Wednesday, 21 August 2013

Youth Unemployment in Europe - What are the effects and how can we solve it?

by Karina Shooter

Photo Courtesy of gkardashev.com

In July, Angela Merkel announced that youth unemployment was a priority in the Eurozone. Many people believe that this decision was far overdue - the youth unemployment rate is now at 58.7% in Greece and 56.1% in Spain. But what is the effect of youth unemployment and what can we do to reduce it? 
The first question which needs to be addressed is why youth unemployment is more dangerous than unemployment in general. The main reason for this is that jobs become easier to get the more experience you have - it is important for young people to get on the 'job ladder' quickly, so they can gain experience and progress to better jobs. If youth unemployment is rife, then a generation of young people gain no experience, so even when the economy stabilises and employers are willing to hire workers again, they are too inexperienced to be offered a job - hence they become 'the jobless generation'. This is a massive waste of skills and resources. The second issue which arises from mass youth unemployment is an ageing population. When youth unemployment is high in a particular country, young people tend to move abroad in order to find work. This means that countries such as Spain and Greece, have lots of older retired people in their country but not enough young working people who pay their taxes so the government can support the citizens - this may, at an extreme, result in poorer quality state education which would lead to under qualified youth and may cause a youth unemployment spiral. 
So, youth unemployment is undeniably a bad thing - what can we do to stop it? In Europe, leaders have promised that every young person will have a job, apprenticeship or higher education place within four months of becoming unemployed. They have called this the 'youth guarantee'. However sceptics claim that the 8 Billion Euros which they have said will back the scheme over the next two years is not enough to make the scheme work. Almost 8 million young people in England are not in work, training or education, so that would only be €850 a year per person - hardly a decent enough wage to live on. 
So what else can we do? Governments need to try a variety of initiatives. Governments should deregulate the labour market to make it more flexible and encourage firms to hire more workers, in addition the government could cut payroll taxes on young workers (the Italian government has done this).
Other suggestions which have stemmed from angry youth on social media sites seem to be more extreme. One idea is to ban outsourcing certain business operations outside of the EU, such as call centres which answer calls from the EU - this would provide more jobs for young people. Another idea is job sharing, instead of an employers hiring one worker for eight hours, they employ two workers for four hours each. This increases jobs, productivity (because workers would be more focused on their shorter shift) and people would have more leisure time to relax and spend time with their families. However, there would have to be structural change within society so that people could afford to live on their part time salary. 
According to Angela Merkel, youth unemployment is the 'most pressing problem' in Europe, but our leaders should have noticed that before it was able to reach this extent. People say 'Better late than never" but I think that Europe's leaders need to be less reactive and more proactive.

1 comment:

  1. The rate of unemployment presented should be very accurate at all times. We cannot strike the culprit if the target is blurry. Having a protection like income insurance is good enough bu striking the main enemy is something that should be dealt with seriously.

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