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The Warsaw Voice » Law » December 21, 2012
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Tackling Youth Unemployment
December 21, 2012   
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The European Commission has unveiled plans to help EU member states tackle “unacceptable” levels of youth unemployment and social exclusion by offering young people jobs, education and training.

“High youth unemployment has dramatic consequences for our economies, our societies and above all for young people. This is why we have to invest in Europe’s young people now,” said European Commissioner for Employment, Social Affairs and Inclusion László Andor. “This package would help member states ensure young people’s successful transition into work. The costs of not doing so would be catastrophic.”

As requested by the European Council and the European Parliament, the Commission’s Youth Employment Package includes a proposed recommendation to member states on introducing the Youth Guarantee to ensure that all young people up to age 25 receive a quality offer of a job, continued education, an apprenticeship or a traineeship within four months of leaving formal education or becoming unemployed.

The Youth Guarantee’s main objective is to ensure smoother transitions from school to work and requires that all concerned stakeholders engage in strong partnerships to deliver such schemes. The Youth Guarantee aims to reduce the current number of so-called NEETs (not in employment, education or training) and prevent more young people from falling into this category.

The comprehensive Youth Guarantee project designed by Finland is a good example of this. A first evaluation recently published by Eurofund shows that 83.5 percent of young job seekers received a successful intervention within three months of registering as unemployed in 2011. The Finnish youth guarantee notably accelerated the pace at which personalized plans were drawn up, and resulted in a reduction in unemployment (leading either to employment or further training).

Eurofund also says that in a “job guarantee scheme” in Sweden, 68 percent of all participants below the age of 25 had some sort of employment 90 days after they completed a New-Start-Job, indicating that the reform is an effective door-opener into the labor market.

The proposed recommendation urges member states to establish strong partnerships with stakeholders, ensure early intervention by employment services and other partners supporting young people, take supportive measures to enable labor integration, make full use of the European Social Fund and other structural funds to that end, assess and continuously improve the Youth Guarantee schemes and implement the schemes rapidly.

The Commission will support member states through EU funding, by promoting exchanges of good practice among them, monitoring the implementation of Youth Guarantees in the European Semester exercise and awareness-raising.

Young people are those most at risk in the European labor market, and increasingly run the risk of being marginalized. This fact has immediate consequences, but also medium- and long-term implications. The deepening labor market crisis can scar a large part of an entire young generation, damaging employment, productivity and social cohesion now and in the future, according to the European Commission.

Some 5.5 million young people on the labor market (more than one in five) cannot find a job, and 7.5 million young people aged 15-24 are NEETs. The economic cost of not integrating young people into labor market has been estimated by Eurofund at over 150 billion euros per year, or 1.2 percent of the EU’s GDP. Some countries, such as Bulgaria, Cyprus, Greece, Hungary, Ireland, Italy, Latvia and Poland, are paying 2 percent or more of their GDP. Avoiding these economic costs now and in the future outweighs by far the fiscal costs of the proposed Youth Guarantee.

The youth unemployment rate has reached more than 25 percent in 13 member states, with Greece and Spain experiencing rates of over 55 percent and Italy, Portugal, Ireland, Bulgaria, Cyprus, Latvia, Hungary and Slovakia with rates around or above 30 percent. More than 30 percent of unemployed people under 25 have been unemployed for more than 12 months—1.6 million in 2011, compared to 0.9 million in 2008.

Commissioner Andor presented the proposed Recommendation to the EU’s Council of Employment and Social Affairs Ministers on Dec. 6, 2012. Negotiations in the Council working group started immediately with a view to having the proposal adopted by the Council Feb. 28. The Commission will urge members states to implement the Youth Guarantee as soon as possible, preferably from the start of the 2014-2020 Multiannual Financial Framework.
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