Europe's Lost Generation: Unemployment Crisis Deepens

Strategic Insights -

Concerns about Europe's younger generation reached a critical point in 2012, with the European financial crisis resulting in nearly 19 million people out of work across the eurozone. The hardest hit were those under 25, with a staggering 24% of young Europeans jobless. As the continent's youth struggle to find employment, analysts warn of a ticking time bomb, with the longer they stay jobless, the more opportunities they lose to improve their skills.

Key Takeaways:

  • In Spain and Greece, overall unemployment stands at around 25%, with young people facing an unemployment rate of over 60%.
  • The major cause of unemployment is the three years of recession, worsened by German-dictated austerity measures and rigid labor markets.
  • The southern European welfare model, which favors older workers, has led to a bleak mood across the region, with young people having no sense of future.
  • In Italy, there's a sense of fatalism, while in Spain and Greece, protests have been loud due to the rapid decline from boom to bust.
  • Lawmakers in these countries are unlikely to implement relief or reform measures for youth unemployment, unless there's a sudden shift towards economic growth.
  • The ripple effect of unemployment will continue, with the best-educated young seeking jobs in the more prosperous north, where 500,000 southern Europeans have already arrived this year.
  • Analysts warn that youth unemployment risks having a wider impact on southern European economies, which could fall behind even further once older workers retire.
  • Ireland, also affected by a debt crisis, has seen a significant number of young people emigrate, with 1,600 people leaving every week, and concerns about long-term damage to the economy and society.
  • Germany's economy, however, is a different story, with low unemployment rates (around 5.5%) and a strong apprenticeship system preparing young people for the workforce.
  • The European Union is urging other countries to follow Germany's example, enabling young people to transition from school to work, training, or further education.

Statistics:

  • Nearly 19 million people are out of work across the eurozone (Eurozone unemployment rates, 2012)
  • 24% of young Europeans are jobless (European Commission, 2012)
  • 60% of young people in Greece and Spain are unemployed (NPR, 2012)
  • 25% overall unemployment rate in Greece and Spain (NPR, 2012)
  • 5.5% unemployment rate in Germany (NPR, 2012)
  • 500,000 southern Europeans have arrived in Germany this year (NPR, 2012)
  • 1,600 people emigrate from Ireland every week (NPR, 2012)

Sources:

  • NPR News, "ALL THINGS CONSIDERED", December 2012
  • European Commission, "Eurozone unemployment rates", 2012
  • NPR, "European youth unemployment crisis deepens", 2012