they are earning 17% less than they could have been? How can consumers support economic growth if their savings are short by 27%?
Thus, before casting Gen Y aside, businesses need to think long and hard about the long term impact of unemployment, not only on the unfortunate youth, but also on themselves.