Forget talk of the 'burden' of government debt on future generations. Look at how austerity scars young people now
Austerians, as supporters of fiscal austerity have become known, frequently bemoan the hefty burden on future generations of the debts run up by spendthrift governments in battling the banking collapse.
But a salutary report from the International Labour Organisation last week suggested that today's generation of young people is already bearing more than its fair share of the costs of the crisis.
And it's not just the jobless who have suffered over the past five years: the ILO suggests that a far larger number of young people have found themselves stuck in temporary work or part-time, insecure employment.
That lack of financial security makes it harder to think about settling down, starting a family, planning for the future. For many millions of young people – an entire generation – the economic system is simply failing.
In the rich world, perhaps the heaviest toll is being exacted in the bailed-out countries of the eurozone, where the austerity policies enforced by their creditors have helped to cause a catastrophic collapse in demand.
The latest official figures, released last week, showed that in Portugal, the youth unemployment rate hit 42.1% in the first quarter of 2013, while in Greece, official figures show an extraordinary 64.2% of 15-to-24-year- olds out of work.
Even the hardest-bitten austerians couldn't ignore the political risk of having such a large group of young people standing idle. It would be surprising if they didn't take to the streets – and in the years to come, it will be surprising if this neglected generation doesn't channel its resentment and anger into demands for a different economic approach.
Widely cited research by the former Bank of England policymaker Danny Blanchflower and Professor David Bell of Stirling University demonstrates the long-term "scarring" effect of unemployment on young people's future careers. Even decades later, someone who was out of work for a stretch in their 20s is likely to be earning less on average than colleagues who were lucky enough to keep their jobs.
But today's teenagers and twentysomethings, many of whom have watched the secure world of their parents dissolve into a confusing morass, are also likely to be politically marked by their experiences.
In Europe, the elites who led their countries into the single currency club, promising prosperity and stability, have been ruthlessly exposed. Instead, Portugal, Greece, Ireland and now Cyprus have found themselves shackled to the slash-and-burn orthodoxy of their German paymasters, which young people may rightly feel they never signed up to.
In the UK, meanwhile, young people are facing a dearth of sustainable jobs, just at a time when the coalition government is chipping away at out-of-work benefits, as ministers from the chancellor down berate the "skivers" whose blinds are still pulled down while their more virtuous neighbours trudge to work.
Graduates who ran up huge debts to fund their university education have found that their degree may not be worth what they hoped in today's job market.
The ILO's data shows a rapid increase in skills mismatches, as highly skilled workers take on jobs for which they are overqualified, and those with lower education levels are driven to the back of the queue.
A generation of rising property prices – which has been only partly reversed during the downturn – has also helped to tilt the playing field. Even those young people with relatively well-paid jobs are finding themselves locked out of the home ownership market by high house prices – unless they are lucky enough to have parents able to stump up a deposit.
Some of the solutions to the youth unemployment crisis are complex and small-scale: improving the career guidance students receive at school, making the education system more responsive to the needs of businesses and so on. But the ILO makes clear that the prevailing consensus in macroeconomic policymaking is also to blame for the plight of today's young people.
It points out that economies with higher levels of investment tend to create more jobs, and calls for politicians to aim at diversifying their economies. But it says they should also undertake "targeted demand-side interventions", such as "public employment programmes" – Labour's Future Jobs Fund, scrapped by the coalition, is a good example – and "labour-intensive infrastructure projects", such as the war on potholes my colleague William Keegan called for in this column last week.
Governments throughout the advanced economies must confront the fact that, by sucking demand out of the economy today, apparently in order to protect the taxpayers of tomorrow, they may be storing up deep economic and political problems that will impose painful costs of their own.