Unemployed young people costing Europe €153bn a year

Mon, Oct 22, 2012, 01:00

A LOST generation of 14 million out-of-work and disengaged young Europeans is costing member states a total of €153 billion a year – 1.2 per cent of the EU’s gross domestic product – the largest study of the young unemployed has concluded.

The report, by the EU’s own research agency, Eurofound, has discovered that Europeans aged 15 to 29 who are not in employment, education or training (known as Neets) have reached record levels and are costing the EU €3 billion a week in state welfare and lost production.

The Organisation for Economic Co-operation and Development said Europe was “failing in its social contract” with the young and rising political disenchantment could reach levels similar to those that sparked North African uprisings during the Arab spring.

The research, which will be presented at a high-level EU presidency employment meeting in Cyprus today, backs such fears: a survey of EU Neets included in the report found much lower levels of political engagement and trust compared with those in work.

“The consequences of a lost generation are not merely economic,” the report warns, “but are societal, with the risk of young people opting out of democratic participation in society.”

The number of young adults in work across 26 member states is the lowest on record, the report’s authors found. Those in employment were working fewer hours and in less secure jobs.

Last year 42 per cent of young working Europeans were in temporary employment, up from just over a third a decade ago. A total of 30 per cent, or 5.8 million young adults, were in part-time employment – an increase since 2001 of almost nine percentage points.

Since the global downturn in 2008, there has been a 28 per cent increase in associated Neet costs across the EU, with Italy facing an annual bill of €32.6 billion a year, France €22 billion, and the UK €18 billion.

The report calculates that as a proportion of annual national output, Ireland is estimated to have lost 2.8 per cent of its GDP to inactive young adults in 2011, while Greece lost 3.28 per cent and Poland 2.04 per cent.

The report’s authors warn that the total EU costs associated with Neets – €10.8 billion in public finance and €142.1 billion in estimated loss of output – are “very conservative”, as they do not include extra spending on crime or health or the likely long-term scarring effect of unemployment. – (Guardian service)