eu effective practice guide / general job creation approaches / the green economy / corporate social responsibility / criteria for effective practice / features / index / global epg map
The Youth Unemployment Crisis
Before a problem can be addressed, it needs to be fully understood – for just as there is no single cause of the youth unemployment crisis, there is no single cure. The facts are that more than five million young people in the EU are jobless[i]. More than seven million are not in employment, education or training (NEET). Whether you view these millions as a massive work force going to waste, costing the economy billions[ii] or as individuals denied the chance to earn a living, give back to their communities and develop personally and professionally, it is undeniably true that Europe is experiencing a crisis[iii]. This section of the guide will explain general causes and effects of the crisis, but research into your own community or country is recommended.
Blame for the high youth unemployment rates is often placed on the financial downturn, but the recession merely exacerbated existing, systemic defects in labour markets, school curricula and other structures. However, in combination with labour market policies, the recession affected the quality and security of jobs open to young people. Temporary positions, part-time work, zero-hour contracts and other precarious job paths are the only recourse for many young people to earn money and/or gain experience.
Some get trapped in these low-paid jobs, unable to find anything better. In 2012, 42% of young workers were on a temporary contract, and 32% were working part-time[iv]. In positions like these, young people are often underemployed, so they work less than they would prefer[v]. This carries an economic and personal cost, as young people are essentially barred from working to their full potential.
Another cause is a general disinclination for entrepreneurship, a proven job creator and economy booster. Europeans, when compared to those in non-EU countries, are generally reluctant to pursue self-employment. In 2012, 37% of Europeans said they would rather be self-employed than an employee – down from 45% in 2009. When Europeans were asked why they are averse to starting an enterprise, they cited financial risks and difficulties in accessing capital. Young Europeans are more open to self-employment than their elders, but unfortunately, banks are often hesitant to lend to young people, as they often have no collateral and are seen as inexperienced[vi][vii].
Ultimately, the skills mismatch is a significant contributor to the youth unemployment crisis. Despite an overabundance of young people out of school and ready to work, businesses are demanding skills that they never had occasion to get. Young people therefore experience a difficult school-to-work transition, and graduating from school often means a potentially long period of unemployment. Meanwhile, frustration abounds among businesses as they cannot find suitable candidates for their positions – there are a shocking two million unfilled vacancies in the EU[viii].
The skills mismatch is caused by a combination of school curricula in Europe neglecting vocational, business and employability training in favour of more traditional academics, and a disconnect between the private and educational sectors[ix]. The skills mismatch can be addressed by integrating practical education, like training and apprenticeships, with traditional curricula. Known as a ‘dual system’, this is the educational model of the countries with the lowest youth unemployment rates in Europe[x]. This system gives students hands-on work experience and helps them network with businesses.
On scales large and small, the youth unemployment crisis is having economic, social and political repercussions across Europe, which will be felt for years. Mass unemployment is always of serious concern to markets and governments as well as communities and families. It is a tremendous waste of money, talent and time, and it makes for extremely unstable environments. On a personal level, young Europeans are suffering from the disillusionment, disenfranchisement and mental illness unemployment often inflicts[xi].
Unemployment is an exceedingly costly phenomenon. According to the European Commission, in 2011, NEETs cost the EU a staggering €153 billion. Huge sums are spent on unemployment benefits and support schemes. At the same time, economies lose out on the money these unemployed millions could be generating through taxes, private sector growth and personal spending. For example, if just 10% of the 7.5 million NEETs were suddenly employed, then they would generate €15 billion each year[xii].
Youth unemployment is not only an immense drain on already struggling financial systems, but it worsens income inequality as well[xiii]. Increases in poorly regulated and low-paid work, like part-time and temporary jobs, have widened the already considerable gap between rich and poor. Spain, Ireland, Greece, Italy and Portugal in particular have seen huge increases in income inequality as unemployment takes its toll.
This increasingly unfair economic system will have damaging and lasting social effects. To stave off poverty, many youths have turned to their parents for financial support, but this can burden already strained families. Regrettably, the longer an individual is unemployed, the less likely they are to be hired. Unfortunately, when and if a young person out of work for a long period secures a job, they will typically earn less than their peers for decades to come. This effect is known as ‘wage scarring’, and its negative economic effects are obvious. As a lack of income will result in poverty and all the social ramifications that entails, there exists the potential for inter-generational poverty, which means the negative effects of unemployment are passed down[xiv].
For all these reasons, unemployment is especially damaging on a personal level. As young people cannot work, earn an income or achieve independence, many lose faith in their abilities, prospects and future. In an effect known as ‘social exclusion’, young people find themselves isolated not only from the labour market but also from their social networks and society at large. Their perception of larger systems, such as communities, governments and the private sector, weakens. All these feelings can lead to mental health issues like depression or, more seriously, to crime, drugs and violence. Politically, a multitude of unemployed young people is considered a security risk[xv]. It is no coincidence that the Arab Spring occurred during high youth unemployment in the Middle East and North Africa[xvi].
Even if these more serious effects are avoided, young people who experience unemployment will still have to cope with more lasting problems, like skill loss, CV gaps and wage scarring. In other words, their unemployment will affect them forever.
The youth unemployment crisis is ‘Europe’s most pressing problem’. Though the crisis receives significant attention from media outlets, governments and politicians, real, effective action must be taken as soon as possible. Countless people, organisations and institutions have already found ways to start tackling the problem, and there are success stories out there. This guide will highlight the feasible, workable and effective initiatives already helping young people all over Europe.
[i] Anon. 8.11.2013. EU measures to tackle youth unemployment. http://europa.eu/rapid/press-release_MEMO-13-968_en.htm.
[ii] 22.10.2012. Eurofound contributes to EU Presidency on ‘Developing sustainable youth employment policies in an era of fiscal constraints 22-23 October 2012. http://www.eurofound.europa.eu/press/releases/2012/121022.htm.
[iii] Kate Connolly. 02.07.2013. Angela Merkel: youth unemployment is most pressing problem facing Europe. http://www.theguardian.com/world/2013/jul/02/angela-merkel-youth-unemployment-europe.
[iv] Anon. 2012. TYEC “Tackling Youth Employment Challenge” Measures and strategies for European Social Dialogue Actors. http://www.alda-europe.eu/newSite/public/doc/514-Final-Publication.pdf.
[v] Anon. 18.03.2014. Third of young people trapped in underemployment by 2018, warns LGA. http://www.local.gov.uk/media-releases/-/journal_content/56/10180/6020941/NEWS.
[vi] Anon. 09.01.2013. 37% of Europeans would like to be their own boss. http://europa.eu/rapid/press-release_MEMO-13-7_en.htm, http://ec.europa.eu/public_opinion/flash/fl_354_en.pdf.
[vii] Anon. 2013. Global Employment Trends for Youth 2013. http://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/documents/publication/wcms_212423.pdf.
[viii] Anon. Youth employment. http://ec.europa.eu/social/main.jsp?catId=1036.
[ix]Nye Cominetti, Paul Sissons and Katy Jones. Jul 2013. Beyond the business case: The Employer’s role in tackling youth unemployment. http://www.theworkfoundation.com/DownloadPublication/Report/336_Employer’s%20Role%20FINAL%202%20July%202013.pdf.
[x]Dannis Görlich, Ignat Stepanok and Fares Al-Hussami. Jan 2013. Youth Unemployment in Europe and the World: Causes, Consequences and Solutions. http://www.ifw-kiel.de/wirtschaftspolitik/politikberatung/kiel-policy-brief/kpb-2013/KPB_59.pdf.
[xi] Daniel Tkatch. 19.03.2014. Overqualified and underpaid. http://www.theeuropean-magazine.com/daniel-tkatch–4/8242-youth-unemployment-and-europes-brain-drain.
[xii] Anon. 2013. Youth Unemployment. http://ec.europa.eu/europe2020/pdf/themes/21_youth_unemployment.pdf.
[xiii] Caitlin Del Sole. Jul 2013. Can an EU Budget Deal Save the Lost Generation? http://www.europeaninstitute.org/July-2013/can-an-eu-budget-deal-save-the-lost-generation-7-18.html.
[xiv] Ülly Enn. Dec 2009. SALTO Working on Work. https://www.salto-youth.net/downloads/4-17-1948/WorkingOnWork.pdf
[xv] Maria Tadeo. 02.01.2014. Unemployed young people feel they have ‘nothing to live for’. http://www.independent.co.uk/student/news/unemployed-young-people-feel-they-have-nothing-to-live-for-9034146.html
[xvi] Abdel Aziz Aluwaisheg. 27.05.2012. The Jobless Generation: Regional crisis in youth employment. http://www.arabnews.com/jobless-generation-regional-crisis-youth-employment.