The financial and eurozone crises, along with the global economy’s slow recovery, has especially impacted young people in Spain, Italy, Greece and Croatia, with unemployment rates for them hitting as high as 60%. With more than 5 million young Europeans out of work, what actions should Europe take to avoid the threat of a lost generation?
Looking just at employment rates doesn’t adequately explain the sort of measures young people need. The NEET indicator (which describes the number of young people who are not in education, employment or training) reports that 16% of 15-29 year olds throughout the EU now fit into this category, nearly 30% in Greece.
That underlines the need for youth to finish their studies and training, and for policies to encourage that as well as stimulate more job-creation. In Finland research shows that the chances of being unemployed are greater for young people who interrupt their education; their long-term employment rate is significantly lower than for those who have at least completed secondary school. These studies must be taken seriously, because they show that those who rely on a comprehensive school education only are generally not as successful in working life, with career patterns that are often brief and fragmented. We know that all young people deserve their place in society and that the risk of social exclusion can be serious. But we should also recognise the economic consequences of long-term unemployment, it’s estimated that just one young person living on the margins of society can cost the community upwards of €1m.
The task now facing many decision-makers is to create solutions for young people that will help them move in from outcast status to education, gain practical work experience and a sustainable job.
Different factors shape labour market conditions in different countries, but the most successful countries in terms of increasing youth employment have been Germany and Austria, where less than one in ten of the young people who participate in the labour market are without a job. Denmark, along with Germany and Austria, are all apprenticeship training-based nations, yet it’s not advisable to draw general conclusions from this. It may well be misleading to argue that increasing the emphasis on apprenticeship programmes will automatically help young people find employment across Europe.
A pivotal factor that will affect the smooth functioning of the labour market is whether or not the EU helps with the training workers need to update their expertise.
In April of last year the European Youth Guarantee (EYG) was set up, using Austria and Finland as its model. The aim is to ensure high-quality and concrete offers of employment and apprenticeships, and failing those, practical work experience or continuing education for young people under the age of 25 if they have been out of work for more than four months. While the European Commission says that while the EYG could cost about 20 billion euros per year Europe-wide, “inaction would be much more costly.” Young people out of school, work or training estimated to cost the €153bn (1.21% of GDP) a year – in benefits and foregone earnings and taxes.
In many EU countries, the EYG signals new types of cooperation, even if the emphasis isn’t always the same. Some countries may see a need to renew vocational education and further consolidate public employment services. In Finland, even though the youth guarantee model was established several decades ago, a new model was launched at the outset of 2013. The Finnish guarantee promises young people under 25 and also recent graduates under 30, a job or practical work experience, the right to study, a workshop or rehabilitation within three months of becoming unemployed.
Eurofound, and EU agency involved in development of social and work-related policies, has found Finland’s model comprehensive and viable. It isn’t the responsibility of any one ministry, but rather it is a social undertaking that encompasses all government departments and is being implemented in collaboration with municipalities, labour market organisations, business enterprises, schools and NGOs. The Finnish ministry of employment and the economy is responsible for paying salary support to employers who hire young people – €700 monthly for a maximum period of 10 months, while the ministry of education and culture takes care of the lion’s share of educational services, workshop activities and youth work targeted at searching for young people at risk of social exclusion.
The problematic labour market has meant youth unemployment has continued to grow in Finland in spite of the youth guarantee programme, but a positive note is that young people are unemployed for much shorter periods than adults. Training, practical work experience and so on helps a young person through difficult times.
The future of Europe’s youth is fundamental to our European values of freedom, equality, democracy and an open society. No price tag can be put on these core values, but EYG proves to be cost-effective compared to the alternative. Decision-makers must now choose whether to address the current lack of vision with a new sense of hope, or alternatively to accept that there will be a lost generation of young Europeans.
Photo credit: Labour Youth