CAMBRIDGE – European policymakers have finally recognized the severity of their youth-marginalization problem. But, just over the horizon, there looms another social catastrophe that they have yet to acknowledge. This time, it is middle-aged workers who are poised to suffer.
This might seem surprising, given that middle-aged workers seem to be the winners in today’s system. Workers in their late forties and early fifties enjoy stable employment, control the political system, and are less vulnerable to economic downturns than their colleagues who are closer to pension age.
Moreover, high entry barriers, seniority-related benefits, and tough restrictions on firing employees have enabled Europe’s middle-aged workers to retain even moribund jobs – a situation that has contributed substantially to youth marginalization. According to the OECD, from 2008 to 2012, unemployment among Europeans aged 45-54 increased from 5.2% to 7.7%, while youth unemployment jumped from 15% to 21.4%. At the end of 2013, approximately four million people aged 50-64 were unemployed, compared to nearly six million aged 18-24.
Such statistics explain why policymakers have so far failed to recognize that there is a problem at all. But middle-aged workers’ enviable conditions will soon begin to erode, as mounting competition from emerging economies and relentless technological progress weaken their grip on the system.