A Threat to Rebalancing the Economy?

A concern in many countries is the current and growing trend among young qualified people who decide to leave to seek employment in other countries as a consequence of the continuing recession and financial crisis. Many young people have become increasingly disillusioned after qualifying to find they are underemployed or unemployed. If this trend continues to increase it will seriously undermine strategies to reform and rebalance the economies of countries in Europe and beyond. In addition people who have been made redundant or are in employment areas that are vulnerable to closure or down sizing are equally uncertain about their future employment prospects in their own countries.  One recent statistic highlights this development which is not just about the young people but that there has been a 45% increase in the redundancy rate for women over 50 between 2010 and 2013 compared with 13% increase in their redundancy rate in the previous few years.

The current spectre of high unemployment especially amongst young people emphasises the urgent requirement of a fundamental rethink of the methods a country uses to reconfigure its economy in order to recover from the current crisis and cope with all the uncertainties of the future.  To date very few governments, especially in the West, have failed to recognise let alone begin to tackle the underlying causes of the crisis. Indeed many are continuing to operate the same practices that caused the crisis in the first place e.g. an obsession with property and the rampant operation of the so-called free market which creates artificial bubbles that will in turn recreate the boom and burst economy. One depressing feature of the obsession with property and house ownership in England is that for young people buying a property is an almost impossible dream and is another factor in the desire to move abroad.

The current profile of employment in Britain lacks credibility and is based on highly questionable ethical practices comprising as it does people on part time contracts very often with little or no security of tenure or employment rights e.g. zero hour contracts. At present there are 1.4million people on zero hour contracts employed mainly by larger companies in Britain. Sadly other areas of employment are adopting this practice e.g. universities and colleges.  Also the country continues to be wedded to a skewed economy dominated by financial and banking services. The situation is particularly depressing when young people have been conned into going into HE with the expectation of appropriate employment for their subject specialism coupled with reasonable salaries. In addition they are lumbered with massive student debt with little prospect of clearing it in their life time – this is particularly the case in England and USA. The future for many young people is very uncertain and one can understand their frustration and desire to find meaningful employment and life abroad.

But it is these graduates and experienced workers of all ages who have been made redundant for whom the home country needs to revitalise and rebalance the economy. Many are the next generation who should be valued for the country’s future. Unless the country recognises this fact then people will migrate elsewhere and contribute to a more vibrant and secure economy there while their home country’s economy founders further.

Many commentators have argued that this is not a serious issue because of the dynamics of the world economy. The world over people will move to other countries and replace those who have left. This however raises many interesting questions about how a country plans and manages its education and training system. In the past the West has often been accused of poaching from abroad qualified people from such areas as nursing, other medical professionals and dentistry with all the associated ethical issues. After all these countries are often poor and have invested in their people’s education and training only to find richer countries benefit from that investment.  I have no problems about global mobility which will hopefully enrich, create mutual respect  and create greater understanding amongst different cultures but it must be managed in a more ethical and reciprocal fashion recognising the needs of each country.

If each country is serious about rebalancing its economy and realising a sensible level of employment it must carry out fundamental reviews of its education and training systems to more effectively match its future economy. Critical decisions need to be taken about the shape of the manufacturing /service industries and the skills that they require. In addition a more accurate analysis of the supply and demand requirements is needed that will create confidence amongst their own populations that the skills they possess will be recognised and valued by employers. Failure to carry out these reviews and reforms will weaken any attempts to rebalance their economies.