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Wednesday, 20 April 2011

The European Union (2): Will there be a lost generation of youngsters in the EU ?

Yesterday the news was on Dutch Business News Radio station BNR ( that unemployment under the Spanish youth has risen to a staggering 43,2%. That means that from every five youngsters in Spain at least two are unemployed. These are really depressing figures and it doesn’t stop there:

Youth Unemployment
United Kingdom

Notice that Germany and The Netherlands are rarities here. I can explain the Dutch situation only by taking three circumstances into account:
  • The Netherlands had the parttime Unemployment Benefit (a 50% government subsidy on the salary of workers that temporarily had not enough work in a company). This enabled companies to keep personnel that they otherwise should have fired. Although I was against it (I still am), it might have worked quite well in some companies that suffered from a temporary setback, due to the credit crisis.
  • Quite a lot Dutch youngsters in technical professions (carpenters, construction workers or plumbers) and ICT personnel have become freelancers. When they lose their job/assignment, this doesn’t count in the unemployment statistics. So there might be some hidden unemployment
  • The Netherlands and Germany have their exports soaring currently (to the southern European countries) and this might help to prevent a strong growth of youth unemployment.

Further the figures for youth unemployment are ranging from bad (United Kingdom) up to disastrous (Spain and Greece) and this indeed raises the question whether you could talk of a ‘lost generation’?! This doesn’t have to be true yet, but it is about time for the European Governments to take combined, decisive action to fight youth unemployment. If they won’t, there will be a lost generation indeed.

The problem in situations like these is that companies when they hire workers, want two kinds of workers:
  • Young workers that require little salary and that are able to learn their new jobs ‘on the job’
  •  Experienced, older workers that can start at full speed from the beginning and don’t have to learn their jobs anymore.
Companies are not pleased when jobseekers are older (30+), but don’t have any job experience or an education that can make the difference for them. When the current generation of 15-24 remains unemployed for the coming 5-10 years there IS a lost generation.

Therefore the European Governments should do a number things to prevent a lost generation from arising under the current 15-24 youngsters:
  • Start educational projects that raise the level of knowledge under the youngsters.
  • Start (subsidized) projects to train youngsters ‘on the job’, possibly in combination with extra education one or two days per week.
  • Give unemployed youngsters a small bonus when they start working in heavy or dirty hands-on jobs: in the greenhouses, factories, distribution centers, medical centers and all other companies and institutions where personnel is still scarce in spite of the bad economic times.
But what especially the south of Europe needs to do, is to develop their own industries and services organizations and become less dependent on German and Dutch imports. Their industrial and services economy needs to become more competitive to win the battle against the West-European countries. The Dutch and German export surplus is their import surplus.

Whatever you say: 40% youth unemployment is a disgrace and it is something that the Spanish and Greek governments should be ashamed about. No more blubberers’ stories, but a Marshall plan for the economy is what those countries need. And the EU should help them enabling these Marshall plans.

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