Tackling Europe’s Youth Unemployment Scandal

Since the start of the Great Recession of 2007, youth unemployment has been on the rise across the globe, a new report by the International Labor Office (ILO) has found out, and austerity policies are making the situation worse. The FT reports:

Dr Ekkehard Ernst, head of the ILO’s Employment Trends Unit, said countries with the most acute problems such as Spain and Greece must try to stimulate their economies rather than reduce government spending.

“What is quite obvious with youth unemployment rates of over 50 per cent in these countries is the first thing that needs to be done is get jobs back … and that can only be done if you stimulate the economy, for instance through infrastructure programmes, which are very job rich,” he said.

Fiscal retrenchment in these countries is exacerbating youth unemployment, he argued. “We have always been of the opinion that these really strict austerity programmes … are making the problem worse.”

Developed countries and the European Union have experienced the steepest rise in youth unemployment – which the ILO defines as ages 15 to 24 – since the financial crisis. Youth unemployment in this country grouping will reach 18 per cent this year and ease to 16 per cent by 2016, the ILO forecast, still much higher than the 2007’s rate of 12.5 per cent.

If you want to hear about the problem from the ILO itself just watch the video below:

In the European Union in particular, recent developments in youth unemployment have been dramatic as Eurostat data shows:

Youth unemployment rates in the EU 27 and the Eurozone

The recent developments are indeed a disaster and you might also call the situation a political scandal. How is it possible that more than one in five young people in Europe have no job and so many more are working in precarious circumstances? How is it possible that the policy direction sold as the way out of the Eurozone crisis (the disastrous austerity policies) have the effect of causing more than 50% youth unemployment in Greece and Spain? Against this backdrop is it really a surprise that radical fringe parties on the right and the left are gaining ground across Europe?

It is high time to get a grip on the issue. For this reason the Friedrich-Ebert-Stiftung and Social Europe Journal are running a series of articles, interviews and commentaries in the coming months which will look at the issue in general as well as into specific situations in EU member states. We aim to present detailed analyses of national circumstances as well as general trends. On this basis, we hope to develop more targeted ideas to address this urgent problem.

We cannot afford a lost generation in Europe. We must tackle and solve the problem now!

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  • http://www.Steven-Hill.com Steven Hill

    Henning the methodology used for determining youth unemployment is important. Many countries do not count someone who is in school as part of the labor force, which reduces the denominator and so makes the numerator (number of unemployed) look artificially higher. A few years ago (pre-econ crisis) you might recall that it was reported that France had a very high youth unemployment rate, but what a FT analyst discovered was that France had a lot more youth in college that made their unemployment rate seem much higher. Of course, some youth might be going to college because there are not many jobs, but just looking at the numbers you can’t really figure out if that is the case.

    The best way to measure youth unemployment is to compare the unemployed to the number of total youth overall, not number who are in the labor force. When they did that with France in the example cited above, they found that France’s youth unemployment rate was similar to the US, UK, etc.I have tried to find out how youth unemployment is being measured in Spain, Greece and places that are reporting extraordinarily high rates, but have not been successful. Do you know how it is being measured?

    Until we know that, I remain skeptical about these numbers. Certainly youth unemployment is high, but it may not be as high and as alarming as some of the reports are indicating.

    Steve

    • Marc Debusschere

      Your answer is actually in the article the image file was taken from: http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Unemployment_statistics , see ‘Youth employment trends':
      “Youth unemployment rates are generally much higher than unemployment rates for all ages. High youth unemployment rates do reflect the difficulties faced by young people in finding jobs. However, this does not necessarily mean that the group of unemployed persons aged between 15 and 24 is large because many young people are studying full-time and are therefore neither working nor looking for a job (so they are not part of the labour force which is used as the denominator for calculating the unemployment rate). For this reason, youth unemployment ratios are calculated as well, according to a somewhat different concept: the unemployment ratio calculates the share of unemployed for the whole population. Table 1 shows that youth unemployment ratios in the EU are much lower than youth unemployment rates; they have however also risen since 2008 due to the effects of the recent crisis on the labour market.”

      .

  • http://www.Steven-Hill.com Steven Hill

    Marc, thanks for finding that important information. The chart at http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Youth_unemployment,_2011Q4_(%25).png&filetimestamp=20120502094632 shows the huge difference: youth unemployment RATE in Spain is 48.9%; its youth unemployment RATIO however is 19%; youth unemployment rate in Greece is 49.3%; its youth unemployment RATIO is 13%. For the eurozone the rate is 20.8% and the ratio is 8.7%, for EU-27 its 22.1% rate and 9.1% ratio. These are HUGE differences, reflecting different methodologies. I would submit that not considering the number of young people in school makes little sense, yet that’s what the traditional methodology does because that’s what is done for non-youth demographics and so that methodology is unthinkingly extended by many officials to youth. But it’s really comparing apples and oranges since so many youth are in school and and therefore are not considered part of the labor force. Yet this factor is not being reported accurately, or at least the methodology made clear. Then the figures based on flawed methodology are picked up by the media and echoed incessantly, especially by those who for whatever reason want to paint Europe in the darkest light possible, and before you know the flawed numbers based on flawed methodology are presented as fact, i.e. “50% of youth unemployed”

    Sure, some of these young people are in school because they can’t find work. But it’s also clear that the youth unemployment situation is not as dire as the headlines are making it out to be.

    So Henning, while the youth unemployment rate is certainly something to be concerned about –as are the other challenges of the eurozone — I hope you will consider this information when you write about the situation of youth. When you write (as you did above) ” How is it possible that more than one in five young people in Europe have no job?” the answer is that half of them are in school! Which is not a bad place to be. More education is rarely a “scandal!”

    Best,
    Steven