Europe and Its Young at Drift

Look at these unemployment rates for young Europeans in 2012:

Country 2012 Hungary 28.1
Greece 55.3 Cyprus 27.8
Spain 53.2 Poland 26.5
Croatia 43.0 Lithuania 26.4
Portugal 37.7 France 24.3
Italy 35.3 Sweden 23.7
Slovakia 34.0 Romania 22.7
Ireland 30.4 United Kingdom 21.0
Latvia 28.4 Estonia 20.9
Bulgaria 28.1 Slovenia 20.6

Now look at these long-term trends (averages per decade) for youth unemployment in the worst-hit European countries:

80s 90s 2000s
Belgium 18.76 20.52 20.46
Ireland 22.65 14.35 16.82
Greece 30.83
Spain 30.4
France 17.27 20.85 21.74
Italy 27.85 27.37 25.19
Luxembourg 5.24 6.92 15.74
Portugal 15.27 13.45 23.75
Sweden 6.89 17.45 21.76
United Kingdom 15.24 13.95 16.12

It is not very hard to figure out where these numbers come from. Europe has been on a long-term path to slow growth and economic stagnation. The Great Recession wiped away a thin layer of economic activity that superficially gave the impression of a solidly performing European economy. Now that the Potemkin facade has fallen off, the next question is: what kind of damage does high youth unemployment do to a country?

To answer that question, let us go all the way back to 2004 and an article in the British daily newspaper The Guardian:

For most people, the suggestion that a sizeable number of British teenagers has a neet problem will prompt images of strong hair lotions and fine-tooth combs. A Japanese team of researchers that came over to Sheffield recently knows different, because their nation has neets too. The number of young Japanese not in education, employment or training – the neets – is now [ in 2004] an estimated 600,000. The scale of Britain’s neet phenomenon is difficult to gauge. Bridging the Gap, a report by the Social Exclusion Unit five years ago, found that “at any one time, 161,000, or 9%, of the age group [16-19] are outside of education, training and work for long periods after the school-leaving age of 16”.

In 2004 Britain’s youth unemployment was at 12.1 percent, a historically low number for that country. So how is this number associated with the NEET problem? A researcher on the delegation to Britain explains the situation they faced in Japan a couple of years out of the Millennium recession:

“Until 1997 or 1998 there were no neets, but in the last few years many young people have become too wealthy to have to work – there is no need, no urgency. It is a rich country’s problem.” The neet group in Britain, on the other hand, tends to be from the lower socio-economic groups, says Dr Liza Catan, who directed Youth, Citizenship and Social Change, the largest research programme into young people’s lives yet undertaken in the UK … Though the causes are different, there is no doubt that the symptoms can be similarly worrying and damaging.

Before the recent spike in youth unemployment in many corners of Europe, the phenomenon of unemployment among the young was apparently different in character. The Guardian again:

… but what about a related and slightly longer-standing problem among young Japanese: the “freeters”? (The word was concocted by combining the English word “free” with the German word for worker, “arbeiter”.) This term was coined in the late 1980s, during Japan’s bubble economy. It referred to young people who deliberately chose not to engage in regular work, despite the large number of jobs available at that time. It came to include people aged between 15 and 34 who do not make use of their qualifications to embark on careers, but remain only casually involved with the labour market in a series of temporary jobs, usually in the sales and service sector. Freeters often intend to have a steady job one day. According to government statistics, there are more than 4 million freeters. They are not necessarily from deprived backgrounds, and increasing numbers are high-school and university graduates. The Japanese Institute for Education Policy Research identifies three main groups of freeters: “Those who desire freedom and ease – the tarrying type; those who attach importance to doing what they want to do – the dream-chasing type; and those who cannot find their desired regular employment – the no-choice type”.

These are all examples of people who can ostensibly make enough money on casual employment to get by, pay their daily expenses and afford themselves the physical and social freedom that comes with non-regular employment. But this is not the situation in an economy where one in four, one in three or even a majority of young people cannot even find a job if they want to.

In other words, the Japanese “freeter” is the face of youth unemployment when the economy is doing well; the question is what happens when the “freeter” decides that he wants a job, or is forced by higher cost of living to look for a job, but cannot find one.

Obviously he will be joined by large groups of non-freeters, whose sole desire from the get-go is a steady job, and for each new class that graduates high school or college into a bad economy the pool of unemployed young changes character. It gradually becomes dominated by those who would never slack like freeters but want the regular type of life, like their parents had.

A more formal approach to the youth unemployment problem with reference to disenfranchisement from society and the economy, is taken by the International Labor Organization in a new report called Global Employment Trends for Youth. The report begins by pointing to the alarming trend in youth unemployment:

Since 2009, little progress has been made in reducing youth unemployment in the Developed Economies and European Union as a whole. The youth unemployment rate in 2012 is estimated at 18.1 per cent, the same rate as in 2010 and the highest level in this region in the past two decades. If the 3.1 per cent discouragement rate is taken into account, the discouragement‐adjusted youth unemployment rate becomes 21.2 per cent. The youth unemployment rate is projected to remain above 17 per cent until 2015, and decrease to 15.9 per cent by 2018.

We’ll see about that forecast. There is a slow but steady downward trend in the United States, where youth unemployment has fallen from over 17 percent to below 16 percent in the last two years. But not only is that a very slow recovery, it is also a marked difference compared to Europe where unemployment generally is stable or rising.

The difference between the United States and Europe makes life a lot tougher for Europe’s young, who involuntarily are pushed into a NEET lifestyle.

Here is an important observation by the ILO report:

The youth unemployment crisis in advanced economies is also reflected in longer job search periods and lower job quality. In the majority of OECD countries, one‐third or more of young jobseekers are unemployed for at least 6 months. In Europe, an increasing proportion of employed youth are involved in non‐standard jobs, including temporary employment and part‐time work, and evidence shows that a significant part of the increase is involuntary rather than by choice. Youth part‐time employment as a share of total youth employment in Europe was 25.0 per cent in 2011. Another 40.5 per cent of employed youth in the region worked on temporary contracts.

This means that in some countries practically every person 25 or younger is only casually attached to the labor market. Their opportunities to support themselves are slim to non-existent, which means they do not build the same kind of loyalty relations to the society they are going to inherit as their parents did.

Which brings us back to the NEET’ers. Young people who are not in education, not in employment and not in job training build no crucial economic ties to the rest of society – except for what they receive in the form of welfare or unemployment benefits. When government cuts those benefits and the involuntary NEET’ers have nowhere else to go, they eventually become social dynamite.

Even if young unemployed, non-student Europeans are not going to start a violent revolution, the longer they go unemployed and unattached to the economy they will drift away from it. They feel no loyalty to do their fair share in growing, or even preserving the prosperity that is withering away in the Old World. A similar disconnect relates to parliamentary democracy.

It is difficult to say at this point what the actual consequences will be of this growing lack of loyalty ties between the young and the society they live in. We do now one thing, though: a society of fragmented individuals is a society in decline.

One comment

  1. Pingback: EU: Titanic Without A Captain | The Liberty Bullhorn