Jobless Youth: Will Europe's Gen Y Be Lost?
With one in five Gen Yers unable to find work, a new "lost generation" may be in the making in Europe. Policymakers fear long-term unemployment could diminish the generation's future prospects on the labor market.
Looking for work: Young people are joining the queues at Europe's job centers.
Policymakers worry prolonged unemployment will hurt an entire generation's ability to compete in the workplace. When the economy finally recovers, many of the under-25s will have become over-25s, and younger rivals will be nipping at their heels for entry-level jobs. The big fear: Europe's Gen Yers will suffer the fate of Japan's Lost Generation -- young people who came of age in the recession-wracked 1990s but lacked the skills to find good jobs even after the economy started to pick up steam.
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Governments are spending billions to keep the young busy via college grants and vocational courses until the economy recovers. On June 29, British Prime Minister Gordon Brown unveiled a $1.6 billion (1.1 billion) scheme to create 100,000 jobs for young people, with a special emphasis on helping those who've been out of work for more than a year. And on April 24, French President Nicolas Sarkozy announced a $1.9 billion plan to find work for 500,000 young people by June 2010. That includes grants to companies that employ Gen Yers and a 12 percent increase in new government-funded apprenticeships in plumbing, carpentry, and other trades.
Some wonder how much good those programs will do given the severity of the downturn. "There's pressure on governments to find employment for young people, but I don't see how that's going to happen in the short term," says Giorgio S. Questa, a professor at City University's Cass Business School in London.
Lavish welfare systems ease some of the strain for Europe's Gen Y. With state-sponsored health care and ample jobless benefits, Europeans have fewer worries than unemployed twentysomethings in the US. And young Europeans are more likely to bunk with Mom and Dad than their American counterparts are, so it's easier for them to make ends meet while looking for a job. In Spain, for instance, more than half of people under 30 still live at home.
But that has done little to ease the pain of the crisis for many Spaniards. When the country's construction and real estate industries were booming, under-25s often skipped college to go straight to work, cashing in on the credit-fueled bonanza. Since 2007, though, the economy has imploded and may contract by 3.2 percent this year. Many young people were on short-term contracts, so they were first to be laid off when times got tough. And skipping further education in favor of employment, they often lack such skills as foreign languages, IT know-how, and advanced math that employers demand. Says Carlos Serrano, a 25-year-old electronic engineer from northern Spain who has been looking for a job for a year, with no luck: "The crisis has trapped us graduates at the worst possible time."
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