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Young, Educated and Jobless in America?

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Written by John Schmitt   
Monday, 03 December 2012 15:15

Today's New York Times has a piece by Steven Erlanger on the "Young, Educated and Jobless in France" that gets most of the facts right, but still might leave its readers with the wrong idea about the real labor-market challenges facing Europe and the United States.

The story focuses on the plight of young, college graduates in France (and several other European countries) who have been unable to find work despite their college degrees and other postsecondary training.

The initial focus is on young people (15-29 year olds) who are unemployed. But, many young people are still in school, which can make interpreting official unemployment rates tricky. (For a discussion of why this is the case, see this article that David Howell and I wrote for The American Prospect back in 2006.)

Erlanger doesn't acknowledge the problems with the unemployment rate when applied to young people, but he does introduce a much better measure of labor-market performance for young people, the NEET:

"[In addition to the unemployed] There is another category: those who are 'not in employment, education or training,' or NEETs, as the Organization for Economic Cooperation and Development calls them."

The idea is that, from a societal point of view, we might be just as happy — even happier — if young people are in postsecondary training, college, or graduate school rather than in work.

The NEET tells us in one number just how many young people are disconnected from both work and school (including training programs). As the NYT notes:

"In Spain ... 23.7 percent of those 15 to 29 have simply given up [on school or work] ... In France, it’s 16.7 percent — nearly two million young people who have given up; in Italy, 20.5 percent."

The piece attributes these high rates to the "euro crisis" — though my colleague Dean Baker takes Erlanger to task on exactly what Erlanger seems to mean by that.

More broadly, though, the problem, Erlanger argues, is "a failure of the system," which has as its key features: "an elitist educational tradition that does not integrate graduates into the work force, a rigid labor market that is hard to enter, and a tax system that makes it expensive for companies to hire full-time employees and both difficult and expensive to lay them off."

But, wouldn't it be useful for NYT readers to know how the United States compares? The NEET numbers cited in the story are OECD calculations for 2010. For the same year, the same source puts the figure for the United States at 16.1 percent — not far from France (16.7 percent), which the piece paints as suffering through a "growing problem" common to "other low-growth countries of Europe."

If NYT readers knew the U.S. NEET rate, they would be able to ask why the rates here are so close to those in France even though we don't have a euro crisis, or apparently, "an elitist educational tradition," or rigid European-style labor markets, or high European-style taxes, or strong European-style job protection laws.

And, wouldn't it be useful to know if other European countries are faring any better? The same OECD data also show some EU countries are actually outperforming the United States. The NEET rate in Germany, for example, is only 12.0 percent; in Denmark, 10.5 percent; in the Netherlands, 7.2 percent. Compared with the United States, all three have highly regulated labor markets, high unionization rates, and high taxes. How have they managed to provide better opportunities for their young people than France and the United States?

Tags: college | economy | education | europe | jobs | labor market | unionization | wages

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