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Monday, 9 September 2013

Ernst’s Economy in discussion at BNR Newsroom: Pieter Gautier and Hans de Boer on the labour market and youth unemployment

Last Monday, 2 September 2013, was the start of a new season of BNR Newsroom, the semi-live discussion program at BNR News Radio and Ernst’s Economy for You was again present there.

Just like last season, the weekly radio show has a topical financial/economic subject, while the guests are renowned experts and politicians, who deal with the subject on a daily basis. It is recorded for a live studio audience, which is strongly invited to interact in the discussions. Again, the program is presented by my good friend Paul van Liempt, who was yet again in top shape during the recording session last Monday. 

Paul van Liempt of BNR News Radio
Picture copyright of: Ernst Labruyère
Click to enlarge
This week’s topic was the Dutch labour market and the soaring youth unemployment in The Netherlands. Among the guests were a successful Dutch entrepreneur, two members of Dutch parliament for the PvdA-labour party and the liberal-conservative VVD, and the chairwoman of the Dutch freelancer’s union. In the second half of the program, these guests all spoke about the Dutch labour market and the role of the government and special interest organizations in spurring employment in The Netherlands.

However, according to me the most important and interesting subjects were discussed in the first half of the program, where the guests were:
  • Pieter Gautier, professor in macro and labour economy at the Vrije Universiteit in Amsterdam;
  • Hans de Boer, former chairman of the Task Force Youth Unemployment, which battled the Dutch youth unemployment between 2006 and 2008. 
This is the reason that I only represent the highlights of their discussion with Paul van Liempt in this article. 

Nevertheless, I invite everybody who masters Dutch to click at the aforementioned link, where the whole broadcast can be heard. 

Or even better, visit one of the coming broadcasts of BNR Newsroom on Monday, as there is always a topic that is worth your while and with interesting guests who have really something to say about it.

Pieter Gautier

‘There are currently 9% unemployed people in The Netherlands, at least according to the Dutch standards’. 

[According to international standards, the Dutch unemployment is 7% - EL].

Professor Pieter Gautier of the
Vrije Universiteit Amsterdam
Picture copyright of: Ernst Labruyère
Click to enlarge
This is a worrisome number. If you still have a job, but receive a few percents less salary, you probably go through the crisis without a frown. However, when you are unemployed, you really feel the crisis. 

I expect the unemployment to further increase a little. The unemployment wave started quite late in The Netherlands, as a consequence of the Part-time Unemployment Benefit policy and the stringent Dutch labour protection’.

[Another cause for the very late increase of Dutch unemployment was the initial reluctancy of Dutch companies to fire personnel, as companies thought they might need their personnel again after the crisis would be over – EL].

‘Later on, companies realized that the crisis would last much longer than earlier expected and they started to fire people by the masses. At the same time many companies were reluctant to hire new personnel, even if they had jobs available. The companies were too afraid that it might be very hard to fire these people again from a legal point-of-view, when the financial position of the company required this.

People who should worry about their jobs, are people who do routine work, which can be automated or robotized quite easily. These are jobs like factory-worker, secretary or office employee with highly predictable and repeatable work. People with a flexible attitude, who can deal with uncertainty and easily find their way in other jobs, remain important for their companies. Hopefully, these people will not turn into ‘yes-men’ and ‘bootlickers’, as such an attitude among personnel will definitely deteriorate the quality of their companies.

Many jobs emerged in times, when people were virtually assured that their job would last for twenty or thirty years in a row. Nowadays, almost nothing is left of these ‘jobs-for-life’. For many people this has been a true transition. People need skills to handle this uncertainty properly.

The ICT industry will be the source of many new jobs. At companies, like Amazon and Google, the automation and robotization of jobs continues. And also the classic doctor or surgeon will be partially replaced by computers and robots, which already can do a substantial part of the medical examinations and in the future much, much more. To create these intelligent computer systems and robots, many highly-educated and skilled technicians must be involved. Consequently, lots of new jobs will emerge in this industry.

And there will always be jobs, that are too hard to do for computers and robots. That can be basic jobs, which require certain skills, but not necessarily high education. Unfortunately, these are not the best rewarded jobs.

Hans de Boer

Paul van Liempt: ‘Nowadays, there is 17% youth unemployment. In 2008, when the Task Force Youth Unemployment stopped, it seemed that youth unemployment was a non-issue. What went wrong?’

Hans: ‘To be honest: nothing! In 2008, the unemployed youth was gone. At that moment, we didn’t see the credit crisis come. For the whole world, it seemed like a strike of lightning’.

Hans de Boer - former chairman of the
Task Force Youth Unemployment
Picture copyright of: Ernst Labruyère
Click to enlarge
[This is always the standard reaction of people and officials, who really didn’t see the credit crisis come and missed all the warning signals in the years before the demise of Lehman Brothers. Regular listeners of Kees de Kort at BNR and regular readers of or know much better – EL]

‘When we discontinued the Task Force in 2008, we left recommendations for the government. The most important recommendation was about ‘vocational education’. We recommended to focus upon the intermediate-level vocational education. That is where the jobs are.

We were talking about jobs like:
  • Personal care and healthcare jobs. These jobs require people, who are good at their job, but also good in the intercourse with other people;
  • Engineering and technical jobs: there are litterally hundreds of thousands of jobs in engineering.
At this very moment, the company 'IHC Shipyards' gets a massive order, which requires at least 500 extra engineers and technicians. Unfortunately, these technicians (welders, metal sheet workers etc.) need to be acquired in Poland and Romania, because in The Netherlands we don’t have enough technicians with a solid, intermediate-level education and sufficient hands-on experience.

Already in 2008, we stated that there should be an intervention in the intermediate-level vocational education. More people should have been educated for jobs as technicians, engineers and healthcare professionals. Consequently, these people would have been available for the labour market with the right set of skills.

Unfortunately, in spite of much talking and a lot of covenants and agreements, too little happened actually. This is The Netherlands’ major problem: yet too many people leave school with a diploma that is worth sh*t’.

Ernst: ‘Should the 2012 government agreement not have given much more attention to the manufacturing industry? Like what happened in countries as Austria and Germany, which seem to be much more crisis-resilient than The Netherlands?!’

Hans: ‘It is always the question whether writing it down in a government agreement really helps. In the agricultural and manufacturing industry, some Dutch companies are truly world-leaders. We should be proud about that. From the Agricultural University in Wageningen there are dozens of spin-offs, which create massive amounts of new jobs.

Food safety will be THE issue of the future. Transparant food chains: this is something were The Netherlands is traditionally strong.

Unfortunately, at a national level, politicians and officials talk about the economy in global terms. Consequently, when real, tangible projects emerge, these will be immediately decentralised to municipalities and industrial sectors. That is a real shame.

Focus points in the economy and the labour market (f.i. youth unemployment or the agricultural industry) should be adopted by a minister, who would puts his energy in it for the full four years of his stint. At the end of these four years, a problem has been solved or an industrial sector has improved strongly.

However, that is not how ‘we’ – the government and parliament - do that: a genuine Dutch disease!

We just talk about it and deploy an execution structure, preferably without a responsibility of our own. We lay the project down at municipalities, industrial sectors and (independent) institutes; all parties which have very little legitimacy. In other words: the central government is managing The Netherlands from a piece of paper'.

Ernst: ‘Another problem is, that there are still ample jobs available at labour-intensive industries, but that these companies can’t get Dutch youngsters to do these often heavy  and dirty jobs. I’m thinking f.i. about jobs in the agricultural industry, the dairy industry, industrial washing/cleaning companies, the heavy industry and manufacturing companies. How can we solve this?’

Hans: 'In The Netherlands there is the situation that people cannot handle their own education level anymore. Everybody needs to re-educate and train, train, train himself and everybody wants to become manager. When you acquire a large project for 500 new jobs, like IHC Shipyards did, you can’t find the people for the jobs anymore.

This would be a good subject for scientific research: what are the yields for society of all these re-education and training programs? If there is a core of well-trained technicians and engineers and healthcare professionals in your country, who all received an intermediate-level education, than you have the core of your society and economy well-organized. This is my firm opinion'.

This is something where I totally agree with Hans de Boer. There are just too many chiefs and too few indians in The Netherlands, when it comes to hands-on jobs in important industries, like healthcare and manufacturing. 

Nowadays, we either train people towards a management position or we scare people away from intermediate-level vocational schools, who have difficulties in learning too much theoretical knowledge, but do have very good hands-on abilities.

Instead, we should cherish these technical masters and train them the right way to get the technicians and engineers that this country needs. 

And we should not forget: no country or company can be run with managers alone.

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