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They've been called a generation of dreams deferred.
One out of every seven people in Europe between the ages of 15 and 24 who wants a job can't find one.
And many who do have found jobs are stuck in part-time or temporary positions.
And it's not just a phenomenon happening here in Europe.
Young people all around the world are feeling the pain from income inequality.
There are all kinds of inequality in the world like gender, wealth, or race.
We're going to look specifically at income inequality and the effect that it's having on younger generations.
Simply put, income inequality refers to the gap in income which is the money you earn from your job or investments between the rich and the poor.
It's not exactly a pretty picture right now.
Since 1980, the top 1% has taken a bigger slice of the world's income, while the bottom 50%'s share has stagnated.
That picture is even more dramatic in the world's biggest economy, the U.S.
And in many ways, it's even worse for young people.
Let's come back to Europe to help understand why.
After the financial crisis in 2007, incomes declined across the board as people lost their jobs.
Research from the International Monetary Fund found that as the European economy started to recover, the incomes of people aged 65 or older increased by 10%, in part because their pensions were protected.
Meanwhile, the incomes of young people recovered but didn't ever grow.
The research said that because young people didn't have as much professional experience, they were the first to be let go or they were less likely to find work.
Those who did find jobs often accepted lower wages than before.
Others took part-time work, which doesn't provide the same benefits or safety nets.
That helps explain why the youth unemployment rate across the 28 countries in the EU is so high at 14%.
That's more than double the EU's overall unemployment rate across all ages.
This younger generation also has more debt relative to their income than any other age group.
This leaves them much more exposed if the economy unexpectedly gets worse again and could get them into deeper trouble with their finances.
One glaring example is student debt.
As demand for higher education in the U.S. has increased over the years, so has the cost of college and student debt.
National student loan debt sits at $1.5 trillion, making it the second largest type of consumer debt after mortgages.
Student debt is increasingly becoming a concern in other countries too, like Canada, the United Kingdom, New Zealand, South Korea, and Japan.
You can see how inequality is playing out by looking at poverty rates.
Before the financial crisis, the risk of slipping into poverty was more evenly spread among age groups.
Now, one out of every four young people in Europe is at risk of poverty.
The problem is that many young people have gotten stuck in these low-wage, low-skill or part-time jobs.
They miss out on the opportunities to learn new skills required in jobs that make more money.
At the same time, the cost of living is going up.
Just look at this graph, which shows house prices increasing far faster than income over the past two decades.
This is one reason fewer millennials are part of the middle class than the generations before them.
Plus, as the global population ages, public debt is going up as governments finance social assistance programs for the elderly.
The burden of paying off that debt, well, it'll likely fall on young people.
All these costs and more have made young people skeptical of the government and institutions and helped fuel populist movements around the world.
So what can be done?
One popular idea is better education and more training.
In fact, half of young people surveyed here across Europe say the main priority of schools should be to prepare them for employment.
Take Germany's apprenticeship model.
Students split their time between training at companies and taking classes at public vocational schools.
So they get the work experience and the skills they need at the same time.
Data shows this type of training model works to reduce unemployment and inequality.
Another idea is taxation.
Some policymakers and politicians have floated wealth taxes that would target companies with a big income gap between their workers.
Others want unions to fight for higher wages.
More affordable housing could also help ensure young people aren't priced out of good jobs in cities.
While many of these proposals are wildly popular, they've proven to be a tough sell in the political arena.
But the economic reality is that addressing inequality among young people benefits all ages.
This is particularly the case in low-income and emerging market countries, where the IMF found more young people working means more equality for everyone.
Hey everyone, it's Elizabeth here. Thanks so much for watching.
What do you think the best fix is for income inequality?
Let us know in the comments section.
And leave us any other ideas there too. See you later!
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Why is inequality worse for young people? | CNBC Explains

187 タグ追加 保存
Mackenzie 2019 年 10 月 14 日 に公開
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