Conference “INVESTING IN OUR YOUTH: EDUCATION IS KEY”
Klagenfurt, Austria, 31 March – 1 April 2014
Speech by Ms Barbara Toce Mayor of Pedaso (Italy),
Rapporteur on local and regional responses to the economic crisis, Congress of Local and Regional Authorities Council of Europe
“Youth education and employment: Italian local experiences”
Ladies and Gentlemen,
Against the background of the economic and financial crisis, youth unemployment in Europe has become a major issue, threatening the future of democracy. Across the European Union, a quarter of young people under 25 in the labour market are unemployed, the highest level in any world region except the Middle East and North Africa. Across most of Europe, youth unemployment has risen significantly since the financial crisis hit in 2008, and is more than 50 per cent in Greece and Spain.
Around 5.6 million young people have no job, and a total of 7.5 million are neither being educated nor employed. Although the current economic crisis has caused unemployment amongst all generations, young people between 15 and 24 years of age have suffered a disproportionate share of job losses. Some young people who have left education do not even appear in labour market statistics, the so-called NEETs (neither in education nor in employment or training). ILO data show that long-term unemployment (permanent unemployment for at least 12 months) has also increased significantly in most European countries since 2008 and that young people are more affected than older people. In my home country of Italy, for example, young people are 3.5 times more likely to be unemployed for at least one year compared to adults.
Moreover, while young people are eager to work, more than half of those without jobs say they simply cannot find one. At the same time, businesses across Europe insist they struggle to find young people with the skills they need, which reveals a deeper, systemic problem of disconnect between the competences acquired through education and the actual needs of employers.
One reason of the current situation is that the labour market has changed radically, it has lost flexibility, jobs are being lost and demands for ever higher qualifications are being made, all of which make integration into the labour market increasingly difficult for young people. On the individual level, it is first and foremost a lack of education degrees or the low education level of a minority of young people that lead to difficulties. The opportunity to gain access to stable employment is considerably reduced for young people with low qualifications or without any education degree; but it has become difficult even for an increasing number of highly qualified young people.
Education and training have gained importance in today’s knowledge-based economy. The globalised economy requires a high-skilled work force which can continuously adapt to the labour market through lifelong learning. This trend is reflected by the growing number of young people enrolled in tertiary education or holding higher education degrees, a percentage which has never been higher, and the increase in numbers of young people completing secondary education. This shows that European youth are prepared to meet the challenges of the globalised labour markets and are ready and willing to invest in good education and qualifications to ensure a smooth education-to-employment path.
In modern societies, integration into the labour market is indeed one of the key development tasks on a young person’s way to autonomy and independence. For young people, taking up gainful employment is considered to be a crucial step in their personal development and in forming their identity. It is an important basis for securing one’s livelihood, participating and positioning oneself in society.
However, youth transitions to work and adult life have become more difficult today: it takes longer to establish independent households; many young people even in their twenties are economically reliant on their families and their social networks. These failing transitions with repeated phases of unemployment lead in many cases to a decrease in motivation, aspirations and in the hope for a better future. Furthermore, the longer young people are unemployed, the more difficult it becomes to gain a foothold in the job market. Young people thus become at serious risk of social exclusion and poverty.
In times of economic crisis, when the job offers decline and qualification requirements remain high, access to the job market becomes increasingly difficult especially for young people who lack general or vocational education. Although a high level of education does not protect against unemployment, it is considered a key requirement for a successful entry to the labour market. People with lower secondary education qualifications are nearly 3 times more at risk of unemployment than people with higher education qualifications. Learning and knowledge, however, are not always recognised with formal certificates, this is the case with competences gained through non-formal education. The knowledge and skills acquired through non-formal learning are obviously important in the fight against youth unemployment, and must, as such, be recognised.
At the same time, even high qualifications are no longer a guarantee for finding work, and do not automatically lead to an easier and more secure integration into the labour market. Access to the job market is also difficult for young people holding higher education degrees, and an increasing number of highly educated young people has been hit by severe unemployment.
Another important factor affecting the transition into the labour market is a change in the recruitment policy for many companies, which reduce the number of permanent job contracts and replace them with fixed-term contracts. As a result, young people today often enter the job market on fixed-term contracts or temporary agency work. In addition, statistics do not reveal the proportion of young people employed in insecure or precarious jobs. Non-standard work forms have increased over the past decades. In many cases, young people with diplomas start their professional career with one or several internships, some of which are remunerated, others not at all. Many non-standard jobs pay on average less than standard jobs and as young people often start their careers with low-paid jobs, they face the highest risk of in-work poverty.
Furthermore, young people are concerned to a much higher degree by such unstable and temporary employment than the older workforces. This high offer of non-standard jobs can be a double-edged sword. On the one hand, more flexible arrangements may facilitate the entry of young people into the labour market. On the other, these arrangements can lead to persistent unemployment as well as to social and financial insecurity. During economic recession, those on fixed-term contracts are the first to go. Young employees are doubly affected as, being the last in, they are usually the first to be fired. Young people are thus faced with the paradoxical situation: although they are on average better qualified than older employees, their chances of securing a position corresponding to their qualifications have lowered compared to earlier generations.
Ladies and Gentlemen,
Bearing in mind the severity of the current situation, the Council of Europe Congress of Local and Regional Authorities has been systematically addressing the question of youth employment and education in its resolutions addressed to local and regional councils and administrations, as well as in recommendations addressed to national governments. The Congress President, Mr van Staa, has already referred to some of them earlier today.
Most recently, last October, in our resolution on local and regional responses to the economic crisis, we called for more targeted education for young people – in particular in digital skills – and better links between vocational education and future employers, including training through apprenticeships. In our resolution on the better access of migrants to regional labour markets, also adopted in October, we called for measures to make easier the evaluation and recognition of foreign qualifications and skills, and for better designed training for migrants, including language training. Only last week, the Congress debated a report on empowering young Roma, and again put the emphasis on their access to education in the adopted resolution and recommendation.
In its earlier texts, on engaging young people in democracy, the Congress emphasised the need for work-based training for young people after compulsory education, so that they can develop skills adapted to the labour market. A good practice in this regard is, for example, the “September Guarantee” process in the United Kingdom. The Congress also called for the recognition of competences made in non-formal educational settings, and encouraged local and regional authorities to support local businesses which offer on-the-job training or work experience aimed at developing work skills and increasing the employability of young people.
Last but not least, we stressed the need for paying special attention to youth enterprises and self-employment of young people – in particular, by supporting youth entrepreneurship through adequate funding and access to business incubators, and by integrating entrepreneurship into school curricula and training programmes.
These Congress recommendations echoed proposals that had been adopted by the Parliamentary Assembly in 2011, in its resolution on reversing the sharp decline in youth employment. The Assembly pointed out exactly the lack of interaction between employers, education providers and young people that recent studies have identified as a major problem in Europe today.
The Assembly resolution speaks of the need to strengthen links between educational institutions and businesses, in order to match better the qualifications of young people and labour market needs, and to enhance educational guidance, skills development, career advice and employability training.
In this regard, I would like to refer to the two studies mentioned by President van Staa in his opening statement: “Education to Employment: Designing a System that Works” and “Education to employment: Getting Europe’s youth into work”, both prepared by McKinsey in 2012 and 2014, respectively.
These studies show that the lack of availability of jobs in Europe is only part of the problem, because in many countries the number of people employed has actually remained the same or even increased. There are other factors at play. One is rigid labour-market regulations that discourage hiring and firing, which makes it even harder for young people to get started. Another factor is more participation across all age groups, which means more competition for open positions, and higher retirement age. This particularly affects younger people, who are disadvantaged by lack of proven experience.
However, the most important part of the problem is skills shortages, in particular a shortage of soft skills such as spoken communication and work ethic, reported by employers across Europe. One-third of the surveyed employers said that lack of skills is causing major business problems, in the form of cost, quality or time, and the greatest such problems were reported in the countries with the highest youth unemployment. The studies show that a critical reason for youth not getting the needed skills is that education providers, young people, and employers do not understand one another and continue to operate in “parallel universes”. With few exceptions, only half of European employers are interacting with education providers on a regular basis, several times a year or more.
Another significant barrier for education-to-employment is the cost of living while studying, which is too high to sustain for students. Also, in a number of countries, non-academic, vocational courses are not subsidized and can therefore be prohibitively expensive. Students also lack information: less than 25 percent said they received sufficient information on postsecondary courses and careers to guide their decisions. Many lack access to career-support services at their postsecondary institution. Finally, there is also a perceived social bias against vocational education.
These problems point to a certain number of approached that could be considered as part of solution. It is clear that employers should build closer links and develop partnerships with education providers, and that they should invest more in providing on-the-job training for new hires. Employers and education providers should also work closely to design curricula that fit business needs; employers may even participate in teaching, by providing instructors. They might also consider increasing the availability of work placements and opportunities for practical learning. Employers can also promise jobs to young people (following a rigorous recruitment process) and then assume responsibility for part or all of their education costs in return for the opportunity to select the most successful graduates, trained with the most relevant skills they need.
Education providers should focus more on what happens to students after they leave school. To improve student prospects, education providers could work more closely with employers to make sure they are offering courses that really help young people prepare for the workplace.
A more comprehensive labour-market information platform should be developed across Europe, incorporating the most relevant data to capture employment trends in each sector and region. Public authorities at all level should develop information-sharing on relevant practices to match labour-market demand and supply. Educational and labour mobility should be improved by making vocational qualifications transferable across borders.
To improve financing, governments and private financial institutions can offer low-interest loans to students pursuing courses that have a strong employment record. They can also explore initiatives that allow young people to repay loans in the form of services, such as tutoring younger students.
For their part, young people need to begin to think more strategically about their future and the education-to-employment process. Students need more and better-quality information about different career paths, and need to be motivated to use it.