Employers hire against capabilities young workers have had no chance to build

The argument

Proponents of education and training programmes locate youth unemployment in a gap between what employers need and what young people have had the opportunity to acquire. On this account the labour market does not reward potential, because potential cannot be verified at the point of hiring. It rewards demonstrated capability, and demonstrated capability is the one thing a person at the start of working life necessarily lacks. Advocates argue that this makes youth unemployment structural rather than a matter of effort or willingness. The programmes they propose are intended to break that circularity by supplying the capability outside the labour market, since the labour market will not supply it. Supporters point out that employers have little reason to fund general training themselves, because a worker whose skills are portable may take them elsewhere, so the training that would most help young people is the training nobody has an incentive to provide. On their account this is a straightforward case of a good that a public body must pay for or nobody will. Advocates also argue that the alternative solutions take the capability gap as fixed and work around it. Matching a young person to a vacancy they cannot yet do, or financing a venture they lack the skills to run, is said to redistribute the problem rather than remove it. Proponents hold that capability is the one input the others depend on: a matched candidate still has to be able to do the work, and a funded founder still has to be able to run the business. Supporters conclude that building the capability first is what makes every other intervention worth attempting, and that programmes which do so are therefore the solution rather than one option among several.

Premises

Counter-arguments

Critics argue that programmes of this kind train for the labour market of the recent past, because curricula are set before the vacancies they are meant to fill appear. They also note that where unemployment is caused by too few jobs rather than too few skills, training raises the qualifications of the queue without shortening it. A further objection is that the approach places the burden of adjustment on young people, treating the problem as a deficit in them rather than in how employers recruit.

Rejecting the premises

[Rejecting P1] Employers routinely hire on proxies such as institution attended or personal connection, which track neither capability nor potential. [Rejecting P2] Employers in tight labour markets do fund general training, and apprenticeship arrangements exist precisely to recover its cost. [Rejecting P3] Programmes can only supply capability that has already been specified, so they lag the requirements they are meant to meet. [Rejecting C] If the number of vacancies is the binding constraint, building capability changes who gets the available jobs without reducing unemployment at all.