The labour imbalance

The Economist calls them “Generation Jobless”. They are young people aged 15 to 24 of whom 290 million worldwide are neither working nor studying. That’s almost a quarter of the planet’s youth who are considered “inactive”.

Across Europe, as in Flanders, the euro crisis has hit young job seekers exceptionally hard. The continent’s average youth unemployment rate sits at 23.5%. Not surprisingly, unemployment rates are highest in Greece (58.4%), Spain (55.7%), Portugal (38%) and Italy (38%).

In Belgium, 22.4% of those under 25 are unemployed – an 11.5% increase from last year.

Yet despite these staggering figures, Flemish youth with higher-education diplomas score extremely well finding a first job, according to a recent report on job-seeking graduates presented by Flemish minister for work Philippe Muyters.

According to the report, 88.7% of Flemish graduates found a job within one year of leaving school. That puts Flanders at the top of the rankings compared to the rest of Europe.

“The average youth unemployment rate across Europe is more than 22%,” says Muyters. “Of course that also includes those no longer considered graduates, but these Eurostat numbers still put us at the top.”

But Muyters also thinks that there is room for improvement. “While all education will lead to employment opportunities, our report clearly shows that certain qualifications offer more and others fewer employment perspectives. Those who have only a secondary school diploma, for example, have significantly more difficulty finding a job. But that should come as no surprise, as this is a very broad, general education in which employers find few relevant hooks for the functions they seek to fill.”

Drop-outs at risk

The perspectives for those with a limited educational background are especially bleak in times of crisis. Case in point: In 2008, a quarter of those with a limited education were unable to find a job within a year of leaving school. What’s more worrying is that 10,000 Flemish students a year leave secondary school without a diploma.

“While the decision to quit secondary school may at first feel like a relief, most people regret it very quickly,” says Anneke Ernon, spokesperson for the Flemish jobs and training agency VDAB. “Often these young people think that things will fall into place anyway, but they soon realise that they have little understanding of the job market, no idea of what wages or salaries to expect and that they are – rightly or wrongly – still competing in a very diploma-driven job market.”

Flanders has four different secondary school diplomas, some of which hold more of a promise of moving on to higher education than others. Another notable trend is that the gender gap at schools is increasing. Boys not only achieve lower scores than girls, they also leave school with vocational diplomas – the diploma least likely to lead to higher education – or without a diploma, more often than girls.

And while Muyters’ new report makes a strong case for further education, the continuing crisis is also affecting those with a solid educational backgrounds.

According to a report in the Flemish daily De Morgen, the unemployment rate among Flemish youth with a university or college diploma has risen by nearly 13% over the past year. This suggests that, in an unfavourable economic climate, higher education is not necessarily a guarantee of employment.

“Youth employment is always strongly linked to prevailing economic conditions,” adds Ernon. “They are the first to suffer in times of crisis; but they are also the first to benefit when things start getting better.”

Skills mismatch

Skills mismatch on the youth labour market has become a persistent and growing trend. Overeducation and training exists alongside a lack of education and skills, and increasingly skill obsolescence, brought about by long-term unemployment.

More relevant education and skills are the first steps toward increased employability, says Ernon. “We need to guide our youth toward courses and diplomas for which there is a real need out there. While many girls still choose to study ‘office management’, they suddenly realise that, due to difficult economic conditions, they’re in competition with people holding BA degrees or multiple diplomas when they start applying for jobs.”

On the other hand, she continues, “we have the market screaming for qualified refrigeration mechanics but hardly any youngsters enrolling in the course. The choices our young people are making are still very much driven by stereotypes surrounding certain jobs.”

Young people with jobs, meanwhile, are still often the first victims of a crisis. Because many are employed part-time or under a temporary contract, it is administratively easier and cheaper to terminate their contracts than those of older, long-term employees. It explains why, together with a lack of experience, they are often the first to lose their jobs in times of crisis.

A shrinking employment market and lack of experience remain the key reasons why young people struggle to find work. Add the fact that more than half of them are employed in the commercial services sector (hotel, catering and tourism) – sectors that offer mostly part-time and temporary jobs – and their precarious employment position becomes clear. While one in three youngsters have a temporary job, research shows that the majority would prefer a full-time, long-term contract.

Lack of experience is also cited as a key reason why so many school-leavers struggle to find a job. A recent article on jobat.be points out that while students in Denmark, Austria and The Netherlands often combine studying and working, Flemish students are much less likely to do so.

“One could call it a difference in culture,” writes Andre Van Hauwermeiren of VDAB in the article, although he emphasises that the numbers should be viewed with caution. “A student who works two hours a week is registered as working, while one can hardly call it a full-fledged job.”

Internships close the gap

On 1 February this year, the federal government introduced the instapstage or entry internship, a measure aimed at helping those with no secondary school diploma gain work experience. The government hopes to equip the youngsters with the necessary experience and skills to find a job more easily and also to encourage employers to train young people with little to no job skills.

The entry-level internships are for those 25 and younger, last three months and provide the intern with a salary of €760 per month, most of it paid by the federal government. Interns are allowed to follow two internships at different companies for a total of six months.

The government of Flanders, meanwhile, has provided a second option, with its IBO measure, which stands for Individuele Beroepsopleiding (Individual Job Training). IBOs allow employers to put someone who is unemployed to work on an IBO contract. The contract offers the worker an internship of one to six months during which they still recieve unemployment benefits.

With an IBO, the employer contributes a very modest portion of the salary and doesn’t have to pay social security contributions for the trainee. In return, the employer must offer the worker a full-time job on completion of the training.

While the VDAB prefers employer-paid internships and training programmes to those supplemented by the government, it also encourages those who have been without a job for a significant amount of time to re-join the labour market through these low-paid training programmes.

The Flemish Chamber of Commerce, Voka, agrees: “It is better to fill an empty CV with internships than to wait for a job to fall from the sky,” says Voka social dialogue advisor Sonja Teughels in DeWereldMorgen.

Postponing perfection

Though that may be easier said than done. Many young people don’t see the point in working for essentially the same amount of money they are receiving from unemployment benefits. But in a world of work in which internships or volunteering are often the only ways in which to gain experience, it leaves many school-leavers with only one option: give up – at least temporarily – their idea of a “dream job” and accept a training programme or something that is below their level of education.

Not surprisingly, many young people are not willing to accept this reality and keep trying to find a job they really want, with all the predictable consequences. Including, according to the Belgian National Bank, an increasing mountain of debt.