European jobs are doomed (pt2) - How Davos talks about unemployment

By Ryan McCarthy

DAVOS – In a conversation with a fellow journalist here in Switzerland, we settled on an unofficial motto for the attendees at Davos: there’s a lot we could be doing, but we aren’t.

That’s the overriding theme at Davos about the global unemployment crisis. It’s a slower-moving crisis than the European debt problems that consumed the World Economic Forum’s annual gathering last year. Still, you can hear unemployment being regularly mentioned as a “headwind” in the comments of policymakers and executives at Davos. Several attendees even cited the latest data: Today, Spain announced that its jobless rate hit 26 percent; 60 percent of Spanish citizens under 25 are jobless. Globally, some 200 million people are unemployed, according to the International Labour Organization, with 5 million people expected to be added to the ranks of the unemployed this year.

But this is decidedly not the kind of crisis that Davos is well-equipped to solve: WEF founder Klaus Schwab warned in a blog post Europe’s rising unemployment problem, but also wrote that young people will no longer have jobs “handed to them on a plate; they will have to create them for themselves.”

Jamie McAuliffe, the CEO of Education for Employment, a nonprofit that helps match unemployed Middle Eastern and North African youth with employers, said he’d love it if the Davos crowd would do more. “If we could move some of these conversations to more of an expectation that people are leaving here with commitments, that would be very powerful.” McAuliffe, for what it’s worth, is also the chair of the WEF’s Global Agenda Council on Youth Employment.

Instead of commitments, there were panels and panels (and more panels), which featured a few good ideas and a lot of familiar rhetoric.

In a panel titled “Preventing a Lost Generation,” Maurice Levy, the CEO of the ad giant Publicis Groupe, repeated a common Davos refrain. Unemployment, he said, was largely a function of economic growth; without growth, you can’t create jobs. (Another panelist argued the opposite: without jobs — and income — you can’t generate growth.)

Laszlo Andor, the European Commissioner for Employment, Social Affairs and Inclusion, called for the continent to institute a youth employment guarantee, similar to one employed by countries like Sweden and Finland. “It’s the perfect social investment because the costs of non-action are very high”, he said.

Another group of well-intentioned experts tried to answer the eternal question of “Employed or Unemployable?” at the Open Forum. Imagine a public, more progressive version of Davos, throw in concerned Swiss citizens and you’ve got the Davos Open Forum. In a swimming pool that had been converted into an auditorium, locals asked polite, rambling questions about why politicians had seemed unable to fix Europe’s unemployment. They got polite, rambling answers.

Both panels worried about globalization, and about an increasingly untrained workforce. Sweden’s prime minister, for his part, fretted about a lack of low income jobs  – for young people, that is. “There is something structurally that is happening with our economy, especially in Nordic Europe, that we have never seen before,” Frederik Reinfeldt told the Open Forum crowd.

The problem of workforce training, the panelists all agreed, was actually solvable. Kris Gopalakrishnan, the co-chairman of Infosys, a Bangalore, India-based IT corporation, told the Open Forum crowd that his firm used spending on training and education to survive the financial crisis. The Indian IT sector, he said, had created 2.5 million jobs in the last 20 years, largely by investing in training and education. Training at an entry-level, can last 6 months and the company can train 14,000 employees a day.

“The industry has created these employable people, and has created a kind of continuing education program,” he said. “It’s built into the business model. We cannot wait for the system to produce the workforce.”

It’s possibly a little naive to think the world’s elite should spend much time worrying about global unemployment in a Alpine conference at which attendance can cost six figures. But you can always count on the Davos crowd to express a polite, entirely non-binding concern for the world. Davos, after all, is a place where the elite can safely acknowledge a couple of hundred million people who can’t find work. And there’s even room for some limited self-flagellation.

“People want a job because they have real lives,” Publics’s Levy said. “We, as a society, are guilty of not giving them that job.”

http://blogs.reuters.com/small-business/2013/01/25/how-davos-talks-about-unemployment/