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Youth unemployment at the Economic Forum: how to solve it?
Insight

Youth unemployment at the Economic Forum: how to solve it?

| Text: Berit Kvam, illustration NORDREGIO and Berit Kvam, photo: Economic Forum Archives

What is needed to make sure young people can find a proper job, allowing them to make a decent living? Youth unemployment hits the Nordic countries and other European countries in different ways, but it remains a major challenge for all of them. Is the youth guarantee the solution? What is the answer?

The questions were posed and answers sought by representatives from the European Youth Forum during the panel debate on youth unemployment which was one of nearly two hundred different panel debates during the 25th Economic Forum in Poland.

Economic Forum Krynica is a high profile political and economic conference with participants spanning politics, civil society and business. The annual conference is held in the Polish town of Krynica-Zdrój, near the border with Slovakia. Economic Forum Krynica aims to be a “Davos” for Eastern and Central Europe, like the Swiss town has become a brand for the World Economic Forum. 

This year the conference celebrated its 25 year anniversary by welcoming three presidents, from Poland, Croatia and Macedonia on the opening day. The conference gathered more than 3,000 participants between 8 and 10 September, housing debates on everything from security policy, business development, energy and international policies to youth unemployment. 

The Polish Prime Minister, Ewa Kopacz, addressed the conference’s last day.

Ewa Kopacz

Her main focus was the flow of refugees to Europe, and she called for solidarity, political agreement and the decent treatment of refugees. The refugee crisis coloured much of the debate in several fora, but youth unemployment was the focus of one out of the nearly 200 panel debates.

A challenge from young people

European Youth Forum organised a side conference, and during the European Forum representatives from the youth conference made their mark with critical yet genuinely interesting questions. What is the strategy? was one of the questions they asked the panel participants from Denmark, Poland, Hungary, Ukraine and the Nordic Labour Journal. 

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Left: Berit Kvam, Izabela Kloc, Morten Binder, Katalin Novak, Rafal Wos, Oleg Vostrykh.

The broad panel mirrored the diverse situations found in different European countries. 23.9 percent of Polish 15-24 year olds are unemployed and in Hungary the number is 20.4 percent — close to the levels found in Finland (20.5 percent) and Sweden (22.9 percent) according to Eurostat.

Even if you do not count Swedish youths who are in training or looking for jobs, the number is far higher than the number of young unemployed 15-24 year olds in Denmark, Iceland and Norway. But now the trend looks like it is about to turn in some countries. Youth unemployment in the EU 28 is also falling. 

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Unemployment trends among 15-24 year olds in the Nordic countries and the EU 28 

The diagram we have made based on OECD statistics shows that youth unemployment in the Nordic countries is developing in different directions. It is falling in Iceland and will soon be as low as before the crisis hit in 2008/2009.

Youth unemployment is also falling somewhat in Sweden, while in Denmark it is nearly at pre-crisis levels. 

In Norway and Finland the opposite is happening. General unemployment is rising in both countries, and in particular among young people. 

Youth guarantee — a solution?

The youth guarantee is one of the solutions European governments have presented young people with. The EU adopted the programme in 2013 and it is being implemented by all the member states. According to the EU Commission this is “probably the fastest adopted structural reform in Europe”.

The youth guarantee promises an offer of training or good work linked to education and experience for all young people no later than four months after they have become unemployed or have ended their education. 

The ILO has made a survey of the experiences so far: The Youth Guarantee programme in Europe: Features, implementation and challenges.

The authors call the youth guarantee “one of the most innovative labour market policies of recent years,” citing success factors like early intervention, identifying target groups, a good institutional framework, high quality programmes and sufficient resources. 

The survey also concludes that the member countries have prepared well in accordance with the success factors, but that not enough resources have been allocated in order to implement the good intentions. The analysis estimates that the youth guarantee in the countries covered by the survey is underfunded by as much as 7.3 billion Euro. 

Not enough resources

The youth guarantee was a keyword highlighted by the countries’ panel representatives too. Polish politician Izabela Kloc underlined the importance of the programme and its future plans, but also said Poland had so far not made much progress in the implementation of the guarantee. 

Izabela Kloc was challenged by representatives from the European Youth Forum who asked her what she felt needed to be done in order to get jobs for young people that were not temporary and precarious.

Izabela Kloc

The EU Commission has also criticised the quality of youth employment in Poland: “Poland has the second highest incidence of temporary contracts among young people in the EU, and the transition rate from temporary to permanent employment is low.”

Izabela Kloc, who is a member of the opposition in parliament, did not hide the fact that Poland faces major budgetary and organisational challenges in implementing the youth guarantee. But the goal is there, she argued.

Nordic countries are among those that have come far in implementing the youth guarantee. The idea originated in Nordic countries which introduced similar measures already in the late 1980s and early 1990s, but today’s strategy is a more developed one. 

The Nordic countries have shortened the waiting time from four to three months. Denmark stands out with even more ambitious goals. They have cut the guaranteed time down to two weeks, said Morten Binder, head of the Danish Agency for Labour Market and Recruitment. 

He explained how Denmark has linked benefits to activities. Young people will not receive welfare support if they refuse activity offers. 

Denmark’s youth unemployment is low compared to the EU average, but the country faces a challenge when it comes to the number of young NEETs, people who are not in education, employment on training, the EU Commission underlined in its document on the implementation of the youth guarantee: “This challenge must be addressed before the young people are lost in the transition between school, education and work.” This is a challenge which Denmark is now trying to tackle by using stronger measures. 

What is needed?

The Nordic Labour Journal has written a range of articles about the good examples: about Sweden’s 90 day guarantee, about measures to cut the number of NEETs in Denmark, about the Finnish youth guarantee and other themes which look at how to help young people into working life by using active measures, or by contributing to increasing the individual’s skills basis and finish their upper secondary education. 

The good examples all have some things in common; the success criteria mentioned by the EU’s youth guarantee. This especially applies to the fact that young people who are struggling to finish their schooling or accessing the labour market must be seen as individuals with individual needs and challenges. But even though these challenges are getting a lot of attention, as exemplified by the debate at the Economic Forum in Krynica, there is still some way to go before European youth unemployment falls to an acceptable level, as long as government investments fall short by billions of Euro.

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