Neoliberalism and Its Impact on Youth: Rising Economic Insecurity and Social Discontent

Context

Recent youth-led protests across different parts of the world, particularly in Europe and South Asia, have brought growing attention to economic inequality, unemployment, declining social mobility and dissatisfaction with existing economic systems. These developments have renewed discussions on how neoliberal economic policies affect young people’s opportunities and aspirations.

What is Neoliberalism?

Neoliberalism is an economic and political approach that gained prominence during the late 1970s and 1980s, emphasising market competition and a reduced role for the state in economic activities.

• Historical Evolution: It became prominent under leaders such as Ronald Reagan in the United States and Margaret Thatcher in the United Kingdom. In India, the 1991 Liberalisation, Privatisation and Globalisation (LPG) reforms reflected several market-oriented principles.
• Core Principles: It advocates deregulation, privatisation, fiscal discipline, free trade, capital mobility and greater private-sector participation.
• Role of the State: Unlike the post-war Keynesian approach, which emphasised full employment and public welfare, neoliberalism gives greater importance to market-led resource allocation, inflation control and limiting government expenditure.

How Does Neoliberalism Affect Young People?

• Economic Growth Without Adequate Employment: Rising GDP and corporate profitability have not necessarily generated sufficient secure and well-paying employment opportunities, creating concerns about jobless or job-poor growth.
• Wage Stagnation and Inequality: Flexible labour arrangements, weakening collective bargaining and contractual employment can reduce workers’ bargaining power, resulting in wages failing to keep pace with productivity gains.
• Weakening Consumer Demand: When household incomes remain relatively low, purchasing power declines, potentially reducing consumption, investment and employment generation.
• Reduced Public Investment: Excessive emphasis on fiscal consolidation can constrain expenditure on public education, healthcare, housing and government employment, limiting opportunities for upward mobility.
• Expansion of Insecure Employment: Gig-based, platform and temporary contractual work often lack predictable incomes, pension benefits, health insurance and adequate social protection.

What is the Indian Context?

India’s demographic advantage is closely linked to its ability to provide productive employment and economic opportunities to its expanding young population. However, several structural challenges remain.

• High NEET Population: A significant proportion of young people are neither employed nor pursuing education or skill training, indicating underutilisation of India’s demographic potential.
• Educated Unemployment: The ILO’s India Employment Report has highlighted the concentration of unemployment among educated youth, reflecting the disconnect between educational qualifications and available employment opportunities.
• Skill and Employment Mismatch: Many graduates spend considerable time and resources acquiring formal education but struggle to find jobs matching their qualifications and expectations.
• Widespread Informality: A large section of young workers enters informal employment characterised by low wages, uncertain working conditions and inadequate social security.
• Limited Quality Employment: The expansion of economic activities has not always translated into sufficient formal-sector jobs with stable incomes and career progression.

What are the Challenges Arising from Youth Discontent?

• Social Frustration and Alienation: Persistent unemployment and financial insecurity can create feelings of exclusion, reduce social participation and delay important life decisions such as marriage and independent living.
• Political and Social Instability: Economic dissatisfaction may contribute to public protests, declining institutional trust, political polarisation and support for radical movements.
• Loss of Human Capital: Prolonged unemployment and underemployment prevent young people from developing their professional capabilities, resulting in a loss of productive potential for the economy.
• Intergenerational Inequality: Limited access to quality education, stable employment and affordable housing can make it difficult for disadvantaged young people to improve their socioeconomic position.
• Demographic Dividend at Risk: Failure to generate productive employment may turn India’s youthful population into an economic and social challenge rather than a development advantage.

Way Forward

• Promote Labour-Intensive Industries: Employment policies should encourage sectors such as textiles, food processing, leather, tourism and renewable energy manufacturing, which have the potential to absorb large numbers of workers.
• Strengthen Social Infrastructure: Higher public investment in healthcare, education, affordable housing and childcare can simultaneously improve human development and generate employment.
• Improve Education–Employment Linkages: Educational institutions should strengthen vocational training, apprenticeships, industry partnerships and practical skill development according to emerging labour-market requirements.
• Extend Social Protection: Minimum wage safeguards, health insurance, pension coverage and workplace protections should be extended to gig workers, platform workers and contractual employees.
• Encourage Inclusive Economic Growth: Growth strategies should focus not only on investment and productivity but also on fair wages, employment creation and equitable distribution of economic opportunities.
• Adopt a Human-Centred Development Approach: As emphasised by welfare economist Amartya Sen, development should expand people’s substantive freedoms and capabilities. Market efficiency must therefore be complemented by public investment and social protection.

Conclusion

The growing dissatisfaction among young people reflects the importance of linking economic growth with employment, dignity and social mobility. India’s demographic dividend cannot be realised through GDP expansion alone; it requires an inclusive development model that combines market efficiency with an active welfare state, productive employment and equal opportunities.

Source : The Hindu