The recession has triggered one of the most surreal paradoxes in the field of employment. Whereas organisations and governments around the world are building up innovative policies to retain older employees at the place of work longer to mitigate the undesirable consequences that an ageing population brings with it, 21 per cent of people under 25 in the EU27 were unemployed as at November 2010, according to EUROSTAT.
The recent records of youth unemployment rate in Spain − 43.6 per cent (EUROSTAT), or in Britain − 20.3 per cent (Office for National Statistics), caused some panic that the recession may leave a permanent scar on the generation of the youth affected. In fact, this generation of young people that were affected is now called the “lost generation” and it is made up of those who cannot find work in spite of their high level of education as well as the fact that 2011 is being perceived as the year of economic recovery.
In its last Work Audit report, the London Chartered Institute of Personnel and Development (CIPD) stated that many labour commentators have overstated youth unemployment (16-24 years old) and this aspect could be applied to the rest of the affected European countries for two main reasons. First, young people are taking longer to graduate or continue their studies after graduating from university. Secondly, 30 per cent of young people who are considered unemployed are actually studying full-time while also looking for a job. The August 2010 Global Employment Trends for Youth published by the International Labour Organisation (ILO) highlighted that the decreased participation of young people in the labour force – 53.8 per cent in 2000, 50.9 per cent in 2010 and 50.2 by 2015 − is mainly due to young people continuing with their study for longer. ILO considered this trend as a natural consequence of the higher educational attainment and therefore, a positive development.
However, the ILO argued that this simplistic interpretation might eclipse the real situation. Full-time studies do not last forever, and ultimately young people have to apply for a job that reflects the acquired education and/or experiences. In this regard, the ILO report stressed that there is a part of the statistically inactive youth population that either work in precarious jobs or seek such work as they have no real alternative and live with the frustration of lack of prospects.
These two completely opposite current trends could lead to both social and economic problems in the short term. On the one hand, having young people engaged in training for a longer period means that a larger pool of more competitive, skilled and mature employees will be seeking higher quality jobs in the near future. In this respect, economic planners have to think hard whether such jobs will be available even after the major economies pick up.
On the other hand, those youths who give up looking for opportunities may be at high risk of suffering a deep sense of uselessness, frustration and anxiety that may affect the rest of their lives. This could also cause distortions in the labour market, as more people will try to beat the system, according to the ILO report.
Especially focused on the impact of the global economic crisis on youth, the International Labour Organisation warned about a possible cycle of working poverty and urged governments to invest and handle, as a matter of priority, the youth unemployment issue. Ignoring that advice means governments will have to face the cost of economic waste. Inactive young people would not contribute to the economic welfare of the country, entrepreneurs will write off a vast amount of productive potential and young people will not be able to achieve their full personal potential and goals. Moreover, social cohesion, which is so critical for stability and progress, will come into question.
The ILO in The Global Employment Trends for Youth, emphasized that, “young men and women today build the foundations for the economies and make important contributions as productive workers, entrepreneurs, consumers, agents of change and as members of civil society”. Hopefully, these foundations will not be entrenched in the legacy of a “lost generation”.
Ms Soriano is a Spanish journalist
at the Foundation for
Human Resources Development