Yves here. Even though this post hews to the convention of a describing the labor market conditions in Europe in clinical terms, the data reveals deeply troubling conditions, such as a high and in some countries rising level of families with no wage earner, which sets the stage for the continuation of poverty, as well as putting them in danger of becoming homeless. “Lost generation” is too kind a term to depict the conditions facing the young. Instead of being able to make choices and at least to a degree, shape their future, they are desperately trying to find a foothold of any kind.
By Olga Tschekassin, a research assistant at Bruegel. Originally published at Bruegel
Since the beginning of the global financial crisis, social conditions have deteriorated in many European countries. The youth in particular have been affected by soaring unemployment rates that created an outcry for changes in labour market policies for the young in Europe.
Following this development, the Council of Europe signed a resolution in 2012 acknowledging the importance of this issue and asking for implementation of youth friendly policies in the Member States. Yet, almost 5.6 million young people were unemployed in 2013 in the European Union (EU) – in nine EU countries the youth unemployment rate more than doubled since the beginning of the crisis.
In this post we draw your attention to two more indicators reflecting the social situation of the young generation: the percentage of children living in jobless households and the percentage of young people that are neither in employment nor education nor training.
Children in jobless households
The indicator Children in jobless households measures the share of 0-17 year olds as a share of the total population in this age group, who are living in a household where no member is in employment, i.e. all members are either unemployed or inactive (Figure 1).
Figure 1: Children in jobless households
Country groups: 10 other EU15: Austria, Belgium, Denmark, Finland, France, Germany, Luxembourg, Netherlands, Sweden and United Kingdom; Baltics 3: Latvia, Lithuania, Estonia; 10 other CEE refers to the 10 member states that joined in the last decade, excluding the Baltics: Bulgaria Czech Republic, Croatia, Hungary, Poland, Romania, Slovenia, Slovakia, Cyprus and Malta; Sweden: data for 2007 and 2008 is not available, the indicator is therefore assumed to evolve in line with the other 9 EU15 countries.
Such approximation has only a marginal impact on the aggregate of the other EU15 countries, because children in jobless HH in Sweden represented only 3% of the country group in 2009. Countries in groupings are weighted by population.
In the EU28 countries this share rose only slightly over the past years to 11.2%. It is striking, however, that the ratio of children living in households where no one works more than doubled in the euro-area programme countries (Greece, Ireland, Portugal) as well as in Italy and Spain to 13% and 12%, respectively. And even more shocking – while the share stabilized in the programme countries, in Italy and Spain it is still sharply increasing. In Ireland in 2013 more than one in every six children lived in a household where no one worked. This is indeed an alarming development. Only the Baltics, which experienced a very deep recession as one of the first countries hit by the crisis, are reporting a sizable turning point in the statistic in 2010 and the share is presently continuing to decline. The numbers are, however, still well above pre-crisis levels.
A high share of children living in jobless household is not only problematic at the moment but can also have negative consequences for the young people’s future since it often means that a child may not only have a precarious income situation in a certain time period, but also that the household cannot make an adequate investment in quality education and training (see a paper on this issue written for the ECOFIN Council by Darvas and Wolff here). Therefore a child’s opportunities to participate in the labour market in the future are likely to be adversely affected. Moreover, as I discussed in a blog earlier this year, children under 18 years are more affected by absolute poverty than any other group in the EU and the generational divide is widening further.
Not in Education, Employment or Training (NEET)
The financial situation of young people between 18 and 24 years old who finished their education is less dependent on their parents income because they are usually enter the labour market and generate their own income. Therefore we are going to have a closer look on their work situation, i.e. how many young people have difficulties participating in the labour market.
Figure 2: Not in Education, Employment or Training
The NEET indicator measures the proportion of young people aged 18-24 years which are not in employment, education or training as a percentage of total population in the respective age group. We can see in Figure 2 that the situation among EU28 countries stabilized over the last four years.
The good news is that for the first time since 2007 we see a decline in the rate in the euro-area programme countries in 2013. This decline is, however, mostly driven by Ireland with an unchanged situation in Greece and Portugal. Also, in the Baltics the ratio is on a downward trend. More worrying, however, is the situation in Italy and Spain.
Among all EU28 countries, the young generation in Italy with 22.2% of all young people being without any employment, education or training, is disproportionately hit by the deterioration in the labour market. Every fifth young person between 18 and 24 is struggling to escape the exclusion trap. Europe and especially Italy is risking a lost generation more than ever.
Labour market policies for young people should therefore stand very high on the national agendas of Member States. The regulations introduced in summer 2013 into the Italian labour market reform which are setting economic incentives for employers to hire young people build an important step towards more labour market integration of the youth in Europe. Their effects are yet to be observed in the employment statistics in the coming years in Italy. More action on the national and European level is needed to improve the situation of the young.
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A good example of zombie ideas in action, eighty years after Keynes showed a labor market does not exist in the classical or neo-classical sense. While Tschekassin’s heart is certainly in the right place, holding onto this false notion makes possible the continued assault on income and job security for workers.
Precisely, these facts reveal the depth of the misery imposed by neo-liberalism and, unfortunately, we must presume that the author supposes that a targeted, piecemeal approach to youth unemployment can stanch the wound, but this is like tying a tourniquet on the arm of a hit-and-run victim. So what to do? IF we presume that the situation is not acute but chronic and that where measures have alleviated joblessness, they have done so by creating poorly paid positions (verging on indenturetude) like two-tiered hiring, then jobless youth are simply at the extreme position on a continuum of precariousness. Is there a better idea than Basic Income?
Is there a better idea than Basic Income?
Yes, a Job Guarantee, a much better idea. Basic Income has many problems, and without a Job Guarantee, is just another income-denial program. It would technically be the easiest thing imaginable to implement 100% full employment in either with a comfortable basic wage. Presuming that alleviation (rather, eradication) is only possible by “creating poorly paid positions (verging on indenturetude)” has no theoretical or factual, historical basis at all. Europe is rich. The USA is rich. (In Europe, the Euro suicide pact is an obstacle, of course.) And a JG, full employment would make Europe or the USA much richer. Unemployment is fantastically expensive to societies, while work, including of course JG work, is what makes societies richer. The immense sadistic pleasure unemployment gives to ruling classes is the sole reason for its existence.
Ah, I understand the sentiment, but Keynes was first and foremost a disciple of Malthus. Keynes understood very well that forcing rapid population growth creates poverty for the many and riches for the few. Would that we still had people of his intellect and morality amongst us.
Various oligarchs and politicians in Europe and North America in recent days have recommended that young unemployed adults work for free to gain experience and build work habits. These Free Slaves would have the leg up on the competition when hiring picks up whenever. Please don’t confuse this with the intern movement where the scions of rich families work in glass towers for no pay while living in $5,000 a month apartments to gain experience and connections for future high salary jobs in government, law and finance. What’s being proposed now would allow unemployed youth to work for nothing sweeping floors, making beds and busing tables. This must be the antidote to raising the minimum wage.
Safe to say that “various oligarchs” et al haven’t seen the movie or read the book Fight Club then I guess! Imagine their surprise when they find out the hard way that truth definitely is stranger than fiction!
Might there be a correlation between average amount of hours worked per year and youth-unemployment?
If there was a correlation then reality and economic theory wouldn’t match so then the reality is of course wrong – Economy is a science where generally accepted theories are always correct….
& subsidising companies to hire young has been tried in several countries. It turned out to be a costly subsidy that made company owners wealthy and had marginal (at best) effect on youth-employment. Seems like displacement-effects etc was not taken into consideration.
Strange how many proposals from economists benefit companies and marginally (if that) improves life for citizens.
Look, ultimately, there aren’t enough jobs to go around in part because of neoliberalism and the TINA movement that underlies that ideology. There is far more to life than working as field hands on a plantation–there really is. And those who are the “house niggers” that work for large corporations and who keep that system afloat–shame on you stop it!
We need to create something new and give us some comforts–I know it’s hard but if you want something different for your children and grandchildren you have to change–we have to change.
“And those who are the “house niggers” that work for large corporations and who keep that system afloat–shame on you stop it! ”
You have fallen prey to a fundamental misconception. The problem isn’t those whose work facilitates large corporations, and quitting them is not a solution. That mentality is like blaming the low-level soldier for wars created by political, economic, and military power brokers. The problem is not the individuals, it is the system. The only solution is to change the system.
Easier said than done Banger. Shame on you if all you’re offering is “we have to change!”
Banger–
Thanks for being the contrarian on this thread.
Basically I agree: It seems that the youth in Europe have not figured out the system no longer functions. Nothing special about that: Most people everywhere have not figured out that the system no longer functions.
It would if it could, but it can’t. Those days, when it could, are gone.
I would describe it this way; We are in a progressive–in the sense of terminal–situation where for more and more people, survival inside the system is not possible. Put it this way: You can no longer afford to work! No job on offer will pay you a net benefit–it will cost you more in time and energy than you will ever get back in cash or wages. Time to quit! Walk away!
Fine, but what is the solution? you ask. Well, there are a zillion solutions, but they are all niche solutions, every single one of them. The system does not want you to survive. It wants to kill you, and no general solutions are on offer. You make your own solution. You have to figure out how. But you will not figure out how until you realize the system has exactly nothing to offer. That is your starting point.
Your are not alone. Other people figure this out as well. Now you have a team. That is your first step.
The system will oppose you. There is a lot of information in that opposition. Learn and use that information, while you evade the system’s opposition to you. As you evade, you will learn to see the things that open for you.
People who are comfortable probably won’t get this–but they will! Don’t wait for them, though: You don’t have time for that.
–Gaianne
Umm . . . I should have been more precise: Zillions of niches, yes, but no niche exists until you perceive it.
The problem is that our models of reality have departed so far from reality that they are useless. You have to just look, with no preconceptions, or even just plain conceptions.
There are no mass solutions. Mass solutions depend on correct models, but there are no correct models.
It is true that we have a pretty good idea what a sustainable world would look like, but the existing political order still has enough power to prevent any large-scale practical action toward that. So that is of only modest help, a sort of general orientation, as it were. Any practical actions have to be small-scale, off-radar (invisible or illegible–thank you Venkat Rao), and able to evade interference from the system.
And they can’t be so similar to each other that the system can find them with a dragnet.
Sounds hard? It is. But also, it is already happening.
–Gaianne
The extravagant social safety net and high taxes are the problem. Cut taxes and it will all trickle down. /sarc/
Thanks for that postscript. There are plenty of people who say this without sarcasm.
My father used to say “If you’ll lie, you’ll cheat and you’ll steal too.” The government-backed banking cartel lies, cheats and steals and KILLS too. How about we kill it first but without wrecking the economy in the process?
When I think of the damage that cartel does, I wonder if Dante was not far wrong.
It’s awful to see this slow moving disaster lurch onwards. I don’t think we’re going to like the European continent that emerges from a long torture a deprivation of it’s young.
I also wonder how much of the Baltic states improvement is actually related to net migration out of the country? Michael Hudson has pointed out that employment rates in Latvia improved after neoliberal policies were implemented, but that the actual improvement was due to the fact that the educated and young left en masse. Perhaps a similar trend underlies the data in the graphs from the article.
I am not against everyone being able to work, given that they things people will working at are worthwhile and deleterious to the environment. Unfortunately what most people mean by “job” these days usually translates into becoming some for of useless office plankton, working at tasks that in some indirect fashion are either destructive to society or the environment. It’s probably better for humanity as a whole that these people remain unemployed.
You’re probably right, although you can follow the causal links from there.
Go look on ebay and you can see an impressive number of guys in Spain selling ancient coins and stuff that they found with metal detectors. I take that as a sign of nothing better to do with their time and energy.
ISIS (ISIL) is hiring.
And young Americans are volunteering! If you can believe our lying media at least.
The children and jobless households will be the cannon fodder in the coming wars. War is hope.
Might be right. It’s a way out anyway.
Extremely disheartening. I wonder if people in Europe are still raiding infrastructure to sell the parts for income. If the European situation is any indication of America’s future, perhaps it is that things just might have to get far worse before they can get better, because the nation may have to hit rock bottom before a majority of people begin to really try to obtain a better answer. But then, the nation hits rock bottom with some regularity and the resulting changes made aren’t very robust, or they’re the wrong changes; like deficit reduction and loosening of financial regulations. So we keep ambling along on life-support.
With enough deprivation the young will quickly learn that a complex society has many functional choke points. (e.g., one disabled vehicle chokes a freeway.) Soon enough the “terrorists” will be homegrown.
Soon enough?
RE: “I wonder if people in Europe are still raiding infrastructure to sell the parts for income.”
A good, perfectly habitable housing estate can’t be saved for use by those who really need it. Instead, it’s to be sold off to developers who’ll turn it into residential properties for sale to high-income people–and this is in the heart of the area developed for the 2012 Olympics, pitched then as “good for the ordinary public”. Yeah, right. See search-term : “E15 Mothers”
And, see e.g. :
“For real politics, don’t look to parliament but to an empty London housing estate”
“A group of 29 homeless single mothers, about to be shunted 200 miles away, have taken radical action”
[ Link: http://www.theguardian.com/commentisfree/2014/sep/23/real-politics-empty-london-housing-estate?CMP=fb_gu ]
A lot of people are asking themselves why they are paying all the secretaries, managers, lawyers, doctors and politicians, to make a profit on poverty, passing paper around in a compliance circle, while they watch their own children live in poverty.
Funny, the kids go into public education with high self esteem, and come out as adult juveniles with low esteem, begging the empire of peer pressure that stole their identity for an antidote.
And Hillary’s path through a republican congress is going to be that corporations and businesses don’t create jobs, that government, the ultimate corporation, does.
Should be interesting, watching the critters hold onto that assumption that oil and aircraft can only go up, while they go to war trying to prove it.
…always trying to prove that the individual, which they all depend upon, is irrelevant…crack me up.
Notice the irony of CA’s position?
life is not a competition for artificially scarce resources, but you will never convince the cavedwellers, surrounded by extra housing, cars, ad nauseum, of that. Empires operate exactly backwards, for a reason.
Or it needn’t be at least. Empires operate in reverse to keep its subjects trapped in the illusion that the empire is necessary for their happiness in the first place, thus justifying the empire’s aristocracy’s place in the world.
A lot of people are asking themselves why they are paying all the secretaries, managers, lawyers, doctors and politicians, to make a profit on poverty, passing paper around in a compliance circle, while they watch their own children live in poverty.
Or they would be, if they themselves weren’t all secretaries, managers, lawyers, doctors and politicians.
Funny, the kids go into public education with high self esteem, and come out as adult juveniles with low esteem, begging the empire of peer pressure that stole their identity for an antidote.
As per the plan.
And Hillary’s path through a republican congress is going to be that corporations and businesses don’t create jobs, that government, the ultimate corporation, does.
False choice. In fact, neither will at this late stage.
Should be interesting, watching the critters hold onto that assumption that oil and aircraft can only go up, while they go to war trying to prove it.
…always trying to prove that the individual, which they all depend upon, is irrelevant…crack me up.
Notice the irony of CA’s position?
True enough. Going to war is only a diversion, which I think the peeps are beginning to wise up to. Alas, not fast enough!
“Funny, the kids go into public education with high self esteem, and come out as adult juveniles with low esteem.”
As a high school teacher, I spend a lot of time around teenagers, and low self esteem is not really a problem for them. The dead, tedious system of high-stakes testing only reinforces their belief that learning is a fundamentally boring endeavor, and therefore, who needs it? The regime of electronic distractions and mindless entertainment is there to create/manufacture their “needs,” the most important of which is a narcissistic cocoon of high self esteem.
High self esteem = personal/cultural narcissism.
It seems to me that humility is required for learning and creativity.
Interesting debate via data from UK – regarding the cost / benefit of Immigrants. That drives people who are caught in this push/pull to go to the nationalism and hate everyone else as “other” which will tear the fabric of the EU apart – but in a really ugly way.
http://www.cream-migration.org/files/FiscalEJ.pdf
These are features, not bugs.
Neo-liberalism is a political ideology, that uses some ‘economics’ (all very dodgy or just plain wrong) to justify the decisions made to achieve the society desired. This basically a romantic view (from the top) of Victorian England in its early stages (before industrialisation really got going), with an all powerful and insanely wealthy rentier elite, a tiny professional class of ‘enablers’ …and everyone else as workers/peasants. Zero health/social systems of course and the elites contributing nothing to society (zero taxes), instead extracting virtually all wealth from it.
That’s the dream.
Several of my european friends have emigrated. A few from London to Germany, a few from eastern europe to the US (advanced enough degrees to make that possible). EU neoliberalism is like a vise.
Why do people talk about privileging some subset of the unemployed? Don’t that understand that to privilege one group, you have to privilege them OVER some other group. You have to take employment from some group to make the privileged group better. Why don’t these people ever say which group it is that they think jobs should be taken from?
Even the “employed” youth no longer have the job security the once did. Here’s an example: One of our nephews in his 30’s, a fully trained medical specialist who scored high enough on his state exam so that he could pick where he wanted to practice a few years back, has a job in a top Madrid hospital. Working on “three month” contracts!
While it’s possible to get a medical education in Spain without going into debt – assuming one’s parents can afford to provide food, clothing and shelter, consider the uncertainty of being a professional with so much economic uncertainty. Marriages and families are being postponed. Who’s gonna give people like this a loan?
So it’s not just a lost generation. The fabric of society is being torn apart in many ways.