Generational Precarity,Education,and the Crisis of Capitalism: Conventional,Neo-Keynesian,and Marxian Perspectives

Introduction

In the wake of the global financial crisis, societies across the world are attempting to manage potentially destabilizing levels of youth unemployment and underemployment. New terms have entered the popular lexicon such as ‘generation jobless’, ‘the new underclass’, and ‘the precariat’ in order to describe a generation of young people struggling to acquire secure livelihoods in the most dismal labor market since the Great Depression. The economic insecurity of the young represents an emerging site of social conflict and a looming challenge to the ongoing legitimacy of dominant economic, social, and political arrangements (Mason, 2012). Within mainstream discussions, it is often suggested that the primary mechanism to manage the youth employment crisis is through more and better education. It is argued that educational systems need to become more closely aligned with emergent human capital imperatives in order to produce the highly skilled, flexible and entrepreneurial workers said to be required to fill and invent the jobs of the future (Cowen, 2013; Goldin and Katz, 2008). Such views are now dominant in the mainstream media and in the business press. They have also worked to shape global educational policy through transnational organizations such as the World Bank and the Organization for Economic Cooperation and Development (OECD) that advocate for privatization, standardization, and corporate managerialism across national education systems (Ball, 2012; Olssen and Peters, 2005). However, despite incessant calls for educational reform and human capital investment, mounting evidence indicates that global education systems are in fact producing a global surplus of credentialed, highly skilled workers at rates far faster than they can be effectively integrated into the world economy (Brown et al., 2011). At the same time, transformations in the global division of labor and the organization of production and work have diminished the job prospects and driven down the real wages of young workers, contributing to deepening generational ‘precarity’ across many parts of the world (Standing, 2011). This has only been aggravated as a stagnant transnational capital attempts to reconstitute itself through short-term speculative fixes and austerity arrangements that serve to deepen inequality, while placing a further drag on economic recovery and employment for the majority of workers (McNally, 2009; Streeck, 2014).

Critical sociologists of education have long observed the various ways that educational systems are implicated in reproducing and legitimating relations of capital accumulation and class stratification (Bourdieu and Passeron, 1977; Bowles and Gintis, 2011). These perspectives have also demonstrated how labor market conditions such as relative levels of employment are largely produced externally to educational systems through the market, property, and power relations immanent to capitalist societies. This article does not attempt to provide a new model for either refining or refuting the relative ‘correspondence’ (or lack thereof) between education and the reproduction of workforce skills and/or a hierarchical class structure (Livingstone, 1995, 2009; Rikowski, 1997). Rather the article draws on analytical resources from critical sociology of education and heterodox political economy in order to critique orthodox neoliberal and neo-Keynesian diagnoses and prescriptions for addressing generational precarity. Drawing examples mainly from the United States and Canada, it suggests that education conceived as human capital development for youth employment is largely an ideological construct that obscures and individualizes underlying structural tensions and contradictions. It argues that while neo-Keynesian accounts provide an important corrective to certain aspects of conventional (neoclassical/neoliberal) economic viewpoints, they ultimately fall short of the explanatory power of Marxian analysis, particularly concerning the primacy of class relations and the contradictory role of employment within an increasingly crisis-ridden global capitalism.

Framing the Crisis: The Undereducated American and Overeducated Canadian

The youth employment crisis is symptomatic of a broad failure of global capitalism and of societies to provide meaningful and dignified livelihoods to the next generation. The International Labor Organization (ILO) has warned of a ‘scarred’ generation of youth ‘facing a dangerous mix of high unemployment, increased inactivity and precarious work in developed countries, as well as persistently high working poverty in the developing world’ (ILO, 2013). It estimates that in 2013, 12.6 percent, or around 73 million youth between the ages of 15 and 24 were unemployed globally, only a fraction off the post-crash peak of 12.7 percent in 2009. Not surprisingly, the crisis is most acute in the poorest regions where 90 percent of the world’s youth live. The ILO estimates that up to two-thirds of youth in parts of the developing world are currently ‘underutilized’, meaning they are either unemployed, in irregular or informal employment, or are ‘inactive’ in employment, education, or training. In the European Union and other advanced economies of the OECD like the United States and Canada, unemployment rates of youth ages 15–24 have also soared by almost 25 percent since 2008, and as of 2012, were at a two-decade high of 18.1 percent (Greece, Spain, South Africa, and Portugal each have rates over 40 percent). Additionally, a staggering number of youth across the OECD, around 40 percent, are precariously employed in temporary jobs, typically with low pay and few if any benefits, while 15 percent of all youth are completely inactive in employment, education or training.

Like their counterparts across the OECD, millions of young people in the United States and Canada are struggling to acquire secure employment. Both nations have youth unemployment rates that are double the national average, 16 percent in the USA and 14 percent in Canada (Addressing Youth Unemployment and Underemployment: AYUU, 2014; Ayers, 2013; Canadian Center for Policy Alternatives: CCPA, 2014; Shierholz et al., 2013). Additionally, increasing numbers of youth in both nations are precariously employed and/or underemployed (40 percent by some estimates), while close to 15 percent are inactive in employment, education, or training. These figures are far from abstractions. Widespread employment insecurity and declining real wages, soaring costs of college tuition, and staggering levels of student debt mean that vast numbers of young people are facing a future of great uncertainty and hardship. The negative impacts are not only felt in significantly reduced lifetime earnings and savings, but are experienced in elevated anxiety, stress, depression, and self-blame. Furthermore, the consequences are not only personal, but economic and societal as well. Youth unemployment and underemployment lowers demand for goods and services, which perpetuates a cycle of economic stagnation. It also reduces the tax base, while at the same time labor market insecurity generates elevated need for government investments in areas such as public education, job training, health care, and unemployment insurance (Reich, 2012; Stiglitz, 2012). It is also essential to point out that the youth employment crisis reflects and exacerbates deeply rooted and expanding class and race inequalities across societies (Therborn, 2013). Youth from working class, immigrant, and racially marginalized backgrounds face many additional barriers to acquiring steady work. They are more likely to face discrimination in hiring and have to cope with geographical and social isolation that limits access to affordable transportation, housing, high quality schools, and employment opportunities (Wilkinson and Pickett, 2009). For instance, in the United States, African American youth make up 16 percent of Americans aged 20 to 24, but they constitute 23 percent of young adults inactive in the labor market (Ayers, 2013). Similarly, Latino youth make up 21 percent of Americans aged 20 to 24, but constitute 23 percent of inactive young adults. These figures do not include the disproportionate number of youth of color who have been discarded by the new economy and warehoused in American (and Canadian) prisons via the drug war and the criminalization of poverty (Alexander, 2010; Wacquant, 2009).

Media representations often frame the youth employment crisis as an educational problem. For instance, in Canada, the youth unemployment crisis is often said to derive from overeducation (or at least education of the wrong type, too many humanities degrees for instance) (see Sorenson and Gillis, 2013; Venn, 2013). Young people in Canada, it is argued, are facing a job market oversaturated with college and university graduates, which translates into elevated competition in the labor market. Anxieties reflecting the overeducation narrative are widely discussed in the Canadian media. In 2013, Maclean’s Magazine ran a story describing this generation of Canadian post-secondary graduates as ‘history’s most cultivated underclass’ (Sorensen and Gillis, 2013). A 2013 Canadian Broadcasting Company (CBC) documentary, titled ‘Generation Jobless’, covered similar ground. It posed the question: ‘Why are so many young Canadians overeducated and unemployed?’ (CBC, 2014) Despite roughly similar rates of youth unemployment and underemployment, as well as post-secondary attainments (Canada is ranked second in the OECD and the USA fifth) (OECD, 2014), the popular narrative is quite different in the United States. While still represented as an educational problem, the youth employment crisis is said to stem from undereducation (Carnevale and Rose, 2011; Goldin and Katz, 2008). From this perspective, the United States educational system is said to be failing to provide enough skilled graduates relative to their demand and that this is hampering economic recovery and job growth. Unlike in Canada, the educational system in the USA is said to be in a terminal crisis. This point of view is represented in countless news stories, editorials, and in journalistic accounts such as in Thomas Friedman’s (2007) influential The World Is Flat. It is succinctly articulated in a report by Anthony Carnevale and Stephen Rose (2011) titled ‘The Undereducated American’. In this report, Carnevale and Rose argue the United States needs 20 million additional college graduates by 2025 in order to keep up with rising demand in the economy.

These narratives of undereducation and overeducation are largely ideological constructs. This is not to suggest that undereducation (as an absence of formal skills or training) does not render some young people unqualified for certain kinds of work, or that overeducation (as a surplus of formal skills, or of the wrong kind of skills) does not render some young people overqualified for certain kinds of work. These two factors are in fact coextensive and highly variable upon a host of factors (Livingstone, 2009). However, as I detail in the following sections, neither undereducation nor overeducation provide an adequate empirical or theoretical explanation for generational precarity, largely due to flawed conventional economic assumptions regarding the dynamic relationship between formal education, employment, and capitalism.

Conventional Perspectives: Youth Employment as a Human Capital Problem

Conventional perspectives are rooted in neoclassical/neoliberal rationalities enamored with abstract mathematical models and theorems oriented to proving the ‘natural’ efficiencies and equilibrium tendencies of self-regulating markets (which the models and theorems are of course predetermined to prove). These perspectives represent the now dominant post-Keynesian tilt of the economics discipline that germinated in the postwar period, solidified in the aftermath of the economic crisis of Fordism in the 1970s, and eventually triumphed during the post-Cold War era of global capitalist development (Brenner, 2006; Galbraith, 2014; Harvey, 2005).

Conventional perspectives drive popular narratives such as the undereducated American and overeducated Canadian and suggest that technological change and the level of human capital development through educational training are the primary factors in determining employment for youth today. They stubbornly cling to a version of Say’s law that suggests supply of skilled labor creates its own demand. Unlike classical political economists like Adam Smith, who calculated labor as a homogenous input, conventional viewpoints reflect the now broadly accepted notion of investment-related labor differentiation popularized by Gary Becker (1964), that suggests education (imagined exclusively and narrowly as human capital development) increases the marginal productivity of labor, and therefore enhances growth in employment, wages, and economic output. The general idea is that workers with high skill levels drive innovation and economic growth, which simultaneously increases demand in the employment structure for workers (who assume ever more responsibility for acquiring advanced educational attainments).

A recent and influential articulation of these ideas can be found in the work of Claudia Goldin and Lawrence Katz (2008) who have analyzed the relationship between education, technology, and employment through what they call skills-biased technological change (SBTC). They argue that the most significant factor in determining employment and income distribution is the capacity of educational systems to meet human capital requirements of new technology. They argue that economic expansion and reductions in inequality in the United States and other advanced economies during the middle part of the 20th century, which they refer to as the ‘human capital century’, were driven by mass expansion of public education that kept pace with technical innovations and attendant demand for enhanced skills. They state:

… we have emphasized the existence of an ongoing and relentless race between technology and education. Economic growth and inequality are the outcomes of the contest. As technological change races forward, demands for skills – some new and some old – are altered. If the workplace can rapidly make adjustment, then economic growth is enhanced without greatly exacerbating inequality of economic outcomes. If, on the other hand, the skills that are currently demanded are produced slowly and if the workforce is less flexible in its skill set, then growth is slowed and inequality widens. Those who can make the adjustments as well as those who gain the new skills are rewarded. Others are left behind. (p. 254)

The SBTC thesis coincides with the widespread claim that a primary driver of youth unemployment today is a skills/jobs mismatch where employers supposedly cannot find workers with the right capacities for current job requirements. Goldin and Katz, as well as others committed to the SBTC and skills/jobs mismatch explanations, suggest that increasing the number of college graduates and refocusing their training will generate employment for youth and lower income inequality as an increasing supply of highly skilled workers rises to meet current demand as well as stimulate new demand for employment. MIT economist David Autor and his colleagues have offered a complementary perspective to the SBTC and skills/mismatch theses (Autor, 2010; Autor and Dorn, 2013). They observe that technological changes such as robotization and automation have contributed to a ‘polarization’ of the employment structure over the last three decades. They further suggest that technology and enhanced mobility of capital and production under globalization have ‘hollowed out’ middle income employment in the United States as well as other advanced economies like Canada. These are ‘routine’ jobs that are easy to automate and outsource such as bank tellers, clerical workers, and middle managers. Simultaneously, they claim that the bulk of job growth has occurred at the top of the wage hierarchy in analytical sectors such as STEM (science, technology, engineering and mathematics) and finance, and at the bottom in low wage service jobs that are difficult if not impossible to automate or outsource. Autor and Dorn (2013) observe:

… computerization is not reducing the quantity of jobs, but rather degrading the quality of jobs for a significant subset of workers. Demand for highly educated workers who excel in abstract tasks is robust, but the middle of the labor market, where the routine task-intensive jobs lie, is sagging. Workers without college education therefore concentrate in manual task-intensive jobs – like food services, cleaning and security – which are numerous but offer low wages, precarious job security and few prospects for upward mobility.

Autor and Dorn are not overly pessimistic about the polarization of work and their prescriptions are closely aligned with the SBTC and skills/jobs mismatch arguments. They suggest:

… citizens should invest more in their education. Spurred by growing demand for workers performing abstract job tasks, the payoff for college and professional degrees has soared; despite its formidable price tag, higher education has perhaps never been a better investment.

Thus the ‘jobs polarization’ argument tracks with the SBTC and skills/jobs mismatch theses that suggest that the answer for resolving the youth employment crisis is to reform education so as to elevate and tailor the skills of the young to meet and stimulate demand in employment.

In his book Average Is Over (2013), George Mason University economist Tyler Cowen extends these arguments while offering a decidedly more pessimistic assessment of the prospects of young workers. ‘The labor market troubles of the young’, he writes, ‘are a harbinger of the new world of work to come’ (p. 3). Cowen suggests that in the future, young people with the right education, skills, and training will continue to gain a competitive advantage and garner a ‘wage premium’ over their less educated peers. However, he also describes a zero-sum world where intelligent machines will increasingly substitute for human labor and in the process radically remake the employment structure. ‘Whether we wish to call those machines “AI,” “software,” “smart phones,” “superior hardware and storage,” “better integrated systems,” or any of the above. This is the wave that will either lift you or that will dump you’ (p. 6). He writes:

The key questions will be: Are you good at working with intelligent machines or not? Are your skills a complement to the skills of a computer, or is the computer doing better without you? Worst of all, are you competing against the computer? Are computers helping people in China and India compete against you? If you and your skills are a complement to the computer, your wage and labor market prospects are likely to be cheery. If your skills do not complement the computer, you may want to address that mismatch. Ever more people are starting to fall on one side of the divide or the other. That’s why average is over. (pp. 4–5)

The idea that ‘average is over’ signals Cowen’s insistence that the radical polarization of labor and income is inevitable and unalterable. In his view, advances in robotics, automation, and computing power are creating a ‘hyper-meritocracy’ where the highly educated and motivated few (top 5%) will perform demanding cognitive work and lead enriching lives, while the majority will face a reality of growing economic redundancy and diminished opportunity. One of the few growth industries that Cowen identifies for youth who may not be technically inclined is in the provision of new forms of personal services to the rich. He states:

We can expect a lot of growth in personal services, even if those jobs do not rely very directly on computing power. The more the high earners pull in, the more people will compete to serve them, sometimes for high wages and sometimes for low wages. This will mean maids, chauffeurs, and gardeners for the high earners, but a lot of service jobs won’t fall under the service category as traditionally construed … It sounds a little silly but making the high earners feel better in just about every aspect of their lives will be a major source of job growth in the future. Better about the world. Better about themselves. Better about what they have achieved. (pp. 22–23)

Cowen’s description of the future is dystopian. However, it is also typical of conventional neoliberal perspectives in that it ideologically positions capitalism as an immutable and objective mechanism for distributing ethical outcomes. The only real choice, or option, is to adapt by reconfiguring our educational systems to prepare youth physically and psychologically for a future defined by ruthless competition over increasingly scarce jobs and resources. Without too much hyperbole, the logical extension of his argument would be that for secondary and higher educational systems to provide pathways for youth into the job market they should downsize in all areas unrelated to the core ‘value adding’ STEM fields (areas such as literature, philosophy, political science, fine arts) and invest in creating degree programs in areas that provide services to the rich such as elite spa therapy, plastic surgery rehabilitation, yoga instruction, personal training, and butler etiquette. Ultimately, Cowen’s vision for young people is a winner-take-all future that mirrors a digitalized, neo-feudal version of Downtown Abbey. This vision, of course, reflects a right-wing cultural politics that justifies the degradation of existential possibilities for youth through the conflation of personal virtue with the rough justice of the market. Within this vein, Cowen argues that a majority of young workers today are simply not hirable. He suggests this is due to laziness in young men and what he refers to as ‘baby lust’ in young women that render them incapable of upgrading their human capital. Such views are hardly unique. For instance, Charles Murray (2010) argues that joblessness cannot be understood separately from the apparent disintegration of self-restraint and ‘family values’ among the middle and working classes. Similarly, New York Times columnist David Brooks (2012) suggests that the rich simply have better values, work harder, and instill the right attitude for educational achievement in their children. In these views, supporting youth employment is positioned as a task for education and human capital cultivation, but it will only succeed if the middle and working classes embrace a new ascetic moralism and inculcate a renewed sense of grit, resiliency, and personal discipline in the young. Cowen suggests that in the future, shantytowns should be built on the outskirts of major cities in the USA in order to provide cheap living conditions for the underserving multitude who fail to maximize their human capital (to add value to ‘smart machines’) through the requisite exercise of moral rectitude and competitive individualism (pp. 244–5).

It is in orthodox neoliberal narratives like Cowen’s that the human capital framing of generational precarity as an educational problem reveals itself for what it is, a blatant form of ideology that justifies and legitimates a social formation based upon the exploitation of the many by the few. Here technology becomes an alibi for a host of broader contradictions, tensions, and conflicts immanent to the political and moral economy of global capitalism. Education, in turn, is not only positioned as a means for producing skills and capacities to meet the demands of employers, but also as an ethical scene of subjectification whereby young people are to develop a habitus that submits to the rhythm of supposedly immutable economic laws and a new disciplinary regime of technologically-mediated, precarious living labor. Thus diagnoses and prescriptions of the youth employment crisis as an educational problem individualize the structural conditions of insecurity generated by neoliberal capitalism and attendant transformations at the level of the state. It does so through perpetuating a fallacy, long discredited in critical sociological analysis of education, that relative educational investment and individual (meritocratic) acquisition of educational credentials (undereducation and overeducation) are the primary determinants of employment (and inequality) as well as the primary solution for resolving unemployment (Bowles and Gintis, 2011; Livingstone, 2009).

Neo-Keynesian Perspectives: Youth Employment as a Policy Problem

Writing in The Guardian, Dean Baker (2013) of the Center for Economic and Policy Research observes that conventional economic explanations such as those offered by Goldin and Katz, Autor, and Cowen regarding the primacy of education and technology serve to obfuscate rather than illuminate the core issues driving youth unemployment today. He states:

This story is comforting to elites because it means that inequality is something that happened, not something they did. They won out because they had the skills and intelligence to succeed in a dynamic economy, whereas the huge mass of workers that are falling behind did not. In this story the best we can do for the left behinds is empathy and education. We can increase their opportunities to upgrade their skills in the hope that more of them may be able to join the winners. (Baker, 2013)

Such observations are not meant to deny the powerful role of education and technology in shaping labor market conditions. A 2013 study by Carl Benedict Frey and Michael Osbourne of the University of Oxford, has suggested that up to 47 percent of job categories in nations like the United States and Canada are under ‘high risk’ of automation over the next two decades (this doesn’t include offshoring). According to the study, the next round of automation will include a considerable number of white-collar occupations such as management, accounting, technical writing, legal work, and teaching. What is essential to point out is that the dislocating effects of new technology for the present and future employment prospects of young people have little relation to the relative educational and/or skill level of the population (undereducation or overeducation). Neo-Keynesian economists like Dean Baker, Joseph Stiglitz, Jeff Madrick, Lawrence Mishel, Heidi Shierholz, and Paul Krugman thus argue that conventional narratives of skill-biased technological change and skills/jobs mismatch simply do not provide adequate explanations for youth employment dynamics. Drawing broadly on Keynesian principles, they reject supply-side rationalities that suggest human capital development generates its own demand and thus that education is either the primary cause and/or solution to high levels of unemployment and underemployment among youth. In contrast, they observe that in the current economic climate, advanced economies like the United States and Canada have simply not been creating enough jobs in aggregate relative to demand. They also note that the fastest growing job opportunities are in low wage sectors that do not require advanced educational credentials, skills, or training, and contrary to Autor’s ‘jobs polarization’ theses, they point out that there simply hasn’t been any growth in high skill and high wage employment over the last decade. Jeff Madrick (2013) summarizes the consequences for young workers in the United States:

The economy is simply not producing enough jobs. Between 1992 and 2000, 18 million people joined the workforce. Between 2000 and 2010, only 2.2 million were able to join. With far fewer jobs available, those with more experience get picked first, while those entering the workforce for the first time get picked last. The recession has exacerbated this trend, as older workers delay retirement in hopes of rebuilding the savings lost in the downturn. Those aged fifty-five and older are the only group whose labor-force participation has actually increased in recent decades. They are taking the part-time jobs kids used to get as store clerks and cashiers … Meanwhile, recent college graduates are left to take the jobs that once went to high school graduates and even dropouts.

Across advanced economies, college graduation rates have risen to historic levels at the same time that job prospects and wages for college-educated workers have precipitously fallen. For instance, in the United States ‘between 2000 and 2012, the real (inflation-adjusted) wages of young high school graduates declined 12.7 percent, and the real wages of young college graduates declined 8.5 percent’ (Sheirholz et al., 2013). This reflects, of course, that many skilled college and university graduates are stuck in jobs that do not require advanced skills or a degree. According to the OECD, Canada has the highest overqualification rate of advanced nations at 27 percent for all of its workers (Finlayson, 2014). This helps to explain attraction to the narrative that young Canadians are overeducated. However, the United States is not far behind with an overqualification rate of 20 percent. This rate spikes for young college graduates:

The share of Americans ages 22 to 27 with at least a bachelor’s degree in jobs that don’t require that level of education was 44 percent in 2012 … a year-long survey ending in July 2012 of 500,000 Americans ages 19 to 29 showed that 63 percent of those fully employed had a bachelor’s degree, and their most common jobs were merchandise displayers, clothing-store and cellular phone sales representatives. (Peralta, 2014)

In the highly touted STEM fields, educational systems are in fact producing many more graduates than there are jobs, raising further questions concerning the SBTC and skills/jobs mismatch arguments. The Economic Policy Institute reports that for every two students graduating with a STEM degree from an American university each year, only one is hired into a STEM job (Salzman et al., 2013). In information science and engineering, the United States graduates 50 percent more students than are hired into those fields each year, while real wages for these workers are stuck at 1990 levels (Salzman et al., 2013). This isn’t to argue that there are not situations where industry is having a hard time filling positions, but that the reasons, as those like Peter Cappelli (2012) have documented, do not reflect an overall skills shortage, but that corporations have cut or eliminated on-the-job training and are often offering such low pay that they cannot find skilled workers willing to take open positions. Where there are shortages of skilled workers such as in the trade professions, this reflects policy decisions in secondary and higher education since the 1990s where vocational education was devalued under the rationale that everyone was now going to become a knowledge worker or an entrepreneur (a rationale that has not panned out). Moreover, substantial evidence indicates that global educational systems are currently producing a global surplus of credentialed, highly skilled workers far beyond current employment requirements. The effect of this surplus has been to empower transnational capital to exploit a global ‘labor arbitrage’ or ‘auction’ for cut-rate low and highly skilled labor (i.e. race to the bottom) that has eroded the employment prospects and repressed wages for young workers (Bellamy Foster and McChesney, 2012; Brown et al., 2011).

Given these observations, neo-Keynesians argue that youth employment is contingent upon a much broader set of political-economic problems to be resolved through state intervention and progressive policy solutions. They point to three decades dominated by supply-side management rationalities and regressive tax policies; steep cuts to public investments in infrastructure, education, and social services; deregulatory excesses leading to multiple speculative financial bubbles and busts; the decline of unions and bargaining power of workers; soaring compensation by executives, hedge fund managers, and bankers; and the domination of state policy by transnational corporate interests increasingly unmoored from geographical constraints and primarily concerned with socializing their costs (and losses) while keeping taxes and wages as low as possible (regardless of the social or environmental costs) (Krugman, 2011; Reich, 2012; Stiglitz, 2012). As a result, and despite the fact that the productivity of the average worker has increased dramatically over the last three decades, economic gains have accrued almost exclusively to investors, owners, and executive managers. Simultaneously, as middle and working class livelihoods have dramatically declined, households have taken on unprecedented levels of private debt to keep up with soaring costs of living. These trends have created structural problems and imbalances that have had devastating consequences for youth employment including ever-deeper recessions, jobless recoveries, and anemic rates of economic growth. The result has been a stunning expansion of inequality and staggering economic insecurity and uncertainty, felt most acutely by young workers. Heidi Shierholz, Natalie Sbadish, and Nicholas Finio (2013) of the Economic Policy Institute thus attribute the dismal job market for youth to stagnating economic growth and the exhausted purchasing power of workers. They note:

Ultimately, neo-Keynesians suggest that education simply cannot resolve the youth employment crisis and/or labor market insecurities more broadly. Paul Krugman (2011) notes:

… if we want a society of broadly shared prosperity, education isn’t the answer – we’ll have to go about building that society directly. We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages. We need to guarantee the essentials, above all health care, to every citizen. What we can’t do is get where we need to go just by giving workers college degrees, which may be no more than tickets to jobs that don’t exist or don’t pay middle-class wages.

Neo-Keynesians like Krugman thus advocate for rethinking public policy to directly address the youth employment crisis. This includes using the state to provide demand-side stimulus through infrastructure spending, public investment, and public job creation. Their general prescription for addressing the crisis is therefore oriented to a new social compact that includes the extension of economic rights as well as civil and political rights to workers. Neo-Keynesian perspectives thus rightly reject the ideological claims of conventional economists that if left alone capitalism naturally tends toward equilibrium and full employment, particularly if educational systems continue to keep pace with technological development. They also recognize the inherently political nature of markets and the centrality of the state in providing the rules of the road for capital accumulation. However, neo-Keynesians are primarily concerned with finding the right policy solutions to make capitalism ‘work’ in the interest of generating demand for economic growth and full employment. In other words, they assert that the disequilibrium tendencies of capitalism can be brought into equilibrium through enlightened use of state interventions. Here the labor market insecurities of youth are largely viewed as a governmental problem and a policy issue rather than symptomatic of deeper conflicts located within capitalism itself. Thus, like conventional perspectives, neo-Keynesians view the youth employment crisis primarily through a technocratic lens. However, rather than looking to self-regulating markets and market-based educational logics of human capital development as solutions to the crisis, they advocate for new regulatory mechanisms to stimulate aggregate demand and promote direct generation of employment through the state (which would also include training and retraining workers for new types of jobs demanded by technological change). Therefore, absent from both conventional and neo-Keynesian perspectives is any sense of how class relations (as a bundle of conflicts over financial, cultural, and social capital) and real historical political conditions (balance of social, racial, gendered, and ideological forces in relation to the state and capital) function to shape the underlying dynamics of education and employment in relation to the inherent structural contradictions and disequilibrium tendencies of capitalism (Bowles and Gintis, 1975, 2011).

Marxian Perspectives: Youth Employment as Symptom of Systemic Crisis

The analytical power of Marxian perspectives is that they position the plight of young workers within a broader set of dynamics that go beyond the surface of supply and demand frameworks of orthodox neoliberals and neo-Keynesians. They cast doubt on the capacity of either education or state policy to generate and maintain equilibrium and full employment under capitalism. Rather education, employment, and state policy are viewed as reflective of more complex and irreconcilable tensions. Foremost is recognition that capitalism’s own internal necessity to perpetually expand contains within itself fundamental disequilibrium tendencies and barriers to accumulation that are internal to the normal functioning of the system. This stems from four basic features of capitalism (Harvey, 1991, 2007, 2010, 2014; Marx, 1992[1867], Vol. 1).

David Harvey (1991, 2007, 2010, 2014) suggests that these features of a capitalist political economy are inherently dynamic, unstable, ever shifting, geographically contingent, interdependent, and conflict ridden. Harvey argues that crises arise out of various types of potential barriers or antagonisms to the continuous realization of surplus value along the circuit of accumulation (M-C-M’). He lists eight such antagonisms that can disrupt accumulation:

(1) inability to mass together enough original capital to get production under way (“barriers to entry” problems); (2) scarcities of labor or recalcitrant forms of labor organization that can produce profit squeezes; (3) disproportionalities and uneven development between sectors within the division of labor; (4) environmental crises arising out of resource depletion and land and environmental degradation; (5) imbalances and premature obsolescence due to uneven or excessively rapid technological changes driven by the coercive laws of competition and resisted by labor; (6) worker recalcitrance or resistance within a labor process that operates under the command and control of capital; (7) underconsumption and insufficient effective demand; (8) monetary and financial crises (liquidity traps) inflation or deflation) that arise within a credit system that depends on sophisticated credit instruments and organized state powers alongside a climate of faith and trust. At each one of these points internal to the circulation process of capital, there exists an antinomy) a potential antagonism that can irrupt as an open contradiction (to use the language that Marx frequently deploys in Capital). (Harvey, 2010: 337–8)

Any of these potential antagonisms whether stemming from capital/labor relations, nature, technology, or financial crisis can produce constraints to expanded reproduction. However, as attempts are made to constantly maximize and expand productive potential, there is a general tendency to generate excess capacity and capital relative to available demand and reinvestment opportunities. Such crises of overaccumulation, Harvey argues, create situations where surpluses of capital and surpluses of labor sit side by side with no clear way of reconnecting them. This is visible today as trillions of dollars in corporate profits sit on the sidelines with seemingly few avenues for profitable reinvestment. At the same time, growth continues to lag while the majority of workers, and especially the young, confront declining wages and growing employment insecurity, debt, and income inequality (problems which place a further drag on demand and economic growth). In the 1980s and 1990s, the incorporation of vast labor reserves and the opening of new markets through trade ‘liberalization’ in Asia and across the global South, the intensive movement of capital into ever riskier forms of deleveraging and financial speculation, combined with tax cut stimulus and the extension of easy credit to consumers for houses and consumer goods were able to offset these tendencies to overaccumulation. However, as those like John Bellamy Foster and Robert McChesney (2012) argue, such strategies now appear exhausted as capital confronts new geographical (imperial), technological (innovative), and ecological (natural) barriers to expansion. They observe that the consequences of global economic stagnation will disproportionately impact the next generation. This is represented symptomatically by the employment crisis facing youth across large swaths of the world.

The world economy as a whole is undergoing a period of slow-down. The growth rates for the United States, Europe, and Japan at the center of the system have been sliding for decades. In the first decade of this century these countries experienced the slowest growth rates since the 1930s; and the opening years of the second decade look no better. Stagnation is the word economists use for this phenomenon. In human terms it means declining real wages, massive unemployment, a public sector facing extreme budget crisis, growing inequality and a general and sometimes sharp decline in the quality of life. It produces all sorts of social and political crises, and these crises and their consequences will likely be the defining events of the coming generation. For the majority of the population – excluding the big winners at the top – it feels like an endless crisis. (Bellamy Foster and McChesney, 2012: vii)

The central insight of Marxian crisis theory is that such stagnation does not constitute an aberration, but is in fact the normal state of mature capitalist economies. Thus the brief period of rapid growth and near full employment in the postwar era in North America, Western Europe, and Japan during the so-called Golden Age of capitalism is to be viewed as an exception rather than an historical norm, made possible largely by massive devaluation of capital during the war. As international competition began to mature in the late 1960s and 1970s, the global economy began to revert to ‘normal’ patterns of slow growth similar to that of the 19th century (Brenner, 2006; Galbraith, 2014). China and India over the last 30 years are also examples of rapid economic growth; however, significant barriers to long-term growth are now increasingly visible in both of these national contexts. There is thus a growing recognition even among orthodox economists such as Lawrence Summers (2014), Paul Krugman (2013), and Robert Gordon (2012) that ‘secular’ stagnation has now become the new normal and is likely a permanent condition. Alan Nasser (2014) describes the consequences of permanent stagnation for workers:

… capitalism has reached an overripe state in which workers are suffering slow-motion but inexorable obsolescence and pauperization and are forced to rely increasingly on borrowing to make ends meet, while the system is now capable of producing unparalleled private profits which cannot be profitably invested in private production, lent to cash-strapped households or entirely consumed …We are left with a superfluity of both workers and funds representing potential purchasing power and/or investment, and a paucity of profitable investment opportunities in the private sector. This is typical of capitalist crisis, in which we have too much capital and too many workers.

Orthodox diagnoses and prescriptions cannot explain or resolve the youth employment crisis because they do not recognize that its origins lie within the property, power, and class relations internal to capitalism (and how the property and class structure is inflected by history, ideology, geography, race, gender, ethnicity, nationality, etc.). And, because of this, they refuse to acknowledge the need to alter the underlying dynamics of the system. Instead neoliberal economists offer human capital development and endless deregulated speculative bubbles as ways to stimulate employment and growth. Neo-Keynesians rightly reject austerity and support expanded government social investments to stimulate economic activity. However, like the neoliberals, they never question the underlying logic of private appropriation of surplus value and endless compound growth (no matter the mounting social and ecological consequences) that make a return to Golden Age Keynesian equilibrium and full employment impossible. Therefore to counter generational precarity and promote flourishing livelihoods (i.e. work defined by its social value and not simply its economic utility) for the next generation will require a much broader conversation and forward-looking exercise of the imagination. If the projections of both orthodox and heterodox economists are to be believed, the future currently appears as one of increasing precariousness defined by a vulgar race to the bottom for ever more scarce resources and degraded livelihoods for the majority of workers. However, unlike most orthodox economists, heterodox thinkers like Eric Olin Wright (2010), Richard Wolffe (2012), Alan Nasser (2014), David Harvey, (2014), James Galbraith (2014), David Graeber (2013) and others have argued that there is no reason why we have to accept this state of affairs and why we can’t make basic modifications to our economic and political systems to ensure that everyone who wanted one had access to a well-remunerated livelihood. For instance, Nasser (2014) states:

The diagnosis of the current malaise points to the only workable prescription. No one thinks that an entirely automated economic system is possible or desirable. There is always work to be done that can and should be done by people. Since there are too many workers for the work that needs to be done, if what work there is were to be distributed among all workers, all workers would be employed, and at much shorter hours. Leisure time would increase greatly … Wages could under these circumstances be increased by directing to workers the revenue gains from ever-increasing productivity, and no less importantly, by turning the uninvestible trillions held by financial and nonfinancial corporations over to working people … There you have it: full employment, less work, more leisure and higher incomes.

Realizing such alternative possibilities for the future of livelihoods requires engaged contestations over ideology, which brings the question of education back into the discussion, but in a different frame. The financial crisis has made contradictions within global capitalism, such as growing inequality and labor market insecurity among the young, sharper and more visible. Such contradictions are readily apparent in the inadequacy of overeducation and undereducation narratives in the United and Canada as explanations for the youth employment crisis. As I have pointed out, young people are here said to be either undereducated or overeducated in the wrong areas, requiring skill enhancement in technical fields, innovation, and entrepreneurialism. However, as the relative scarcity of STEM jobs in relation to qualified graduates in the United States and Canada suggests, the reality is that the new economy requires a relatively small number of highly skilled workers with advanced technical and cognitive capacities. To complicate matters, and despite rhetorical emphasis on generating high level human capital through education in order to save capitalism, schools and universities are increasingly subject to intensive forms of defunding, standardization, routinization, and corporate managerialism that are eroding their educational missions (Arthur, 2012; Means, 2013a; Newfield, 2008; Saltman, 2012; Slater, 2014). While strategic investments are being made, they are typically concentrated in areas of secondary education that serve the elite and in research areas of higher education likely to bring a return to private industry – such as energy and mineral extraction, business innovation, pharmaceuticals, biotechnology, and military-defense (Pierce, 2012). It is difficult to see how these trends will result in enhancing the broad-based creative, technical, and innovative labor market capacities of all young people. In contrast, dominant educational trends appear more likely to reproduce a stratified political economy and division of labor consisting of a small number of elite owners and managers alongside a mass of workers facing declining wages and likelihood of accelerating rates of technologically-induced obsolescence (Means, 2013b, 2014).

Calls for human capital development and/or the view that new state regulations can resolve this situation for young workers fail to make these connections between the structure of education and current objective demands of capital for labor. While education can enhance capacities of labor and therefore improve employment opportunities for individuals (not to mention promote critical forms of culture, knowledge, and consciousness), and state policies can stimulate economic activity and employment through various mechanisms, these strategies cannot resolve deeper structural trends that are hollowing out jobs, driving down wages, and creating vast surplus populations of low and highly skilled workers alike. We need to think far more creatively about the kinds of societies we want to live in – societies where young people, workers, and the environment are subject to a vulgar race to the bottom, or societies committed to flourishing forms of democratic social organization and nature–society relations. The youth employment crisis is now often described in the media as a ‘ticking time bomb’ (Blua, 2012; Coy, 2011) reflecting growing anxieties among elites that a potential ‘lost generation’ of young workers poses a looming threat to the status quos. This is a rational concern particularly in light of the eruption of youth-led protests, riots, and social mobilizations in recent years from London, Madrid, Santiago, Cairo, to Montreal that have sought to directly confront and challenge neoliberal hegemony (Mason, 2012). Ultimately, being in solidarity with the young is necessary for achieving alternative economic, social, educational, and work arrangements as a foundation for sustainable and emancipatory futures beyond neoliberal precarity (De Lissovoy, 2008).