Young, Educated but Unemployed

Europe’s youth faces the ongoing consequences of the financial crisis with unemployment rates continuing to skyrocket. Can the European Youth Guarantee help? Two young Europeans from Spain and Slovenia share their views, fears and expectations.

Alex Viladegut, in his early twenties, comes from Spain and is about to finish his Bachelor degree in industrial engineering. Mirnes Jusufović, also in his early twenties, comes from Slovenia and will finish his Bachelor degree in media and communication by the end of 2014. It may seem like these two men have little in common, but there is one thing they share: both worry about what awaits them after finishing their studies. “Chances to get a good job in Slovenia approach zero – either you have certain connections or you’re just lucky enough,” says Mr. Jusufović. The same seems to apply for the labour market in Spain. “The situation in Spain is quite difficult. The most likely way to get a job is through internships although it is hard to get accepted in the first place. On top of that, the wage for first employments is really low.”, says Mr. Viladegut.

Europe’s Youth on the Edge

Six years have passed since the economic downturn of 2008, with it the labour market floundered. Today millions of young Europeans find themselves in a similar situation. Often a university degree and other technical qualifications have proved to not be enough to spare young people from unemployment. The dimension of the problem can be illustrated clearly by statistics: In the course of the past few years youth unemployment for those 24 and younger has increased continuously in the European Union and reached an average of 23,5 % in 2013.1 In December 2013 the youth unemployment rate in Spain had climbed to the staggering level of 53,4 % second to only Greece where nearly 60 % of young people were unemployed.2 Even when young people do find work, their jobs tend to be less stable. Suffering from lower wage-levels and weaker long-term employments, as over 40 % have to be satisfied with temporary contracts lasting no longer than one year, which is four times higher than the adult’s rate.3 Looking at these figures it is not without reason that the younger generation is being considered the “lost generation” creating a considerable economic loss of around €150 billion for the EU as estimated by Eurofound. This generation faces the risk of lowered employment opportunities yet also in loosing faith in the E.U.

The current situation on labour markets forces young people to make adjustments. Mr. Viladegut for example is learning German and considering the possibility to migrate: “In the long term I’d like to find a good job in my home country and although I don’t feel like working abroad for an undefined time, I am open to moving to another country in order to gain work experience.”

European Youth Guarantee

German Chancellor Angela Merkel just recently declared youth unemployment to be “perhaps the most pressing problem facing Europe at the present time” and while young people are looking for answers, national and European Union leaders desperately try to find a successful way to tackle youth unemployment. EU countries may now have found an approach by launching a campaign for a concept called “Youth Guarantee”. A Council recommendation setting out the measures and reforms necessary to ensure a smooth implementation of the program has already been adopted as of April 2013 and currently 17 Member States have already submitted their final plans for implementing the Youth Guarantee. According to the model of countries such as Finland, Sweden and Austria, the Youth Guarantee should ensure that those aged 18 to 24 get a good-quality offer within three months after leaving education or becoming unemployed, the offer being geared to a job, apprenticeship, traineeship or further education. By granting young people the right to work, the Youth Guarantee recalls social-democratic principles and toys with the idea of full employment. It therefore aims to reduce the time young people spend in the NEET group, namely the group of people “not in employment, education or training”.

But can such a program be considered a realistic option for creating job opportunities? Mr. Viladegut is sceptical: “It sounds great but to be honest, I don’t believe that the Youth Guarantee could work in Spain. Even the most qualified people are having a hard time to find work at the moment”. In his opinion the EU should focus on creating incentives for the companies to hire more young people. Labour market policymakers and the respective Member States have, on the other hand, ample reasons to believe that such a program could be the long sought solution to a problem which existed long before the 2008 recession. The Youth Guarantees implemented in Finland and Sweden have proven to be a success until so far. In Finland 83,5% of young people searching for work successfully received an offer within three months after registering as unemployed and in Sweden the number of young people taking part in the Youth Guarantee program has continuously increased over the course of the last few years.

Don’t Excpect Too Much

The expected strengths and advantages of the Youth Guarantee are clearly visible: Besides improving the quality of services provided to young people, youth guarantees address the problem of unemployment with immediate effect and thus counteract the long-term consequences such as resignation, disaffection and the feeling of helplessness. At the same time it represents a key step towards restoring the trust in the work of public authorities and
even if the total estimated cost of establishing the youth guarantee schemes is around €21bn a year, inaction would be much more costly.

There is, however, a risk that expectations are being raised unrealistically high to the point where they cannot be fulfilled anymore. As there is no unified model throughout the EU, the implementation of guarantees will depend on the realization of the different Member States. For many of them an implementation will require structural reforms and a reorganization of public employment services (PES) so that the needs of unemployed as well as businesses can be better addressed. Moreover, those countries which are most in need of intervention will have to invest comparatively more than other Member States. Therefore, the success is highly dependent on other public policies like the availability of student places and the capacity of PES as well as the funding volume and its distribution within the EU, which is why the European Youth Guarantee should take into account the different conditions of each Member State.

Nevertheless, the European Youth Guarantee marks the beginning of a potentially successful way to tackle youth unemployment in Europe. Mr. Jusufović is hopeful: “I think the Youth Guarantee is a great idea which hopefully will help a lot of young people. I would definitely participate in it!”

Patricia Jaworek

Patricia is a law-student at the University of Hamburg