Should I envy the new entrants in the labor market for their youth, future and possibilities? The Economist’s fantastic summary of the Future of Work which I used extensively to write this blog, made me wonder. While instinct says yes, reason holds me back. The treshold to enter the labor market has never been this high. Millions of graduates in the EU for all sorts of reasons struggle to find a rewarding role. To fit an employer’s choice today, understanding how costly labor in the EU is, the future looks harsh. Having the labor market ruled by unadapted laws and practices for the digital economy is one thing. Failing to acknowledge and respond to the challenges is however another. It is time Marianne Thyssen within the EU framework formulates a long-term plan to bring the world of work into the 21st century.
While national governments, employers and unions complacently lack the courage to structurally reform the world of work, the EU is risking to waste a big part of a generation’s talent. Stubbornly holding on to an antiquated labor market framework while sacrificing millions of new potential contributors is shortsighted and ultimately suicidal. Priviliging the hoardes of spoiled baby boomers who’ll retire over the next decade, isn’t a sustainable policy either, especially when this astronomical invoice is irrevocably passed on to the next generation. If you’re starting your career now, it will be impossible for you to save enough money during 45 to 50 years of working life to fund 25 years of retirement unless you work till 75 years old or more. You are presented with a double bill: paying for your house and family and your future retirement while paying off the retirement bill of all former generations. The blessing or curse of longevity, depending on where you are in your career, is literally a life sentence.
Still, the EU and all other developed nations, i.e. Japan, need a massive amount of employed talent not only to fund the pension gap but also the health care bills for as long as public spending favors caring for the old instead over investing in the young. Although this stream of money, from young to old, is recently new, it looks like it is here to stay. The political and economic power of the greying generations will guarantee this upstream money-flow. The world of work will have to cater for it. Radical disruptive reform is inevitable. The governments, employers and unions will have to fundamentally rethink their contribution to the world of work. In other words, these 3 wiil need to embrace the future and let go of the past. This will be hardest for the unions as the past is their present raison d’être.
The EU faces another problem: 85% of the young people live in developing countries. The competency level of this you generation is increasing year on year. The developed nations will have no choice but to attract their prime talents and entice them to build a prosperous career as an immigrant. Half of the countries in the EU but especially the UK have monetized the benefits of imported qualified labor. Immigration for all developed nations is no longer a choice, it is a must. While the EU is politically and culturally not ready for this reality, the workforce of its retirement homes just like any other workplace, increasingly reflects the need for imported qualified labor.
Japan is facing this reality more than any other nation today. With over a third of its population soon to be over 65 years old, it is starting to attract foreign talent in a pro-active way. Millennials of developing nations are recruited through targeted websites like flexoffers, promoting working abroad. The EU countries have no other choice. They need to upgrade their workforce with foreign talent. Unifying while harmonising its labor market would benefit all.
The baby boomers are counting on you as a new entrant to the labor market, immigrant or not. You’re likely to live to be a hundred years old and work for more than 50 years, paying off their bills. While they are making your life unfairly tough, they thank you for your contribution. Need I mention that most have retired way before the blessed age of 64 ?