Young people entering adulthood in this economically turbulent decade face dire prospects for employment and rewarding careers, posing risks of social unrest even in some of the world's most prosperous countries, the World Economic Forum warned Thursday.
As more than 1,600 business, political and social movers and shakers prepared to descend on the Swiss resort of Davos next week, the Geneva-based forum issued its annual assessment of global economic pitfalls, identifying income inequalities and what it calls the "lost generation" of jobless youths as issues that should concern the comfortable as much as the afflicted.
"Urgent, bold and collective action is required to promote job creation and address the skills mismatch" that deprives more than one in four people younger than 25 of productive work, Global Risks 2014 reports, based on analysis contributed by some 700 experts.
"The generation coming of age in the 2010s faces high unemployment and precarious job situations, hampering their efforts to build a future and raising the risk of social unrest," the report says.
In advanced economies, such as the United States, young people are graduating with large debts from "outmoded educational systems" that fail to provide them with the skills employers are looking for, the report says. In developing countries, two-thirds of young people aren't filling their economic potential.
Even those with jobs are vulnerable to the post-recession ravages that have shackled job growth and salaries in developed countries and brought about a polarization of incomes in developing economies, the forum says of the worsening income disparity and the social resentment it nourishes.
Income inequality has been growing steadily for decades within the Organization for Economic Cooperation and Development, which includes the United States among the two dozen most affluent countries. An OECD report last year found the least disparity in Slovenia, Denmark and Norway, and the biggest difference between the top and bottom income-earners in Chile, Mexico and Turkey. The U.S. disparity was described as above-average and more pronounced than in most of Europe.
The forum report, issued before the five-day schmoozfest that begins Wednesday, identifies fiscal crises in key economies and shortages of clean water as other threats to economic and social stability that should be of "highest concern." But with most macroeconomic analysts saying the global economy has turned a corner, those risks were assessed to be less likely or not imminent.
Climate change and severe weather events could also throw the world economy into crisis again, the report warns, urging the conferees to focus on environmental as well as financial risks.
"Global risks can only be effectively dealt with if there is a common understanding of their importance and interconnected nature, and a readiness to engage in multistakeholder dialogue and action," the forum report concludes, calling on the Davos delegates "to look at risks in a holistic manner and to stimulate discussions on ways to address global risks more effectively."