Youth Guarantee: Europe Needs More Investment In Its Young People

The European Commission’s decision to maintain the Youth Guarantee, the scheme launched in 2013 to offer every young person a place of education, training or employment within four months of leaving formal education or being out of work, is going in the right direction but too slowly.

The Youth Guarantee (YG) needs more funding to scale it up, better implementation to ensure high quality job and training offers, and stronger liaison with social partners, especially trade unions. The European Trade Union Confederation was alarmed to learn that out of the €6.4 billion originally invested in the Youth Employment Initiative (YEI), one third has not been spent, and, according to estimates, the YG has reached only about 40% of its target group. The Commission admits that programmes started too slowly. And take-up and impact vary enormously between Member States.

In June, the ETUC demanded “a strong partnership approach”, to involve trade unions in the development of national YG measures. According to EU Employment Commissioner Marianne Thyssen, effective partnerships are “the strongest factors of success”, but stakeholders have been left out and consultation with unions has been the exception, not the rule.

The Commission’s meagre offer of an extra €1bn for 2017-2020, supplemented by €1bn from European Social Funds, is inadequate. According to the International Labour Organization, an effective long-term response to youth unemployment in Europe would require an investment of €21bn a year. If that seems unaffordable, just compare the cost of not acting, estimated by Eurofound as a loss to European society of €153bn in a single year, or 1.2% of EU GDP.

From a peak of 24.4% in 2013, the EU youth unemployment rate fell to 18.9% in mid-2016. The Commission celebrates the claim that over the last three years, 14 million young people have entered national YG schemes, with 1.4m fewer young unemployed and 900,000 fewer young people not in employment, education or training (NEETs). But wait: if there are still 18.9% of young people without work, and thus unable to fulfil their professional and social potential, is that the best Europe can do?

Commission President Jean-Claude Juncker in his State of the Union address declared that in three years the YG has brought 9m young people into work, training or an apprenticeship. But unions report that too many of these offers are short-term or unpaid internships or precarious jobs providing no security or career development. Only a few Member States have set quality criteria, and these are urgently needed. Underemployment is growing, together with bogus self-employment, zero-hours and fixed-term contracts; in countries such as Greece and the Netherlands young people are excluded from minimum wage legislation. YG schemes should be backed up by good social protection and social benefits to prevent poverty and social exclusion.

In many countries the Guarantee has been tacked onto a range of existing measures, making for uneven implementation and assessment. The commitment from employers is described by the Commission as “rather limited”, even though the Framework of Actions on Youth Employment, adopted in June 2013 by the ETUC and employers’ organisations BusinessEurope, UEAPME and CEEP, commits the parties to support the YG. They cannot complain about ‘skills mismatches’ while failing to make an effort to hire and train young people. Employer involvement is vital to matching young people’s skills to labour market vacancies.

Helping NEETs should remain a YG priority. The NEET rate has fallen by just 1.2% since 2012, and remains well above the pre-crisis 2008 level of 10.9%. Only 57% of NEETs are registered with public employment services – a key access point to the YG – and young women are especially vulnerable. NEET populations vary greatly in different Member States. All this requires complex policy responses tailored to specific needs.

Our findings are backed up by the European Policy Centre. In a report published in September, it compared YG schemes in five different EU regions in Belgium, Slovakia, Italy and the UK. It found “undeniable weaknesses”, including “insufficient efforts to reach out to the non-registered NEETs”, and urged more support for the most vulnerable such as young migrants.

There is no “magic formula” for integrating young people into the labour market overnight. The YG alone cannot solve the whole problem of youth unemployment in Europe. But with the objective of guaranteeing every young European the right to guidance when becoming unemployed or entering the labour market, the EU should play its part in fighting unemployment. This requires time, commitment and genuine investment in Europe’s future: exactly what the Youth Guarantee needs too.