Skills Are Everything
For a long time the labor market was an abstract reality that existed in the conversations of economists. Its changes and dynamism exerted a strong impact, but people could afford to disregard those impacts because of the long-term prosperity and stability. Prosperity has been less consistent and more variable; stability has been replaced by fluidity, now the labor market is something that is on people’s lips as frequently as the economy. It is now a force to be reckoned with, that can force someone to move to a new state, accept a different quality of life, or even find themselves without a role in society. People began realizing that they need to understand and work with the economy, and the same is true for the labor market.
Luckily for people, the labor market presents an extraordinary opportunity for a few lucky people. The changes that have occurred in the economy over the last 2-3 decades have transformed the labor market. No longer does demand (companies) place the highest value in things like job-titles, degrees from specific universities, family names, or past companies. This break from the past, which relied on these black-boxes to signal information about people, will leave many people behind who are unable or unwilling to adapt to the new reality. Instead, the labor market focuses on a single question: “what can you do?”.
A common perception of the state of today’s economy is that it is, bustling, risk-hungry and full of opportunity. People believe that young people are the new technocrats, who thrive in an economy that that favors entrepreneurialism and young talent, one that has left behind the Great Recession without a trace and has now returned to favoring if not outright rewarding the risk that young people are highly willing to pursue. People believe that technological progress has and will continue to magically create wealth for everyone over time.
Some cracks are beginning to emerge in this picture. Companies like Amazon, Yahoo and Snapchat have no answers to declining stock prices. A simple fact was revealed about these titans of the digital age: they have, and will continue, not to be profitable.The riddle of technology driving net positive job creation has not unravelled in such a way as to improve the status of middle class jobs, the expediency of technology threatens to consume even valuable white collar positions and strip the economy of even more of its humanity. Even the vaunted start-up culture of young people is fading; 2015 saw the fewest startups created in the last 24 years, and this is despite growth of the population of 20-30 year olds who should be at the forefront of entrepreneurialism. There is troubling signs that labor market fluidity is once again slipping, and conditions are not so good for young people.
The new reality is that talented young people are slipping through the cracks and living at home with their parents in a state of partial employment, underemployment, unemployment or altogether not being in the labor force. According to Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce, half of all young people with a degree are working jobs that do not make use of their education, and a further 23% are further underemployed. As of 2014, 13% of those aged 18 to 24 were altogether unemployed. Millennials are the best educated generation in American history, but this has come at the price of having by far the highest level of student debt in American history, to the point that it has become a national policy issue. Since the Great Recession of 2008, there was an 11% decline in the number of Millennials who saw themselves as working class. And finally, the percentage of Millennials who are not the head of their household and live at home is the highest for any generation recorded in American history.
The scope of this problem is massive. As of 2013 47% of Millennials had a college degree, and at that time roughly 100 million Millennials lived in the United States. Although the estimate is not precise, we can deduce that around 20 million college-educated Millennials are working in jobs that do not require their degree, and a further 8 million or so are underemployed, while 13 million Millennials are unemployed. The numbers are shocking but it is the human interest side that has made many people silently aware that young people are having systematic slow starts to career. Many young people are sleepwalking at the very beginning of their career, they are directionless and lack the means to create a direction.