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Oliver Marc Hartwich

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Young and restless: Europe's lost generation

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Published in Business Spectator (Melbourne), 4 July 2013

http://www.businessspectator.com.au/article/2013/7/4/globalnews/young-and-restless-europes-lost-generation

Of all the aspects of the euro crisis, the most worrying one is the effect it has had on the younger generation. Across Europe, youth unemployment has reached such proportions there is talk about a lost generation. But not all hope is lost, thanks to the European Union. At their summit last week, Europes political leaders agreed to spend 6 billion in the fight against youth joblessness. To top it off, there will even be a so-called youth guarantee. Within four months of becoming unemployed or leaving formal education, every young European will in future be offered a job, an apprenticeship, a traineeship, or continued education. Problem solved! Without wishing to spoil the party, fixing Europes most pressing social problem will take a little more than warm words and a few billion euros. Even by EU standards, to believe that 6 billion and some solemn pledges will do anything to create a few million jobs is breathtakingly optimistic. In all likelihood, Europes youth unemployment problem will persist for as long as Europes general economic problems remain unsolved. The first problem with the EUs plans is their disproportionate measure. Across the continent, some 5.6 million under 25 year-olds are out of work. The true figure is likely to be somewhat higher because to be counted in the statistic, people need to have been out of work for at least four weeks and ready to start new employment within a fortnight. For those who have already given up looking for jobs, there is no place in official statistics. The statistics do not count young people in poorly paid and unstable jobs either. On the other hand, it is probably also necessary to put the horror figures about extreme youth unemployment rates of 50 per cent or more around the Mediterranean into perspective. Such figures exaggerate the problem because they suggest that half a generation is without a job. In fact, a large part of young Europeans are still in education and thus not actively looking for employment. Europes statistics agency, Eurostat, is trying to make the difference clearer by publishing both a youth unemployment rate (unemployed young jobseekers) and a youth unemployment ratio (percentage of unemployed people in that age group). While the former stands at above 23 per cent for the EU, the latter is just under 10 per cent. Thats still high but not quite as catastrophic. For Greece, for example, this means that true unemployment for under 25 year-olds is 16 per cent, not 58 per cent as is widely reported. The difference consists of young Greeks going to school, doing apprenticeships or studying at university. Nevertheless, youth unemployment is a serious concern but the EUs recent announcements do not seriously address the problem. Based on the official, absolute figure of 5.6 million young Europeans without a job, the new EU package leaves little more than 1000 for each one of them. Though this may be enough to put candidates through seminars teaching them how to write successful job applications, it is unlikely to do much more than that. It is certainly not enough to provide meaningful qualifications. Qualifications are desperately needed. Across the EU, 15 per cent of all 18-24 year-olds lack secondary school qualifications. Unsurprisingly, it is these people who are affected most by unemployment but there are no quick fixes to make them employable if they are without the most basic education. As would be expected, the qualification problem is geographically concentrated in Southern Europe. While 79 per cent of young Europeans hold a secondary school certificate, only 61 per cent of young Spaniards and 59 per cent of young Portuguese have such qualifications. In times of crisis, and in tight labour markets, their employability is limited. So the 6 billion now promised by the EU to help the young unemployed will not make much of a difference. And the EUs touted youth guarantee is not going to do much either. Not only because it is not a guarantee in a legal sense there is no recourse if young workers still find themselves unemployed. But also because it might just lead to young workers being parked in make-work schemes or training programs with the sole purpose of removing them from the statistics. The fundamental, underlying problem for youth unemployment in Europe is something completely different. The real

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05.07.2013 07:55