Youth in the crisis: what went wrong?
While discussions are ongoing about the different paths towards recovery from the global financial crisis, everyone agrees that figures on unemployment and specifically youth unemployment are still alarming. Even though we may have started a slow recovery process, recent projections point to either no change or to further increases in unemployment through to the end of 2015 in several European countries. Clearly, ‘the global recovery in the past 4 years has been muted and uneven’. As a result, as of July 2014, the EU unemployment rate was still at a high of 10.2% and the youth unemployment rate at 22%3. It is clear that six years on from the onset of the economic crisis, ‘both labour market and broader social conditions remain highly challenging, and the inclusive character of the possible recovery is uncertain’
For young people the situation throughout the crisis and now has been typically worse than that of the adult working population. Between 2007 and 2013, youth unemployment rates at least doubled in 12 European countries: Cyprus, Spain, Ireland, Greece, Latvia, Estonia, Lithuania, the Czech Republic, Bulgaria, Croatia, Italy and Slovenia.
Young people were already in a difficult economic situation before the crisis. Historically, the unemployment rate for those aged 15 to 24 in advanced economies has been two to three times higher than for older age groups6. Youth employment has been much more sensitive to business cycles and policy-induced economic downturns than adult employment. In Spain, for instance, half of young workers were on temporary contracts before the crisis and were thus the first to lose their jobs when redundancies started occurring.
This publication is an analysis of the consequences on youth of the financial crisis that hit in 2008 and the resultant fiscal consolidation programmes that took hold across the majority of European countries from 2009 onwards. It will examine, based on existing academic viewpoints and research, to what extent the financial crisis and answers to it affected young people- both in terms of employment but also in terms of young peoples’ wider social well-being.Whilst politicians promised outstanding measures to tackle youth unemployment, research
reveals that policy answers to the financial crisis, part of fiscal consolidation programmes, negatively affected society as a whole, and young people especially. Now, in 2014, unemployment, income inequality, poverty and social exclusion are defining characteristics of Europe’s society. The crisis and European responses to it have broadly contributed to this social situation.
As a result, such social issues must now be put at the heart of today’s economic policy debate. This publication aims at paving the way for further discussion on appropriate macroeconomic policy responses and for more coordinated and inclusive European answers to improve young people’s social situation in Europe.