The Youth Unemployment Situation in the Czech Republic

The issue of youth employment and unemployment in the Czech Republic is a topic whose importance has increased particularly with crisis phenomena that began to be visible in late 2008 and especially during the years 2009-2010.  In this period significantly increased unemployment also increased youth unemployment.

For a basic illustration we can use this chart:

Source: the Czech Ministry of Labour and Social Affairs

The graph give information about the unemployment development over the last 5 years characterized by significant impacts of economic crisis phenomena in the Czech economy.

According to this data, unemployment started to accelerate at the beginning of the economic crisis (end of 2008) and this acceleration continued at great intensity essentially until the beginning of 2010. The highest unemployment levels so far were attained in February 2010 when 583 135 job applicants were registered at the employment offices and the unemployment rate was just under 10%. This means that over 17 months, the number of unemployed grew by 271 430. In other words, in the period that can be described as the apex of the crisis, unemployment increased by 87% compared to the initial numbers, i.e., it increased almost doubled. During that period, youth unemployment escalated up to 100000 persons.

These figures also show us that during 2011 the level of youth unemployment and unemployment of graduates went down a little. But nevertheless the number of unemployed young people still reached about 80000. If we use the ILO methodology, we can state that the rate of youth unemployment (15-24 years) in the Czech Republic is moving around the value of 20%.

Youth unemployment may become a particular problem (especially in the near future): the unemployment rate of this group continues to be higher than the average unemployment rate, even though the number of unemployed youths at the end of 2011, compared to the previous year, fell slightly in absolute numbers by 3000 persons. It must be stated, however, that this was affected by the process of abolishment of legal guarantees. Since 1 January 2009, the age threshold of people that were to be paid greater attention by the employment offices fell from 25 to 20, just before these kind of focal groups were completely abolished as of 1 January 2012. In addition to job applicants under 20, applicants above 50 lost this express protection.

Moreover it is today clear, that the Czech economy has not overcome the trajectory of very slow and even negative growth and we cannot expect any substantive improvement of the situation, especially if the Czech government implements austerity policies.

Unfortunately government policy, especially since the right-wing Czech government took power in 2006, prefers so called ‘liberal’ principles of ‘resolving’ the unemployment issue. This includes:

-       Emphasis on  flexibility of the labour market and conversely its ‘rigidity’ as the cause of high unemployment

-       Implementation of legislation preferring restrictions regarding rights of employees

-       Activating groups excluded from the labour market not through better work and wage conditions, but with an emphasis on the need to  increase individual responsibility

-       In connection with the above, advancement of the notion that the various kinds of social assistance and benefits are discouraging work and are being abused. This needs to be prevented by ‘greater focus of the benefit systems’

-       Claims are repeated that the labour force is too ‘expensive’ and that it is necessary to reduce personnel costs in response to allegedly high indirect labour costs

In contrast to this the Czech trade unions (the CMKOS) present another vision of the economic development and of solutions for labour market problems in particular:

-       strengthening of the active employment policy both from the point of view of its financing and also regarding its institutional setup

-       not seeing unemployed persons as people who do not want to work, but as  people who need sufficient support and have a legal claim for it

-       restoring special treatment oriented at needs of  vulnerable groups in the labour market, including of course younger people

-       stopping the ongoing devastation of public services including health care, education, mother and child care and so on

  This column is part of a project on youth unemployment in Europe run by the Friedrich-Ebert-Stiftung and Social Europe Journal.