Europe's Unemployed Young

An essay for the 2014 St. Gallen Symposium Essay Competition

There is a very specific context that fuels the disillusion and disappointment that young, unemployed Europeans feel. With youth unemployment (the number of unemployed between fifteen and twenty four years of age) affecting seventy five million people across the globe, theirs is only one kind of narrative amongst many coming out of what has been labeled ‘the next global crisis’[1]. Yet it is an especially bleak narrative. To put things in perspective, the European Union has the second highest youth unemployment rate in the world – a staggering 23.8% [2] as of December 2013 – second only to the Middle East and North Africa region, in which one in four young people are without a job [3]. At the same time, the story of youth unemployment in the European Union is made even more distinct by the extent of the discrepancy between a highly educated yet unemployed youth in the region, particularly as manifested in the 16% of young people not in employment, education or training[4]. Combined with the drawn-out economic crisis and the unique nature of the political and monetary union linking the twenty-eight member states together, this makes the EU vulnerable to social discontent and instability, something that, if left unresolved, could threaten the very existence of the union itself. This essay will draw special attention to concurrent challenges that bear on the potential success of solutions to youth unemployment, such as the aging population of the region and the existing large gap between the Northern European and Southern European states, which continues to foster discontent. Drawing from the failure of the region’s existing policies to lower youth unemployment in the last five years[5], this essay will attempt to suggest bold solutions in an effort to match the unprecedented scale of the youth unemployment problem as experienced in the EU today.

The more pronounced elements of the social and psychological effects of youth unemployment in the EU can be illustrated using the case of Cyprus, which has devolved into one of Europe’s most rapidly deteriorating examples of unemployment, with general unemployment rate increasing from 13.9 % to 17.5 % in just a year [6]. The 1974 Turkish invasion and the resulting financial, political and social crisis it brought to the island had frighteningly similar effects to the situation that many EU countries are experiencing today: loss of livelihood, loss of property; parents forced to compromise the extent of their children’s education due to financial setbacks; social unrest; mass immigration. Yet the generation that came out of this war – the equivalent of the baby boomers and generation X-ers in Europe and the US - was largely a success story. It created wealth, and wealth brought with it expectations of a certain lifestyle, with the impression that this lifestyle naturally followed the attainment of every higher education degree. It also created a bubble that burst, leaving behind a 27.8% youth unemployment [7] rate as collateral damage, arising both from the March 2013 bail-in agreement and subsequent austerity measures. Cyprus is just a small, one million-person example of the kind of experience that fuels a large portion of the European youth’s discontent, particularly in the South East region of the Union, who feel that they have been cheated of a better future by their parents’ generation. Cyprus’ case study also illustrates a pattern of growing antipathy and anger festering among youth of the European south towards the countries in the North West part of the region. Any viable policy framework for youth unemployment has to also aim at tackling these sentiments. What is at stake is the social cohesion of the Union both in terms of the way new leaders perceive cross-national cooperation and the willingness of younger generations to finance the growing aging population in the decades to come. 

The latter issue is not negligible and neither is it independent of the former. According to Eurostat, older persons will likely account for an increasing share of the total population in the region – those aged 65 years or over will account for 29.5 % of the EU-27’s population by 2060, compared to 17.5 % in 2011 [8]. If anything, this will worsen the prospects for youth employment. As it is, young people are the first ones to be laid off by ailing employers, since regulatory frameworks mean it is more costly for companies to let older employees go. How do we reconcile the two without falling into the trap of ageism? We need to make sure that mitigating pension outlay in light of increased life expectancy does not come at the cost of youth employment. A way could be to set up a scheme of ‘gradual retirement’, whereby people within five to seven years of the set retirement age may opt to work part time – a maximum of twenty hours a week – in order to facilitate the intake of younger employees in full-time positions. Such a scheme would have to be regulated according to the fiscal situation of each member state. This could also act as a counterbalance to the raising of the retirement age that has been demonstrated against in many EU countries.

Comparing youth unemployment statistics from Northern European Eurozone countries to Southern European Eurozone members, it is not difficult to see why there is a growing rift in the popular sentiment coming out of these two geographical areas. While youth unemployment rates in Germany, the Netherlands and Austria are 8.1%, 9.5% and 8.7% respectively, Greece suffers with a rate of 55.3%, Spain with 53.2% and Italy with 35.3% [9]. In order to ensure social stability within the Union, suggestions for solutions to youth unemployment should help allay these antagonistic sentiments, not fuel them further. The way to do this is to ensure that the gap between North and South does not keep getting wider. For this reason, while the migration of youth from south to north is expectable, it is, nonetheless, a non-viable long-term solution. On a personal level such moves are a last resort for many young people, not really a matter of choice but a matter of survival. Yet the impact of this migration wave – in the form of ‘brain drains’ in countries most affected by the crisis but also in a lop-sided growth pattern within the EU – cannot be underestimated. To continue to rely so heavily on the giving of Northern European states, even in the form of one-sided youth employment opportunities, will only make the existing gap – the gaping 47.2% difference between youth unemployment in Germany and Greece, for example – even larger.  

How do we smoothen out these incongruities? If the markets in the ailing economies of the South aren’t big enough to absorb most young people into the workforce, is there a way to collaborate with EU partners while ensuring that the resulting profit doesn’t contribute to widening the gap between member states? Digital marketplaces can offer such an alternative. Digital marketplaces would enable unemployed youth to utilize their competencies and understanding in technology and software, even in more basic tools such as social media, in order to engage in employment that does not require physical presence in a different country, while having access to that country’s market. One area that could be particularly appropriate for such an endeavor is the European Union’s initiative of eGovernment. The push for digitization of public services, both on a Member State but also on a European Union level, could mean that certain projects within the eGovernment initiative could begin accepting ‘micro tenders’ from young people from different parts of the EU. Instead of hiring external consultancies and contractors, governments could employ groups of young people under the supervision of an experienced project manager. Employing a model of collaborative production and crowdsourcing among the younger demographic will have positive value for both individual member states as well as the EU as a whole. With youth engaged in the digitization initiative, interfaces are guaranteed to keep up with user demands and most importantly, an environment of collaboration will be set up across the continent. Funding for such a project could come jointly from the eGovernment budget and the ‘Youth Guarantee’ fund proposed by EU leaders last February. Within the latter’s objective of providing youth with either a job, a traineeship, an apprenticeship or further education at least four months after leaving school, some member states could also reserve part of this budget for training young people in the areas of online and digital services, including cloud services and security, creating apprenticeships in partnership with the private companies currently employed to undertake such tasks.

This could also pave the way for an online ‘Education for Employment’ portal, where private industry stakeholders, public service departments and universities can work together to produce online courses, in the form of training videos and other interactive learning tools, based on the kinds of skills that employers in the EU claim university graduates are lacking. According to a McKinsey Center for Government Report, many of these include softer skills such as problem solving and analysis and spoken communication [10]. Developing these skills is not fully contingent on having full-time teachers that are academically trained experts in particular subjects. Even if more technological subjects are included – such as coding languages courses – their content can be crowd sourced by appropriately skilled yet unemployed European youths. Furthermore, content could also be produced by the private stakeholders involved, as part of their Corporate Social Responsibility programs. Incentives to participating companies could even include categorizing monetary donations aimed at building or bettering the portal system as charitable donations, offering partial tax breaks. Coupled with a dual membership system, this project could become a sustainable, cost-efficient solution independent of any major budgetary contribution from Member States. On the one hand, universities interested could pay a yearly subscription in order to have access to exclusive, more specialized company-created content for their students, combined with other advantages such a special job application tools or ‘tracks’ for job openings at collaborating companies. Such a public-private partnership would also encourage better communication between universities and industry in the EU, which according to McKinsey’s report is one of the main reasons of skills mismatch between university graduates and job openings. A centralized location for employers and universities to collaborate in this way will be in the students’ best interest but will also help companies locate suitably skilled new hires. On the other hand, subscription funds can in turn be used to subsidize a second membership option for the portal, a hub of free, but regulated for quality, content that would be made available for all unemployed Europeans under the age of thirty. This well help break the barrier of limited access to tertiary or further education of a certain youth demographic due to costs. Here also specific career opportunities for both secondary and higher education graduates may be posted. The existence of a pan-European employment resource can make the free movement of citizens within the union more efficient and less frustrating for unemployed youth. 

The issue of youth unemployment in the European Union is not merely an economical one. Its social repercussions, if not targeted effectively, may have dismal consequences on European institutions, particularly if divisive sentiments across geographical areas and age groups persist. With today’s young people being tomorrow’s voters and leaders, policy makers and private stakeholders need to work together now in order to recover the younger demographics’ trust in the advantages of a united continent. Utilizing young people’s technological competencies in order to get them employed and simultaneously engaged in the development of the European project is an important first step towards the right direction.

February 2014 

References

- Berman, Jillian, ‘Youth Unemployment Is The Next Global Crisis’. Huffington Post, September 27th 2013
- European Commission, ‘Europe 2020: Youth Unemployment’. Retrieved 25th January 2014 from http://ec.europa.eu/europe2020/ - Eurostat, ‘Population Structure and Ageing, October 2012’. Retrieved 28th January 2014 from http://epp.eurostat.ec.europa.eu
- Eurostat, ‘Unemployment Statistics’, December 2013. Retrieved January 27th 2014 from http://epp.eurostat.ec.europa.eu
- Eurostat, ‘Youth Unemployment’. Retrieved January 20th 2014 at http://epp.eurostat.ec.europa.eu
- International Labor Organization, ‘Global Employment Trends for Youth 2010’, Geneva, August 2010
- ---, ‘Global Employment Trends for Youth 2012’, Geneva, May 2012
- McKinsey Center for Government, ‘Education to Employment: Getting Europe’s Youth Back Into Work’, January 2014

Footnotes

[1] Jillian Berman, ‘Youth Unemployment Is The Next Global Crisis’, Huffington Post, September 27th 2013.

[2] Eurostat. Youth Unemployment in the European Union. December 2013. Accessed on January 20th 2014. http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Youth_unemployment

[3] International Labor Organization, ‘Global Employment Trends for Youth 2010’, Geneva, August 2010.

[4] Eurostat, ‘Young People – education and employment patterns’, October 2011.

[5] International Labor Organization, ‘Global Employment Trends for Youth’, Geneva, May 2012, p. 13

[6] Eurostat, ‘Unemployment Statistics’, December 2013. Accessed January 27th 2014: http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Unemployment_statistics

[7] ibid.

[8] Eurostat, ‘Population Structure and Ageing’, October 2012. Accessed 28th January 2014: http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Population_structure_and_ageing

[9] European Commission, ‘Europe 2020: Youth Unemployment’. Accessed 25th January 2014: http://ec.europa.eu/europe2020/pdf/themes/21_youth_unemployment.pdf

[10] McKinsey Center for Government, ‘Education to Employment: Getting Europe’s Youth Back Into Work’, January 2014, p. 49