GLATTBRUG, SWITZERLAND – Rising youth unemployment, especially in Europe, is making headlines worldwide. Roughly 5.5 million Europeans under the age of 25 are unemployed. More than 7.5 million people aged 15-24 are “NEETs” – not in employment, education, or training. The youth unemployment rate exceeds 25% in 13 European countries, amounting to roughly 30% in Italy, Ireland, Bulgaria, Cyprus, Latvia, Hungary, and Slovakia, and surpassing 55% in Greece and Spain.
Furthermore, more than 30% of jobseekers under 25 have been unemployed for more than 12 months, and their chances of finding employment remain low. Less than one-third of young people who were unemployed in 2010 found a job in 2011, and their chances continue to decline.
According to a recent report by Eurofound, the economic cost (benefits paid plus tax-revenue lost) of young NEETs exceeds €150 billion ($196 billion) annually – more than 1.2% of the European Union’s total GDP. In some countries – such as Bulgaria, Cyprus, Greece, Hungary, Ireland, Italy, Latvia, and Poland – youth unemployment costs more than 2% of GDP.
If allowed to continue, Europe’s labor-market crisis will inflict lasting damage on an entire generation, with unforeseeable medium- and long-term effects on employment, productivity, and social cohesion. Reversing this trend will require concrete proposals and decisive action. Countries must pursue solutions that help companies to create jobs by becoming more flexible, thus increasing their competitiveness.