Quality of jobs created is vital not just for young people, but for the economy too
Marianna Georgallis, Policy & Advocacy Coordinator at the European Youth Forum
One month ago, all eyes turned to the Greek drama playing out in Europe. It has been a month of fraught negotiations, a shock referendum and a European Union and its leaders put under the spotlight, with European values of solidarity and unity questioned and, some might say, threatened. The focus has been largely on numbers – on the billions needed to avoid a Grexit, on the daily €60 cash withdrawal limit currently in place. But the ultimate reason for the past weeks of drama has not been figures – it has been people. The Greek government’s actions, right or wrong, are attempting to reverse the trend of years of wage cuts, welfare cuts, growing poverty, inequality and dire levels of unemployment. Undercutting all talk of currencies, of bailouts and banks has been the grave social impact of the economic and financial crisis and Europe’s response to it.
The statistics are there and are by now well known. The OECD Employment Outlook 2015, published earlier this month, highlights what has been mentioned in countless political speeches over the past years: Europe is suffering a social crisis. Unemployment rates give the first indication of this: Whereas unemployment has fallen below 6% in the United States and is under 4% in Japan and Korea, in the euro area the unemployment rate remains above 11%. It is clear that Europe is still lagging behind the rest of the world when it comes to employment.
These statistics are higher and more shocking when it comes to young people specifically. The share of young people neither employed nor in education or training, the so-called NEETs, has reached a staggering 40 million across OECD countries – with 27 million of these NEETs totally off the radar – a disappeared mass of young people, registered nowhere.
The enduring effects of this are a serious cause for concern. More than one in three jobseekers in the OECD has been out of work for 12 months or more. Long-term unemployment has serious consequences, ranging from deterioration of skills, lack of confidence which can lead to mental health issues and an impact on the economy through inactivity and costs of welfare provision such as unemployment benefits. However, the new finding of this year’s Employment Outlook is that a person’s long-term career prospects are largely determined in the first ten years of their working life. Long-term spells of unemployment can have an influence well into one’s career in terms of earnings – meaning that upward earnings mobility can be reduced having been long-term unemployed as a young person. This in turn raises income inequality and thus impacts economic growth through, amongst others, perpetuating under-investment and lower aggregate output.
However, it’s not just about having a job. The European Youth Forum has been calling for an end to the ‘any-job-will-do’ approach which has persisted since the onset of the crisis, with no real attempt from European policy-makers to address this. The Outlook shows that youth, alongside low-skilled and informal workers, typically hold the poorest quality jobs. The disproportionate increase of young people on temporary contracts over recent years is not a case of voluntary temporary employment – it is clearly a situation of forced, precarious work. Unpaid internships are a clear example of this – you would be hard pushed to find a young person, fresh out of their studies, willing and happy to work for free for 6 months – yet the 5 million interns in Europe, almost half of whom are unpaid, show that this is unfortunately the current reality.
Quality employment is a right, enshrined in several universal legal frameworks. Unfortunately this has been ignored by too many governments and EU leaders; focusing on job quality is perceived as a drag on job creation. The Employment Outlook disproves this, however, showing that the best performing OECD countries in terms of employment rates are also the ones that have the highest level of job quality. This is why the clear message of the Outlook is that governments must take action to foster stronger employment growth, implementing direct measures to improve workers’ access to productive and rewarding quality jobs.
The European Youth Forum views the new Investment Plan for Europe as an opportunity to do this. If the focus is on investment in quality job creation, particularly in emerging sectors with great potential such as the green economy and ICT, there is hope yet that the social crisis, experienced in Greece but also across the board, can begin to be reversed. Governments need to fulfil their duty of ensuring that all young people are able to access their social and economic rights, in order to achieve independence and autonomy, and thus contribute to a healthy economy and an inclusive society in Europe and the world.
Employment Outlook editor Paul Swaim writes about this year’s edition here