Abstract
The youth unemployment crisis that has unravelled in Europe since 2008 has dramatically impacted the lives of young people. The transition from education to employment has become increasingly difficult. Not only is the rate of youth unemployment at record levels, but young people are more likely to be in poorly paid and precarious jobs. As a result, the number of young people at risk of poverty and social exclusion has been growing steadily throughout Europe. This article aims to contextualise youth unemployment in terms of the changes to the European economy and European social model over the past 20 years, and to propose areas that need to be addressed in order to reduce unemployment and positively impact the lives of young people in Europe.
Introduction
The economic crisis and the subsequent imposition of austerity measures has had a significant impact on European society. Every demographic has been affected, from children right up to the retired, with the general rule of thumb being that if you were in a vulnerable position before the crisis you are more likely to be in a desperate situation now. Among the broad spectrum of people that have borne the brunt of the crisis, young people stand out as a group that have been disproportionately affected. Young people are now dramatically more likely to be unemployed than the rest of the population, and even when they find work they often find themselves underpaid and exploited. The youth unemployment situation is not just about Europe meeting the expectations of its youth or helping a ‘lost generation’, it is about the very nature of our society, social justice, and the need to create an economic future for Europe that is based on equality and solidarity.
This article does not attempt to provide a blueprint for how to ‘bail out’ Europe's youth, nor does it provide à la carte solutions for the complex and intertwined issues surrounding youth unemployment. Instead, it seeks to contextualise the backdrop to the current youth unemployment crisis and to open up a debate on the measures that are required to ensure quality employment for young people in Europe.
A costly problem
The issue of youth unemployment is not a recent phenomenon. Before the economic crisis young people in Europe were more prone to unemployment, this largely being attributed to the increasingly difficult transition between education and the labour market. Despite this backdrop, the rapid increase in youth unemployment since 2008 has still taken most by surprise. The European Statistics Office (Eurostat) reported that in July 2013 over 5.5 million young people under the age of 25 were unemployed in the EU28. The youth unemployment rate is currently 24% in the EU, compared to 15% 5 years ago (Eurostat 2013a). The crisis has also exacerbated the existing socio-economic imbalances between young people in the north and south of Europe. In Germany and Austria the current rates of youth unemployment are 7.7 and 9.2% respectively, whereas in Greece and Spain they are 62.9% and 56.1%. Croatia, the EU's newest Member State, has the third highest rate of youth unemployment, with just over 55% of young people under the age of 25 unemployed.
It is clear that young people are being adversely affected by our current economic problems, but youth unemployment should not simply be considered a ‘youth issue’. Young people are often, slightly condescendingly, referred to as ‘the future’, but their unemployment is not an issue that should be relegated to the back burner, to be addressed somewhere down the line. Youth unemployment is currently having a huge impact on the European economy and European society. In economic terms, the European Foundation for the Improvement of Living and Working Conditions (Eurofound) has estimated that youth unemployment cost the EU €153 billion in 2011 in terms of lost tax contributions and social welfare payments, with an initial analysis indicating that this sum increased to €162 billion in 2012 (Eurofound 2012b).
The overall costs to society with regard to youth unemployment are more difficult to ascertain. However, there have been a number of indicators of a breakdown in intergenerational solidarity and in the overall social fabric in countries that are experiencing much higher rates of youth unemployment. In June the International Labour Organization (ILO) indicated in its World of Work Report 2013 that the risk of social unrest had increased in most countries since the economic and financial crisis that began in 2008, with the risk being highest in the EU, up from 34% in 2006-2007 to 46% in 2011-2012 (ILO 2013). The risk of social unrest was disproportionately higher in Southern European countries where youth unemployment is most severe.
A frequently overlooked statistic is that, according to Eurostat (2012), in 2011 almost 30% of young people in Europe were at risk of poverty or social exclusion, which is higher than the overall average of 24.2%. Poverty has been growing steadily in Europe since 2010 and despite the frivolous perception of youth poverty and discrimination against young people in some countries (European Commission 2012a), the reality is that the current economic crisis is pushing more young people towards poverty, homelessness and social exclusion.
A new era of openness and insecurity
The rising level of global economic integration, which has significantly accelerated over the past two decades, was initially embarked upon in order to accelerate economic growth, particularly in developed countries. The European Commission (2010) estimates that about one-fifth of the increase in EU15 living standards over the past 50 years is attributable to the integration of the world economy.
This more open and fluid economic system has had a significant impact on the European labour market. The OECD has asserted that the shift of jobs from declining sectors or occupations to expanding ones, in line with changes in comparative advantage, has resulted in many workers being displaced or affected by skills mismatches, and has resulted in a labour market that is generally less secure (OECD 2007).
Rising levels of inequality can be traced to increasing policies of privatisation in the late 1970s and throughout the 1980s (OECD 2011). Moves towards a neoliberal economic model were further accelerated by globalisation in the 1990s, and in the past two decades macro-level growth has disguised the conglomeration of wealth by the richest in society. The economic crisis of 2008 has further entrenched this process, as cuts to benefits and other social protection measures in recent years have left us in a situation where 120 million people were living at risk of poverty in the EU in 2011 and over 4 million people across the EU are homeless (Eurostat 2012). According to Eurostat (2013b) almost 1 in 10 working households in Europe now lives in poverty, known as in-work or working poverty. Low-skilled jobs continue to be outsourced, shifting labour demand away from less skilled work, rendering it less valuable and exacerbating inequality levels.
When it comes to the economic crisis, young people find themselves on the front line in the midst of austerity measures and labour market adjustments. The financial crisis and the collapse of industries throughout the EU tossed hundreds of thousands of young people out of their jobs and onto unemployment benefits. Economic recovery and moving Europe towards growth are of paramount importance to young people as they are suffering the most from the current scarcity of jobs. But little emphasis is being placed on the reason why young people find themselves in such a vulnerable situation in the first place: the gradual erosion of job security for young people in Europe.
The underemployment crisis
Young people across Europe are more likely than older workers to be employed in temporary and part-time jobs, and there is increasing evidence to suggest that temporary and part-time work is becoming an obligation, rather than an option, for young people. Figures from the ILO (2012) show that 42% of young EU workers are on temporary contracts, compared with just 13% among adult workers. In parallel, the number of permanent jobs held by young people fell by 2.5 million (-18%) between 2008 and 2012 (European Commission 2013). There is also a similar situation with regard to part-time work: between 2008 and 2011 the rate of part-time work among young people increased by 3.6% across the EU. This rise in non-permanent forms of employment since the onset of the crisis, combined with a dramatic rise in levels of youth unemployment, means that currently one in five young people in Europe fear losing their jobs (Eurofound 2012a).
In Europe, being engaged in temporary employment and part-time work without the possibility of making the transition to permanent, full-time employment is generally associated with precarious employment, as temporary workers tend to have less access to social protection than permanent full-time workers. The fact that young people are four times more likely to be on a temporary contract, and twice as likely to be hired through temporary agency contracts can be linked with research from Eurofound (2012a) that shows that younger workers end up in jobs that are physically more demanding and require fewer technological skills. Young workers are also much more likely to be in jobs in which they encounter high levels of strain or low levels of work demand, further entrenching their precarious working conditions.
Further to this issue of precarious work is the significant increase in the number of people considered ‘underemployed’ in Europe, particularly among young people. According to Eurostat, in 2011 almost nine million people in Europe fell into that category, primarily because they wished to work more hours or be on a full-time contract but there was no opportunity to make that transition. Eurostat (2013b) statistics show that in Spain over 80% of young workers on a temporary contract stated that the reason they were employed on a temporary basis was that they were not able to find permanent employment. In Greece 58% of part-time workers have declared themselves available to work longer hours. In Latvia, this percentage is 57%, in Spain 49% and in Cyprus 42%.
The rise of young people in non-permanent forms of employment indubitably reflects the difficulty of attaining secure employment in the current economic climate. Temporary employment is often linked with minimal job security, and limited or no access to social protection.
Investing in policies that work
Tackling the dual issues of unemployment and underemployment, as well as the flexibility requirements imposed on new labour market entrants in the globalised era, requires careful policy formulation and strategic investment in the areas that are most likely to improve the employment prospects of young people. They must focus on the various aspects of young people's working lives, from the transition from education to employment, to ensuring security, stability and a steady career progression.
Quality internships
A successful and smooth transition from education to the labour market is one of the key concerns in the context described so far. Internships can play a role in facilitating this transition, provided that the learning dimension of internships is ensured and that they do not replace paid work. The dual educational and workplace learning aspect of internships can effectively provide young people with the experience and skills they need to get a foothold in the labour market. However, the increasing exploitation of internships and work experience schemes by unscrupulous employers who wish to benefit from low-cost labour is undermining their credibility, and de facto creating a barrier to meaningful work for many young people.
The main aims of an internship must instead be to acquire practical experience and learn how to apply skills that have been previously acquired, either in formal or informal education schemes. They should aim to develop the intern professionally and also help them to gain knowledge of the sector in question.
Although Member States have the ultimate responsibility for ensuring quality work and internship opportunities, it has also been recognised that a European Framework on Internships and Apprenticeships could help to provide guidance to Member States and help to better coordinate European policies on the issue. Following the development of the European Charter on Quality Internships and Apprenticeships by the European Youth Forum in 2011, the European Parliament and European Commission have called for a need to establish a Quality Framework for Traineeships. However, the institutional agenda has been slowed down by difficult negotiations with the social partners, namely the representatives of employers’ associations at the European level. In the meantime, however, international corporations such as Microsoft Europe have recognised the importance of quality internships and apprenticeships and have signed up to the Youth Forum's Charter. The debate over internships and apprenticeships is ongoing, but while the lack of regulation in Europe continues young people remain vulnerable to exploitation and insecurity.
A youth guarantee
The ‘youth guarantee’ is a policy that has received significant attention at European level over the past 12 months. The concept of a youth guarantee, also known as a ‘job guarantee’ in some countries, is one where governments, regional authorities and public employment services commit to offering a young person a job, training or retraining within a certain period of being made unemployed or leaving formal education (European Commission 2012c).
The core principle behind the youth guarantee is ensuring equality of opportunity for young people on the labour market. Early labour market activation measures, such as the youth guarantee, are increasingly being called for in response to growing levels of youth unemployment, which pose a real threat to the European social model and the ability of Europe to recover from the recent financial crisis.
Some countries in Europe, such as Finland, Austria and Denmark, have had youth guarantees or another form of early labour market activation in place for young people since the 1990s (Eurofound 2012c). These policies have had varying levels of success and provide useful information on what works and what does not work when it comes to the youth guarantee.
The institutional debate over labour market activation measures, such as the youth guarantee, is quite intense at the moment, with the policy gaining prominence following the adoption of a Council Recommendation in February. Member States with regions with a youth unemployment rate of over 25% are now compelled to submit implementation plans for the youth guarantee by the end of the year (European Council 2013). However, national budgets are under pressure and the prospect of the large-scale investment required throughout Europe seems unlikely. The €6 billion currently earmarked for the youth guarantee under the Youth Employment Initiative for the 2014-15 period is insufficient; in order to tackle youth unemployment we need a significant investment in early activation measures for unemployed young Europeans.
Sustainable contracts
The right to decent work is enshrined in multiple legal frameworks on both the global and the European levels. The Charter of Fundamental Rights of the EU stipulates that every worker has the right to working conditions which respect his or her safety and dignity; the United Nations Universal Declaration of Human Rights states that everyone who works has the right to just and favourable remuneration, to favourable conditions of work and to protection against unemployment; while the International Covenant on Economic and Social and Cultural Rights further stipulates that everyone has the right to equal pay for equal work. The legal protection enshrined in these documents provides an important legal pretext for the working and social rights of young people.
The lack of job security, and the abundance of short-term contracts among young people, is at the heart of the current youth unemployment crisis. New solutions must be found to this issue, and various ideas need to be explored. For example, the single open-ended contract, where multiple short-term contracts are replaced with an open-ended contract, which allows more employment protection for workers but still allows enough flexibility for employers to hire and fire according to labour demand, has been proposed by both the European Commission (2012b) and by leading economists such as Tito Boeri (2009). Policies like these have the potential to improve the working conditions and employment prospects of young people and should be pursued. It must be ensured, however, that they do not represent a simple relabelling of current practices, or are implemented in a way that makes the careers of young people more fragmented.
Youth entrepreneurs taking the lead for quality jobs
One other way in which Europe can positively help young people is by encouraging and investing in youth entrepreneurship. Entrepreneurship is a niche form of employment, but it can also be a remarkable way of fostering innovation across the business spectrum and reinforcing social and environmental values. However, young people often find themselves disadvantaged, especially when attempting to embark on entrepreneurial endeavours.
The lack of access to credit and resources, as well as a disappointing lack of support from educational and governmental structures, means that young people often find that entrepreneurship is difficult, or even impossible, to break into. Entrepreneurship education is also important. The promotion of the values of entrepreneurship has to start at an early age, and should be followed later by more targeted entrepreneurial learning at school and in informal education activities.
Conclusion
Europe stands at an important crossroads with regards to youth employment. There is an urgent and immediate need to create jobs for young people in order to prevent the onset of long-term unemployment. There is also a broad consensus on the need to create more quality employment in order to improve the social situation of young people in Europe (ETUC et al. 2013). A key challenge is to bridge the gap between education and the labour market. Although it can be argued that a degree of flexibility is required and that well-regulated temporary and part-time jobs, as well as internships and apprenticeships, have a constructive role in the labour market, ensuring quality, stable jobs for young people to transition to is the most important factor.
However, the fact that young people overwhelmingly bear the flexibility requirements of the labour market, and enjoy less security than older workers, is a key reason why there has been such an explosion in the youth unemployment rate since the onset of the crisis. Retraining young people in order to put them in equally precarious jobs in newly developing sectors is not a viable long-term solution to youth unemployment. Young people have an equal right to quality work, autonomy, stability, and the reconciliation between family and private life. This must be recognised, both in political practices and national and international labour law. Social partners also have an important role to play in this process, particularly youth organisations which provide many of the skills required for today's job market and help to develop young people to be autonomous, engaged and proactive citizens.
Unfortunately the working rights of young people are not always taken as seriously as those of other demographics (European Commission 2012a). It is this perception, that the working rights of young people are somehow less important, that has led to an increased number of young people languishing in unpaid and poor-quality internships. The internship merry-go-round that exists when trying to break into certain sectors is not acceptable for young people, just as it is not acceptable for the older population.
Recent initiatives at the EU level to tackle youth unemployment and social exclusion have been welcome, but much more needs to be done in terms of economic investment in young people and the protection of young people's labour and social rights. The current intergenerational dynamics are outsourcing one generation's problems to the next and this can be clearly seen when it comes to youth unemployment and poverty. Member States have the ultimate responsibility to ensure that policies are put in place that promote quality employment, tackle precarious conditions and ensure social inclusion. This should be done in close cooperation with the EU, which has a defined role in ensuring full employment and social progress under the Treaty on European Union.
Addressing the imbalances that have developed in the labour market with regard to young people over the last few years will not be easy. It will require coordinated efforts between regional-, national- and European-level decisionmakers, including trade unions and business associations. It will also require cooperation with youth organisations. However, recent statistics showing a rise in the risk of social unrest in Europe, as well as a rise in intergenerational tension in some regions, have demonstrated that the creation of quality jobs must not succumb to the objective of creating any job. Young people must be provided with the opportunity to make a decent life for themselves and their families. They expect no less, and they deserve no less.
Footnotes