Creating Opportunities for Young Europeans: It’s the Future, Stupid!

1989 – No (UHT-)milk today!

I have never experienced an economic boom. Growing up in East Germany in the 1980s, Real Socialism was part of our daily lives. While the media preached about socialist emulation and rejoiced that we had, yet again, managed to fulfil the Five-Year-Plan ahead of time, shop assistants were silently dusting empty shelves and housewives turned into modern hunter-gatherers. Of course, I didn’t know about socialist emulation back then. I simply noticed that grocery shopping was quite a time-consuming chore and that products like ketchup, long-life milk and bananas seemed to be extremely scarce.

I read my first newspapers in the early nineties, Germany had only just reunited and was struggling to digest forty years of totalitarianism and centrally planned economy in the new eastern states. Though only marginally affected, I internalised the sentiment of continuous economic uncertainty, imminent danger of social decline and an almost defiant determination to succeed against all odds. In my small town, situated about ten kilometres northeast of Berlin, unemployment was rampant. While my own family adapted relatively smoothly and were able to embrace the changes, many classmates of mine were constantly worried about the future. What would happen to their parents’ jobs? The consolidation of the German state left many people feeling discarded and without use. Frustrated, they gave up trying to integrate into a system that overwhelmed them with its constant imperatives of competition, performance and image cultivation.

Do you really think this education will pay off in the end?

Young, naturally competitive and narcissistic enough, I was able to make myself at home in this world. Growing up in a financially stable family, I benefited from all the advantages capitalism had to offer – not least an excellent education abroad, learning languages through immersion rather than school books, effortlessly assuming the habitus commonly displayed around me. I decided to study sociology, a rather post-materialist choice, which scandalised my grandmother who, not having heard correctly, thought I wanted to study socialism. “Do you really think this education will pay off in the end?” she asked with concern. I managed to reassure her, but little later I would ask myself that very same question.

Germany entered the mid-noughties as the “Sick Man of Europe” with zero growth – a euphemism for stagnation – and five million unemployed. In addition to the steadily falling German real incomes, the introduction of the painful-but-necessary Hartz (labour) reforms brought wage and social welfare cuts, fuelling fears of a dire future. My fellow students and I braced ourselves for careers in taxi-driving while sailing from one unpaid internship to another like corporate nomads trying to find our home in the job market. Maybe studying socialism would have paid off!

Time for Plan B, I thought, remembering the EU’s four freedoms – free movement of goods, services, capital and persons – I’ll just go where the jobs are! My heart was set on London, the economic hub of Europe, the world’s top financial centre. All the roads travelled by the ambitious and successful seemed to lead there. And this time I was going to get it right – I was going to study economics! I got accepted for a master’s programme at the LSE and so began my dreams of a smooth, perhaps even pre-graduation, recruitment into one of the leading firms who toured UK universities every year, fishing for “high potentials” on the so-called “Milk round”. And then, just a few months later, the Lehman Brothers had the audacity to pulverise my hopes for a smooth career debut once more.

2009 – No milk (round) today! Youth unemployment in the EU

London shrank faster than any other financial centre in the world – and, ironically was much harder hit than Germany. It almost felt as if I was personally being punished for having left my country when it was down! Technically, I could have gone back home. In practice the free movement of labour is not without restrictions. My beloved restriction measured 180cm and spoke French. I chose to stay in London, taking part in the merciless rat race for ever-fewer jobs. In the UK, graduate programmes more than halved their intake. Many firms stopped recruiting altogether, posting on their websites the infamous “Unsolicited applications will not be accepted.” The Milk round hit a dry spell. Initiating young people into the labour force, training them up, paying them a salary? These were now unaffordable luxuries. “We need people who hit the ground running!” “High potentials” now only included those with a first-class degree, at least three years of experience and the energy and/or resignation to work for two while being paid half. And if these weren’t available, companies would have to close up shop and move the jobs to Asia altogether. It’s the economy, stupid!

Economic crises usually go hand in hand with higher unemployment. And according to a recent study by the European Foundation for the Improvement of Living and Working Conditions (Eurofound), young people in Europe have been hit particularly hard by the recession with regard to their employment prospects. In the first quarter of 2011 the youth employment rate in Europe dropped to 32.9%, the lowest value ever recorded in the history of the European Union. Approximately five million young people were unemployed that year. Moreover, in some countries, completing tertiary education no longer lowers the risk of unemployment compared to having no qualifications. This is not only the case for a few southern and eastern periphery countries, but for Denmark and Finland too. If the protection effect of higher education is no longer a given, why invest all the time and money in the first place? For many well-educated youngsters the crisis is at best mass-producing “spotty résumés” showing jumps from one temporary job to another. Employers recoil in horror. But they don’t know the horror of trying to pay off a student loan on minimum wage…

As the months wore on, my patience wore thin. Again and again I had to explain why I was choosing unemployment in London over an indeterminate long-distance relationship. And sometimes at night, I had to explain it to myself, too. Was I really such a romantic fool? Was I throwing away years of education for love? But, then again, why should I have to throw away love for a job? How much of the no-strings-attached flexibility the labour market demands can a society cope with before this process of “career atomisation” finally leads to its demise? Eventually, my persistence – and good education – paid off. After six immensely troubling months, having weathered the week-long interview process and seemingly endless aptitude and motivational tests, I prevailed over 104 competitors. I had my first real job! Thousands like me were not as fortunate.

2012 – Spilt milk? Are we a “lost generation”?

It is not by chance that the cohorts of youths entering the increasingly competitive labour market during the crisis and in its aftermath have been labelled “a lost generation”. Between 2008 and 2011, the percentage of young people out of work for a year or more, as a portion of the overall work force, doubled across OECD countries, making young people one of the demographic groups most at risk of long-term unemployment. It means that young people are facing longer periods of joblessness during a very critical phase in their employment careers. This can have a “scarring effect”, jeopardizing long-term earnings and career paths, affecting them for the rest of their lives (OECD Employment Outlook 2012).

While the situation is tough for everyone, it is even bleaker for those with lower levels of education and skills who are being crowded out by those with higher degrees desperate enough to take on any coffee shop job as long as it pays the bills. Particular concerning is the growing number of youths who are not in employment, education or training (NEET). Across the OECD countries, the NEET rate rose 1 percentage point between 2008 and 2011 to 16.4 per cent. The OECD report also warns of potential skill depreciation, loss of self-worth and motivation to the point that the unemployed choose not to, or are unable to enter the workforce even after the economic recovery is complete and demand is restored. This deterioration of the labour force could lead to higher structural unemployment in the future. Flashback: East German small town after the collapse of the local economy!

Lost is only what we give up! Why not create a European Youth Employment Taskforce?

Can this scenario be a rational choice for businesses and policy makers? We cannot afford to lose a generation! For decades, western countries’ governments (and households) were able to increase consumption because they kept building up debt, borrowing more and more money from the next generation. From those today labelled as “lost”. Are we willing to write off the future of a whole generation, the future of Europe, as a sunk cost? Are we doing enough to prevent this horrendous label from turning into a self-fulfilling prophecy? Lost is only what we give up! Many measures to re-engage young people into the labour market or into education have been introduced by the EU Member States. While these efforts are commendable, the effectiveness of these policies remains doubtful and concerted action at the European level is missing. Why not create a European Youth Employment Taskforce? Unemployed young Europeans knocked about by the crisis deserve more attention! As François Mitterand expressed it: “If young people are not always right, the society which ignores and knocks them is always wrong.” And, I think, we all know why: It’s the future, stupid!