- Over 5 million young people (under 25) are unemployed in the EU-28 area. What are the main reasons for these high numbers?
There are many reasons why young people have been severely affected by unemployment. First of all, there are structural problems that urgently need to be tackled. In some Member States the labour markets are highly segmented, meaning that older, established employees enjoy very good conditions of employment, while young people face difficulties in entering the labour market or in the best case find only short term contracts or a traineeship. The crisis has only exacerbated this phenomenon. On the demand side, job creation slowed down as employers waited for economic recovery before opening up new positions. On the supply side, high-school drop-outs and early school leaving have proven to be the most problematic. In addition, there is the problem of skills mismatches. Although youth unemployment is unacceptably high, here are more than 2 million vacancies in Europe that employers are having a hard time to fill in. This underlines that there is a lot of room to better align skills to labour market needs. However, we have noticed an improvement, with almost 10% less young people unemployed this year compared to last year, and are hopeful that this will continue.
– Can the goal settings of Europe 2020 be achieved?
In 2010, EU Member States set themselves ambitious targets to achieve smart, inclusive and sustainable growth across Europe by 2020. Our initial efforts were hampered by the crisis. But this does not mean we need to lower our ambitions. The experience from Member States shows that targets are attainable, if we pursue the right policies and the right reforms. Let me give some examples by looking at the target for employment. The Europe 2020 strategy target is to reach an employment rate of people aged 20 to 64 in the EU of at least 75% by 2020. This objective has been translated into national targets to better reflect the situation and possibilities of each Member State to contribute to this common goal.
Some Member States have already reached, and in fact have gone beyond, the European target. For example employment rates above 75% were recorded in Sweden (80.0%), Germany (77.7%), the United Kingdom (76.2%), the Netherlands (76.1%) and Denmark (75.9%). Other countries have still a long way to go. However, the extensive reforms implemented in recent years are now starting to pay off. Economic growth is slowly returning in Europe. Unemployment is going down. Youth unemployment decreased since March 2014 by around half a million people – about 10% of the total, a remarkable success to which the Youth Guarantee has significantly contributed. And despite the crisis, employment rates for women and older workers have gone up, thanks to the policies pushed for by the Commission and implemented by many Member States.
Are we there yet? Clearly not. This is why the Juncker Commission has promised a new start for Europe through renewed growth and jobs. To do that, we need a sound business and investment environment and structural reforms to meet the needs and expectations of our citizens and companies in a rapidly changing and globalised world.. This is essential if we are to build an economically dynamic, socially inclusive and sustainable Europe. This is our agenda to promote fairness and ensure that the dividends of growth reach everyone in Europe.
– Despite the high number of youth unemployment there is also a high amount of unfilled vacancies, is there a mismatch at the European labour market?
The combination of our investment plan and structural reforms is the backbone of our job creation policy. But we cannot only focus on improving the framework for job creation. We must also ensure that people have the necessary skills to fill in those jobs.
Today we find ourselves in a paradoxical situation. On the one hand 5 million young people are unemployed and 7.5 million are neither in education, training or employment. On the other hand there are more than 2 million vacancies and many employers report difficulties in finding people with the right skills.
The reality now in Europe is that 20% of Europeans have only basic literacy skills and 25% have only basic numeracy skills. But these kind of basic skills are expected to suffice for only about 11% of jobs in 2025.
Our education and training systems need to be in tune with the labour market’s needs. Specialist skills in science, technology, engineering and mathematics will be in high demand, as will skills such as problem-solving, communication, innovation, team-working and creativity. Entrepreneurial skills to facilitate more — and more successful — company start-ups can also foster self-employment and innovative forms of work.
Stronger investment in skills is vital for strengthening competitiveness and sustained growth. The most competitive countries in the EU, and in the world, are those where businesses invest most in skills, including by providing quality apprenticeships. Apprenticeships make it much easier for young people to transit from education and training to work, and to provide the skills that companies need in order to grow.
This is why we launched the European Alliance for Apprenticeships almost two years ago – a multi-stakeholder platform to strengthen the supply, quality and reputation of apprenticeships.
Since it was launched, the European Alliance for Apprenticeships has mobilised initiatives from Member States, social partners, chambers, business organisations, Vocational and Educational Training providers, youth organisations and others. Just this week more than 200 companies that are part of the Alliance revealed encouraging results. They created more than 50,000 education and training places in 2015; already half of what they had pledged to achieve by 2018.
On 22 June, we will organise a big event in Riga in cooperation with the Latvian Presidency where we aim to give a new boost to the European Alliance for Apprenticeships. We aim in particular to make our dialogue with the private sector even more solid.
– Countries such as Germany and Denmark have a low rate of youth unemployment, should they be considered as a model for the European countries?
One of the biggest strengths of the EU is that we can learn from each other. The exchange of good practices among EU countries is something we strongly support and it shows that there is always room to do things better. For example, strong apprenticeship traditions in countries such as Austria, Denmark, Germany and the Netherlands have proven particularly successful in easing the school to work transition. Apprenticeships combine vocational education and training (VET) in school and in a company and lead to a nationally recognised qualification. They have been shown to significantly improve young people’s chances of finding a job.
At EU level, the European Alliance for Apprenticeships (EAfA) aims to increase the quality, supply and attractiveness of apprenticeships across Europe and to change mind-sets towards this type of learning.
– There are already different initiatives- are there more to come?
Yes, the Commission plans a package of measures to support Member States in getting people, especially the longer term unemployed and younger people, into work and developing a skilled workforce.
The Commission proposed to speed up the implementation of the Youth Employment Initiative, to enable Member States to fully use its potential. Just last week we wired almost €1 billion to the Member States to help them implement youth employment measures on the ground. By increasing the advance payments to Member States, we are accelerating immediate support for up to 650,000 young people in 2015.
To support long-term unemployed, the Commission will soon table a concrete proposal to promote their integration and employability in the labour market. A main objective of the proposal will be to foster an approach where activation goes hand in hand with integrated, high-quality social services.
At the same time, we are working on a skills agenda to equip people in Europe with the right skills and to help them enter and move up in the labour market. To this end, I am working together with the economic actors to strengthen work-based learning.
– What is your message, advice to the young people?
Don’t give up hope. Every young unemployed person remains one too many, but we are seeing an encouraging decline in unemployment since we launched our initiatives to help young people into jobs. I’m doing everything I can to ensure that the right training, the right skills and the right support can be given to youngsters to get them ready for a job. We are working to change the structures that caused the current problem, and we are doing everything possible to change the situation. This implies determined action at national and EU level. The launch of the €315 billion Investment Plan for Europe and the new boost given to the Youth Employment Initiative by paying out 1 billion euro just a few days ago are exemplary of this new approach. Through our Youth Guarantee, Member States are engaging in bold structural reforms, reaching out to those furthest from the labour market. This is the course I want to stay.