Youth unemployment: the remedies

GENERATION NEXT:Just a quarter of people aged between 15 and 24 are working, down from half before the crash. Job policies can ease the problem, but only economic growth can fix it

THESE ARE not good times to reach adulthood. Emigration, joblessness and involuntarily extended periods in education are the lot of so many. Recessionary times always hit the inexperienced harder. But the narrowing of opportunities and the rise in insecurity experienced by young adults over the past half decade have, on average, been very significantly worse than these effects on older generations. And, as so many other Irish economic indicators show, under-25s in Ireland have had it worse than most of their counterparts elsewhere in Europe, particularly when it comes to jobs.

Despite continued and rapid growth in the total Irish population, the 15-24 age group is shrinking significantly, mostly from emigration. At the beginning of 2006 there were 638,000 people of this age group in the country. By early this year, the number had fallen by 130,000, almost all accounted for by twentysomethings, pointing to emigration, rather than lower birth rates in the early 1990s, as the explanation.

For the 500,000 youngsters who remain, their lot has been transformed. Perhaps the most shocking single figure of the recession has been the collapse – and that word barely describes it – in the numbers of young people at work. While there has been considerable discussion of youth unemployment, the numbers formally out of work have changed much less than those for youth employment.

In the years leading up to the bust, there were about 325,000 gainfully employed under-25s in the State. At the last count there were just 130,000, meaning that for every 10 jobs that existed at the beginning of 2008, six have disappeared. Put another way, in 2012 only a quarter of the 15-24 age group is working, down from half before the crash.

When you consider that the number of over-45s at work has hardly been affected by the recession, it is surprising that issues of intergenerational equity have not come to the fore.

Despite all they endure, young people remain more upbeat than the over-25s according to Amárach Research. Since early 2009, it has conducted a monthly poll in an effort to assess the national mood. Consistently, about six out of 10 young people have told the firm’s surveyors that they are generally optimistic, a slightly higher proportion than the older respondents. And when asked whether they think the worst of the recession will be over in a year’s time, the under-25s are more positive than the over-25s. About 40 per cent of them believe the economy will be on the up in 12 months, compared with just over 20 per cent of older people.

One possible explanation for youthful optimism is the low numbers of unemployed people under the age of 25. Only a fraction of young people who have left employment have become formally “unemployed”: that is, people who are looking for work but cannot find it.

Despite the decline of 200,000 in young people working, the numbers formally jobless in the first quarter of this year stood at “only” 56,000. And that is down significantly from postcrash peaks in 2009.

So if under-25s are neither working nor unemployed, what are they doing? Emigration almost certainly accounts for most of the difference between lost jobs and numbers unemployed. Another reason is more people spending more time in education. Dr Dermot Stokes, a former head of the Government’s Youthreach programme, says people are extending their time in both second- and third- level education, often taking additional courses to improve their prospects in the job market.

Delaying the departure from education is a typical response to recession, and it may be the one silver lining of the bust. Among the damaging effects of the property bubble was the lure of young men from learning to building sites. Instead of investing in skills that would stand to them for life, many succumbed to the temptation to earn, often in low-skilled sectors.

While longer spells in education probably account for most of the young people who are not in the workforce, it is very likely that more under-25s who are neither at work, on the dole or in education are depending on their parents.

Gerard O’Neill of Amárach Research, who watches societal trends closely, says that even those who do leave home, for college or work, often return afterwards as courses end or jobs are lost. He notes that as fewer sectors or professions hold out the prospect of secure, stable employment, many in their mid-20s are plumping for the security of the family home.

What can be done to reverse the trends that have transformed the life chances of the young? Economic growth is by far the most important remedy. Without growth there is little prospect of sufficient numbers of jobs being created to provide opportunities for those starting out in professional life.

But policy responses can help too, because there is not a fixed number of jobs out there. More, better-trained people will create their own demand in the labour market.

“Investing in quality apprenticeships and vocational training is one sure way to keep youth unemployment low, as successes in countries such as Austria, Germany, the Netherlands and Switzerland show,” says John Martin, the Irishman who heads the employment, labour and social-affairs division of the Organisation for Economic Co-operation and Development, in Paris.

The international evidence points to module-based training that has tight quality control, is attractive to women, is not time-limited and is not closed to older people who have work experience.

The Irish system remains a long way from international best practice. Martin notes that it has tended to cover the traditional trades and essentially served as a feeder for the construction trade. He urges that, as far as possible, ongoing reforms of the training and apprenticeship system be driven faster and based on successful experiences internationally.

If the opportunity the crisis presents is taken and the system is radically improved, it might help future generations of young people avoid the fate that has befallen the current one.