Young people should work for free for up to two years to gain experience, youth and business leaders said at the World Economic Forum in Davos Thursday.
A new UN resolution to enshrine the importance of a couple of years of voluntary work for young people was urged by delegates including Maurice Lévy, chairman and chief executive of Publicis Groupe, as part of a CNBC-moderated debate on how to avert a lost generation of unemployed youth.
“It’s a bad idea which fails to recognize the heterogeneity of the population,” Peter Diamond, economics professor at the Massachusetts Institute of Technology, said. “These would be wasted years for some.”
The world needs 600 million new jobs in the next decade to cope with a rising population and the effects of the financial crisis, according to figures released earlier this week by the International Labor Organization.
Unemployment is particularly acute for young people, with the rate of youth unemployment up from 11.7 per cent in 2007 to 12.7 percent in 2011 globally, with advanced economies particularly badly hit.
An estimated 6.4 million young people have dropped out of the labor market because they don’t believe they will ever find a job, according to the ILO.
This is particularly worrying because young people who have a long period of unemployment at the start of their careers are likely to lag behind in earnings for the rest of their lives.
Tidjane Thiam, chief executive of insurer Prudential, said that minimum wage legislation across Europe was an "enemy" of young people and a "machine to destroy jobs" at the conference.