16 May, 2012

Young People Jobs Crisis Shows How This Generation Has Failed the Next

Imtiaz Muqbil

Two reports and fact-sheets produced respectively by the International Trades Union Congress (ITUC) and the Organisation of Economic Cooperation Development (OECD) on May 15 and 16 have highlighted the catastrophic impact of the economic slowdown on the young people, especially in the OECD area. Released in advance of the G20 Labour Ministers Meeting in Mexico on 17-18 May, the reports warn that the difficulty young people are having finding jobs could soon burgeon into a social, economic and political crisis that could make the Arab spring pale by comparison.

Together, the reports are a damning indictment of the global mess created by the present generation, and the gross irresponsibility of bequeathing it for the future generation to clean up. The ITUC report is as blunt as can be: “Young people are the hardest hit by the crisis.” It is accompanied by calls for those responsible to be held accountable, and for leaders to come up with alternative, equitable and stable forms of development and sustainability.

The OECD assessment:

Paris, 15 May 2012 (OECD Media release) – Young people continue to bear the brunt of the jobs crisis, with nearly 11 million 15 to 24-year-olds out of work in OECD countries in early 2012. Youth unemployment in the OECD area in March 2012 was 17.1%, close to its November 2009 peak of 18.3%, according to new OECD data released in advance of the G20 Labour Ministers Meeting in Mexico on 17-18 May.

The new data (download here) show the radical shift in youth unemployment from before the crisis until now, comparing the trough to peak changes across countries. For example, in Spain, youth unemployment was 17.4% in March 2007 and had risen to 51.1% by March 2012.

Young European jobseekers are suffering the most in the OECD, with unemployment close to historic highs across the Continent. More than one in five young people in the labour market in France, the United Kingdom, Sweden, Poland, Ireland and Italy are out of work.

Youth unemployment is more than double the unemployment rate affecting the general population across the OECD. In some countries such as Greece and Spain, it’s three times higher.

“Governments need to address this economic and social problem with decisive and concrete action,” said OECD Secretary-General Angel Gurría. “My message to G20 Ministers in Guadalajara is that there are cost-effective ways to boost the employment prospects of youth, and that any fiscal consolidation strategy needs to be smart, growth-friendly and take care of future generations. We propose concrete and targeted policy action and investment in skills and education of the young to give them hope for a better future.”

The unemployment rate alone does not reflect the full picture, as many young people who have left education no longer appear in labour force statistics. At least 23 million young people in OECD countries are neither in education, employment or training – so-called NEETs – more than half of whom have given up looking for work.

There is growing concern that a significant and growing proportion of youth, even among those who would have found jobs in good times, are at high risk of prolonged unemployment or inactivity. This will likely hurt their entire careers and livelihoods.

Youth labour market difficulties are not confined to advanced countries but also affect most G20 emerging economies. While in some emerging economies the youth unemployment rate is very high, like in South Africa where one in two youth in the labour force is jobless, in others many youth are either inactive or struggle in precarious and informal jobs that do not provide social security coverage or career prospects.

In the short-term, says the OECD, governments should prioritise measures that target young people most at risk, notably those who leave school with few or no qualifications, or the children of immigrants. They should:

• move towards early intervention programmes and effective job-search assistance for different groups of youth;

• strengthen apprenticeship and other dual vocational training programmes for low-skilled youth;

• encourage firms to hire youth by reducing social security contributions or introducing wage subsidies. These should target low-skilled youth and those who have completed their apprenticeships, as well as small and medium-sized firms;

• reduce the gap between employment protection regulations on permanent employment and temporary contracts that can prevent entry-level jobs from acting as a stepping stone to more stable careers;

• ensure that minimum wages are not set at levels that discourage employers from hiring inexperienced and low-skilled young people.

Excerpts from the International Trade Union Confederation report: The Social Crisis Behind The Economic Crisis – The Millions Of Young People Unemployed (Download in full here)

(+) The financial crisis that broke out in 2008 has given rise to the worst economic crisis in 30 years and the biggest overall fall in GDP since the Second World War.

The result is that Europe is not only undergoing an economic crisis but also a far-reaching social crisis. Thousands of companies, above all SMEs, are going bankrupt, giving rise to high rates of unemployment, falling wages, cuts in social security, higher taxes on consumption, high basic commodity prices, as well as rising poverty and social exclusion.

Young people are the hardest hit by this crisis. As highlighted in the “Global Unions’ Statement to the G20 Summit” on 3 and 4 November 2011: “The rise in unemployment since the crisis began has hit young people particularly hard, and together with rising long-term unemployment, high youth unemployment threatens to weaken long-term growth potential.”

According to the figures published in the ILO report “Global Employment Trends for Youth” in 2011, youth unemployment rates have not simply seen a rise but a historical increase, going from 11.8% to 12.7% between 2008 and 2009 – the largest annual rise recorded in the last 20 years.

(+) Given the current context and the grim forecasts for the months ahead, the international trade union movement is recalling that with 45 million young people entering the labour market every year, the threat of youth unemployment can no longer be ignored.

(+) Today, many young people are no longer able to build a life plan, a vision of the future: “Some have to stay on for longer with their parents (if that is an option), others extend their studies, but for many, their financial situation is such that they are forced to leave their studies to do jobs with poor conditions, just to survive.” Indeed, young people, especially in times of crisis, represent a totally disproportionate share of precarious workers, whose jobs are usually characterised by atypical contracts, limited if any social benefits, huge job insecurity and very low wages, etc.

Increasing numbers of young people, faced with a more uncertain future, suffer from low morale, despondency and even depression. Margherita Bussi, researcher at the European Trade Union Institute (ETUI) adds: “If the situation does not change, we are likely to see young people developing a growing lack of confidence in political, social and economic institutions, which we would do well to avoid!”

“In 2010, very few young people took to the streets. During the summer of 2011, however, the number of young people protesting grew. I think they started to realise that they were the number one victims of the current economic crisis.” This is the analysis presented by Kostas Petrou, project manager with the Greek Federation of Junior

As regards the ideas behind the movement, Doreste believes they are rooted in the grave social consequences of the economic crisis and past policies that have heightened inequalities. “Moreover, we have every reason to be ‘indignant’ given the impunity enjoyed by those responsible for the crisis, on seeing how they have inspired the policies subserviently implemented by our governments and how the privileged few continue to get rich whilst the majority face ever greater economic difficulties.”

It is this state of affairs that spurred the emergence of many protest movements across Europe and elsewhere in recent times. Greece, Spain, Portugal, France, United Kingdom, Poland, … people across the globe, driven by momentous resolve, are rising up in increasing numbers and with increasing regularity to make their voices heard. Will governments prove capable of listening to them?

(+) Although the crisis is affecting Europe’s population as a whole, young people are three times as likely to find themselves unemployed than older workers. For Goda Neverauskaite, president of the Youth Association of the confederation of Lithuanian trade unions LPSK, one of the causes is that “employers want fewer workers to do a larger amount of work.

(+) Maria Kolk, president of the Students’ Council of the central organisation of Swedish universities SACO, explains that Sweden has a good social security system, but being excluded from the workforce before even having a chance to enter it has drastic consequences. “A person’s first job is often the key to all the subsequent ones,” she explains. “Unemployment affects people’s self confidence, their health and their social life.”

(+) Paulo Pereira explains that in Portugal, the risk of poverty is currently very high among young people aged between 17 and 24. Many students, moreover, have no alternative but to abandon their studies because their families can no longer cover the costs.

(+) Across Europe, an overwhelming majority of young people is, from one day to the next, being forced to accept jobs that only partially guarantee their rights and offer very little security, i.e. precarious jobs. “In the past, when people started work with a company at the beginning of their careers they usually stayed there for the rest of their working lives,” remarks Benoît Constant. “Nowadays, young people are dealt the cruel hand of an uncertain future. They are no longer able to envision their future and neither do they envision their role in society.”

(+) Young people’s job insecurity has been heightened with the crisis. For Paulo Pereira, a Youth Committee representative with the Portuguese teachers’ union, explains that some employers see the crisis as an opportunity, and take advantage of the situation, demanding more from their employees at the same time as paying less, thus increasing their profit margins.

(+) According to the European Trade Union Institute (ETUI), nearly all trade unions have seen a considerable fall in their membership figures over the last 20 years. Other indicators also reveal a weakening of their roles and positions at economic, political and social level. At the same time, society and its concerns are undergoing radical change. In the face of these challenges, several trade unions, including many of their young members, have started to reflect on how to renew themselves, to better respond to the needs of their fellow citizens.

Nathalie Guay is an advisor on the National Youth Committee of the Confédération des syndicats nationaux (CSN) in Canada, and a member of the ITUC Youth Committee. She explains that it is this assessment of our place in society that has led us to reflect on ways of renewing ourselves, not only to ensure that we are able to properly defend workers’ rights in the future, but also to influence the general course of things, in what seems to be a particularly key moment in history, an era characterised by numerous crises shaking the capitalist model.”

Regardless of the terms used to speak of it, more and more trade unionists are in fact convinced of the need for “renewal”. And whilst certain aspects of the debate may differ from one organisation to the next, there does seem to be unanimity on the overall direction of the change.