Unemployment is not the only urgent Youth Issue

Sonja Bekker

The Social Europe Journal website has paid a great deal of attention to youth unemployment – and rightfully so. However, becoming fully aware of the depth and persistence of the labour market problems of younger generations requires a broader perspective in three ways. Firstly, researchers need to look beyond unemployment and include other labour market indicators to assess the state of young people, such as various types of inactivity, in-work-poverty and precariousness of jobs. Secondly, the term ‘youth’ should be defined more broadly, not only encompassing those who have recently left school (age 15-24), but also including young people in the age of family formation (around age 25-35). Thirdly, analyses should combine labour market statistics with analyses of social policies to respond to the challenges of young people. A broader approach to youth issues offers more ground to judge the extent to which younger generations face systematic labour market risks without accurate state support.

Looking beyond unemployment

Heejung Chung

The youth unemployment rate is indeed a valuable indicator to assess some of the problems young people encounter in the labour market. Although one could argue that using the youth unemployment rate overstates to some extent the problems of joblessness, the steep and upwards trend after the crisis does signal a severe deterioration of the labour market position of young people. Moreover, the alarming unemployment rates have been very helpful in creating a political agenda for youth issues. In the Netherlands for instance only this month a careful debate has started on youth unemployment, facilitated by the frightening example of Spain.

However, as we have demonstrated in a recent article, the problems of young people neither solely concern unemployment, nor stop at the moment they get a job. Only by using a broader approach, including indicators such as NEET (not in employment and not in education), (in-work) poverty, precarious employment contracts and feelings about income and employment insecurity, can we begin to grasp the severity of the problems younger generations face today. To name one, for those aged between 15 and 24 NEET was more than 20% in the EU27 in 2010; a stark increase compared to before the crisis. In the same age group, 42% hold a temporary employment contract and one fifth of those working are at risk of poverty. A whopping one third of all individuals between the ages of 15 and 24 are at risk of poverty in the EU. Thus, we find that young people feel more insecure about their employment and income than any other age groups. Also in view of the long-term scarring effects of unemployment and the possible negative consequences of having consecutive fixed-term employment contracts it is more than valid to place youth issues high on the policy agenda.

Looking beyond school leavers

Taking one’s first steps in the labour market, one could argue, has always been a somewhat risky event. It takes some time to find a job, to gain relevant job experience and to grow into a more secure position. Viewing also the contribution of Bauman on the emergence of the precarious ‘Generation Y’, one could however wonder whether holding a precarious job is an age or rather a cohort issue. In other words, there is evidence to suggest that the challenges young people face are structural rather than temporal. Therefore our article looks beyond the age group that has just left school, and also includes those that are in the age of family formation, roughly those between 25 and 35. We find that this age group is more likely to be unemployed than older generations and that their rise in unemployment rates is more pronounced than in older age groups. Moreover, of the 25-35 year olds 17.4% hold a temporary employment contract, which results in lack of stability. In Spain, where fixed-term work is widely spread, even more than 30 percent of this age group is in temporary employment. This could have larger implications, given that at this age most desire some sort of financial stability in order to buy a house and start a family

Taking trends and policies into account

Looking at the plurality of labour market challenges that young people face, one could expect that national policies address the long-term problems of young people and that the crisis acted as a facilitator in this respect. However, comparing the crisis measures of Spain, Sweden and the Netherlands, we conclude that such initiatives were not always forthcoming. Rather, what the three countries have in common is an emphasis on schooling and training measures: seeing to it that early school-leavers return to education or to engage in more work experience through routes such as internships. These supply side approaches are scarcely complemented with demand side measures. In addition, most policies are only available to the age group of between 15-25. In the Netherlands there are virtually no initiatives to help young workers with finding and keeping jobs, other than reducing early school-leaving. Sweden offers tax and social security reductions for employers to encourage demand for young workers. Spain is the most active country in our analysis in its attempts to reduce labour market segmentation and moreover somewhat relax the age limit for being eligible to state support. However, given the severity of Spain’s labour market problems, such measures have not yet been successful. In all three countries young people moreover get less support from the social security system than other age groups. Young people are often not entitled to unemployment benefits due to their lack of work history. Only Sweden has taken some measures to make its systems more accessible to youths. But young people also do not always have access to general welfare schemes. As of 2012, the Netherlands bans young people until the age of 27 from welfare in the first month after their first application. Instead, they are sent home and asked to return after four weeks for a second request. Discussions on the Swedish experience conversely suggest that quick intervention is key to give young people the best support to make a successful entry at the labour market. Alienating them from support may very well be counter-productive.

Overall, it seems that younger generations indeed face systematic labour market risks, more than previous generations, yet adequate state support is largely lacking. Hopefully societies do not realise too late that in order to maintain a well-functioning economy and society, younger generations need a firm footing in the job market with ample stability.

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