In 2013, 74.5 million young people in the 15 to 24 age group were unemployed worldwide, which comes down to a 13.1 per cent youth unemployment rate – twice the global unemployment rate. The jobs crisis has hit young people in Europe especially hard. In Southern Europe, youth unemployment rates are reaching a sky high 50% in Spain and Greece. Between 2007 and 2012, employment in Greece, Ireland and Portugal declined as a whole by 1.6 million, but 75 per cent of this reduction, i.e. 1.2 million jobs, was concentrated among younger people (aged 15-34 years).
“Scarring” effect on young people
In addition to still very high total and youth unemployment rates in many countries, a particularly worrisome trend is the large employment gap for young adults, aged 25-34. In fact, employment losses have been more pronounced for this age group than for youth. Young adults are often the first to face job losses in times of crisis due to their lower seniority and the job protection afforded to older workers, while at the same time they are often excluded from specific youth labour market programmes or retraining schemes, making a return to employment for this age group particularly protracted. In Italy for example, over the period 2007–2012, young adults faced a sharper decline in their employment-to-population ratio than youth, whereas older workers (aged 55-64) actually benefited from an increase in employment.
This alarming and unprecedented situation can result in a long-lasting “scarring” effect on young people. And clearly, this concentration of job losses among younger workers bodes ill for a more rapid recovery if policy-makers are not taking decisive measures. It is time for action. Policy makers need to work together with social partners to address this situation through strategies focusing on growth and jobs and through policies and programmes that prioritize young people.
Five priorities to tackle youth unemployment
Young people face more difficulties in the labour market, especially those who are low-skilled, exposed to long-term unemployment or are stuck in the informal economy, where work is low paid and unprotected. In June 2012, representatives of governments, employers’ and workers’ organizations from all over the world met at the ILO and agreed on a call for action focussing on five areas: macro-economic policies, education and training for youth employability, labour market policies, youth entrepreneurship and rights at work.
Youth employment is bound to the overall employment situation. Therefore, macroeconomic responses must focus on growth and jobs at both national and European levels. Equipping young workers with work experience, including apprenticeships, is crucial to achieving impact and scale on youth employment, reducing the skills mismatch, easing transitions to work and making young people employable.
Education and training to make young people employable
One important step to be taken in order to bring down the high unemployment rate is to close the skills gap on youth labour markets. The skills mismatch has become a persistent and growing trend in Europe. Over-education and over‐skilling coexist with under-education and under‐skilling and increasingly with skills obsolescence brought about by long‐term unemployment. Evidence shows that there is a higher risk of mismatch for those at the bottom of the educational pyramid, which is reflected in relatively high unemployment rates for low‐skilled youth in comparison with high‐skilled youth.
Due to the growing phenomenon of over-education, youth are crowded out of the bottom of the educational pyramid, and less‐educated young people find themselves at the very back of the queue, even for those jobs for which they are best qualified.
Youth guarantees: a key instrument
The ILO strongly welcomes the decision of the European Commission to implement youth guarantee schemes in the regions most affected. This will help keep young people connected to the labour market. In addition, the instrument offers prospects for skills training and job-search support, equipping young people with work experience and helping them find a decent job that meets their skills and aspirations.
Countries like Denmark and Sweden have already been tackling youth unemployment successfully through similar systems of job guarantees. It is expected that by the end of 2014, all 28 EU countries will have introduced a national youth guarantee. According to ILO estimates, youth guarantees can be implemented at an annual cost of 0.5 to 1.5% of Gross Domestic Product, based on country conditions and the size of the eligible population. That is a modest investment for great benefits!
The current young generation is worse off than 20 years ago. It is urgent to address the youth employment crisis by focussing on employability. Europe cannot afford to go backwards. The ILO and the European Commission share this commitment and are cooperating actively on youth guarantee schemes and a range of other policy measures for youth employment.