- Young job-seekers suffer most as Europe struggles
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by Natalie de Vallieres and Biodun Iginla, BBC News
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BRUSSELS -- Irene Fernandez lost her job with Spain's postal service five months ago, a victim of government spending cuts. Since then, she's been getting by on spending money from her mother and the $530 a month she earns grooming dogs for neighbors. Fernandez, 24, has had one job interview.
"This year has been the toughest," she says. "I am beginning to realize that things are going to be a lot tougher for me than for my mother's generation."
Europe's economic crisis is hitting young people like Fernandez the hardest. The youth unemployment rate is nearly 53 percent in Greece, 51.5 percent in Spain and 35 percent in Italy. In the 17 countries that use the euro currency, youth unemployment is a record 22 percent, twice the eurozone's overall unemployment rate of 11 percent, which is itself the highest since the euro was created in 1999.
The striking exception is Germany, where youth unemployment is only 7.9 percent, thanks to a vocational education system. (European economic statistics count those 15 through 24 as youths.) In the United States, youth unemployment - which covers ages 16 through 24 - was 16.5 percent last month.
Economists fear that years of unemployment could produce a European version of Japan's "Lost Generation" - the young adults who looked in vain for jobs in the 1990s and today find themselves permanently locked out of good careers. The longer young adults stay unemployed, the longer they contribute nothing to economic growth, consume government aid and increase the risk of social unrest.
Youth unemployment is almost always about twice as high as overall unemployment in Europe. Young workers are often the last hired, so they are the first to be fired. And they find it tough to break into occupations - notaries in Italy and taxi drivers in Greece, for example - where established, older workers are protected from competition by laws and regulations.
But Europe's economic malaise, which began with the financial crisis in 2008 and continues as governments grapple with excessive debt, has made things far worse. Countries have adopted austerity programs and cut government employees. Companies have announced layoffs or frozen hiring to deal with falling demand.
A collapse of housing markets has also wiped out construction jobs, many of which were held by young workers. And older workers whose finances were ravaged by the recession and financial crisis are retiring later.
As a result, successive waves of young people have graduated from high school or college with little chance of finding a job, pushing the youth unemployment rate higher each year.
The outlook is for little improvement. More than half the eurozone countries are in recession, and the overall economy will shrink by 0.3 percent this year, according to the International Monetary Fund.
Leaders of the 27 European Union countries agreed late last month on a bold plan to pump cash into Europe's troubled banks and help governments deal with their excessive debt and high borrowing costs. But the plan is likely to provide little immediate relief to Europe's youth. What they need is economic growth that produces jobs.
"That's the real urgency," says John Springford, research fellow at the Centre for European Reform.
The desperation is especially high in Europe's most troubled economies - Spain, Italy and Greece, among others - and is affecting even the well-educated.
Jacinthe Adande, 28, holds a degree in literature and languages from Paris' elite Sorbonne. Unemployed for four years, she's been unable to land a job even as a house cleaner. "They ask for your work experience," she says. She doesn't have much.
Andrea Beluffi, 19, wanted to go to work after he finished high school in Cremona, a northern Italian city famous for producing Stradivarius violins. But he took a hard look at the job market and decided to enroll in college instead.
"Let's be clear here, I am glad to go to university," he says. "However, it is the crisis that forced my decision ... I wanted to work but, at this time, whether one likes it or not, you have to study. What would I have done otherwise?"
Other European youths, unable to find jobs, also have sought sanctuary on college campuses. That is one reason the percentage of European youths who are part of the labor force - working or looking for work - dropped to 48.7 percent last year from 52.9 percent in 2000.
British researchers Paul Gregg and Emma Tominey found in a 2005 study that British men who were unemployed for at least a year sometime from age 16 through age 23 were still suffering from a "wage penalty" at age 42: They earned 13 percent to 21 percent less than they would have if they hadn't been unemployed.
Like the United States, most European countries provide unemployment benefits only to people who have worked for a minimum period, says Gary Burtless, senior fellow in economic studies at the Brookings Institution.
"These young people are more dependent on their relatives to support them in their distress," he says.
The damage is already widespread across Europe:
- ITALY
Alice Scazzoli, 23, graduated in June with a degree in languages from Bologna's state university. She's living with her parents and earns about $600 a month juggling three jobs - waiting restaurant tables, selling shoes and fabric at an open-air market and teaching English.
Fluent in Japanese, she's given up hope of earning a decent living in Italy and wants to save enough to move to Tokyo and look for work there. "Let's put it this way: The (job) possibilities were already scarce, and the crisis has eliminated even a lot of those," Scazzoli says.
Italy's unemployment rate of 10.2 percent is its highest since May 2000; for young adults, the rate is 35.2 percent.
- FRANCE
Adande has been unemployed or working odd jobs since graduating from the Sorbonne four years ago.
She dreams of starting a theater troupe. But "I don't see many opportunities in France," she says. The obstacles involved in starting a business are "very complicated ... especially if you don't have capital and don't have experience."
Adande is considering looking for work in Britain, Canada or Cameroon, where she has family. She figures she could return to France once she's acquired some experience. For now, she has moved back in with her mother in a Paris suburb.
"It makes me feel like I have failed in something," Adande says.
The unemployment rate in France is 10.2 percent; for young people, it's 22 percent. Both are the highest since 1999.
- SPAIN
For Fernandez, money is so tight she seldom uses her cell phone. She hopes to land a job selling magazines and newspapers. But if things don't improve by fall, Fernandez says she'll move in with her mother.
Another possibility: "I have some good friends who will always open their door for me. We are beginning to function like that now, through networks."
She sees young couples breaking up under the strain of a weak economy:
"When people that live together are forced to be together all the time with no money with which to do anything and with few entertainment options available, you can see relationships snapping and falling apart."
Spain's 24.3 percent unemployment rate is its highest on records dating to 1983. Youth unemployment is 51.5 percent.
- BRITAIN
Genevieve Walsh, 22, began receiving unemployment checks after graduating from college this year with a degree in politics and international relations - and $56,000 in debt.
"I was told to go to university because I'd get a good job and loads of money, whereas I've gone to university but haven't gotten a job and I owe loads of money," Walsh says. "Maybe I should have just left school at 16 and gotten an apprenticeship."
She's been applying for several jobs a week - retail, secretarial, sales, event planning, waitressing. But she feels caught in a vicious cycle: "You have to have experience to have a job. But no one is giving you experience so you can get a job."
Government job counselors have urged her to "dumb down" her resume, deemphasizing her university studies, to help land an entry-level job.
Unemployment is 8.1 percent; for young adults, it's 21.7 percent.
- GERMANY
Germany's unemployment rate is just 5.4 percent. The youth rate is 7.9 percent - lowest in Europe.
The path from school to work is easier in Germany. For young people who don't go on to college, apprenticeships combine work experience and classroom training for two or three years after high school. The system is supported by government, companies and unions.
Sandra Buchta is completing her one-year apprenticeship at a moving company in Frankfurt. She works 3 1/2 days a week and takes two mornings of instruction in areas like bookkeeping and software at a vocational school. Buchta receives a $675 monthly stipend that lets her get by while living at home. And she's likely - but not guaranteed - to get a full-time job offer from the company.
Typical for an apprentice, she's learning all aspects of the company's operations, from dispatching to bookkeeping. The training provides skills she could use anywhere in the moving industry.
That broad training is a key difference between mere on-the-job training for a single post and an apprenticeship, says Brigitte Scheuerle, who oversees training programs and the exams at Frankfurt's Chamber of Commerce and Industry.
"A worker standing on the assembly line does not just install one part," Scheuerle says. "He knows what is going on to the left and right of him."
Yet it's not clear how well Germany's model, which dates back to the Middle Ages, would transfer to other countries. It's based on extensive cooperation among government, companies and unions.
It's "an attitude of solidarity, and solidarity can't be imposed by fiat," Scheuerle says.
For now, struggles persist elsewhere in Europe. Gloria Carracedo, 24, hasn't been able to land a full-time teaching job in Spain. She plans to leave for Malta to learn English. Living there is cheaper than London.
Still, she keeps her hopes in check. "The way things are right now," she says, "I don't foresee being able to reach my parents' standard of living."
Biodun Iginla, BBC News
Monday, July 9, 2012
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