Business

A new deal for the young: building better jobs

What do young people want from the world of work? Tired tropes about “job-hoppers” in search of “meaning” are a distraction. Most youngsters want what their parents and grandparents wanted: a decent income, a chance to progress, and enough security to build a life on. The trouble is, too few of them are getting it.

A decade of weak global growth bookended by economic disasters can bear much of the blame for high youth unemployment, slow wage growth and the number of graduates in non-graduate roles. There are also shifts in the nature of work.

The prevalence of gig platforms, unpaid internships, zero-hours, agency and temporary contracts can be overstated, since they remain a small share of total employment in most developed countries. But they are an important part of the labour market for young people. In the UK on the eve of the pandemic, one in ten 16 to 24-year-old workers were on zero-hours contracts, up from 6 per cent in 2013. In the eurozone, almost half of the under-25s were on temporary contracts.

These arrangements suit some people, or provide a stepping stone to something better. Others, particularly non-graduates, get stuck on them for years. Working this way usually means fewer employment rights, less training and scant opportunity to save for a pension. It also means being the first for the chop in a downturn, as many discovered when Covid hit. In the UK, under-35s accounted for more than 80 per cent of the fall in the number of employees since last February.

FT series: A New Deal for the Young

Join us for a series of live debates this week, every day at 2pm BST, on the following FT View editorials and share your own ideas and questions. Register for free

Monday Housing affordability is a problem in many countries. How can we fix the crisis?

Tuesday How to secure a decent pension for today’s younger generation. A third way is needed.

Wednesday Building better jobs: like every generation before them, young people desire decent, secure employment with prospects.

Thursday A rethink on education: who should pay for university education, and what about those who don’t go?

Friday Young people face a future of environmental destruction. What can be done to fix it?

Saturday Taxing fairly: today’s young face the burden of supporting older generations but benefit much less at the start and end of their working lives.

Even those with stable jobs often feel anxious. They worry about fierce competition, and fret that long working hours and an increasing spillover between work and home life will damage their health and relationships. If young people are to face the future with confidence, they will need three things: more jobs, less insecurity and working cultures that are humane.

To achieve the first, countries will need a macroeconomic stance that views running the economy cold as a greater risk than that of running it hot. Young people, in particular, lose badly from the former, and a tough start in the labour market casts a long shadow on lifetime earnings and productivity prospects. A tight labour market would lead to more jobs, promotions and pay growth for people in the early stages of their careers, with spillover economic benefits for us all.

Second, employers should be dissuaded from operating two-tier workforces with protected insiders and precarious outsiders. As courts in a number of jurisdictions have concluded, gig platforms exert too much power over workers to be allowed to continue to eschew any responsibility for them.

Flexibility that works for employer and employee alike should be encouraged, but this should not be confused with arrangements that insist on flexibility from workers without granting any in return. Companies should be required to give people notice of their shifts and compensation for last-minute changes (New York and Chicago’s recent “fair workweek” laws are one model). Internships can be beneficial, but companies that use interns to do real work for months at a time ought to pay them.

Third, as companies try to become more diverse they should take seriously what younger staff tell them about toxic work cultures, long hours and the requirement to be “always on”. These generations grew up with digital technology and are more alive to its risks and possibilities. They have a gift for talking openly about mental health. If we are willing to listen, they might help to save us from ourselves.

Join a live debate on better jobs for the young with FT writers at 2pm BST on Wednesday 28 April. Register here for your free ticket.

Other editorials and pieces in this series can be found at ft.com/newdeal

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