Coasters to High Achievers: Breaking down Europe’s youth labour crisis

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Coasters, Meanderers, Non-believers, Dreamers, Strugglers, Persisters and High Achievers. Those are the (mostly) unflattering categories that consulting firm McKinsey has used to categorize young people looking for employment in Europe. You can pretty much see where this is going – with the exception of the High Achievers (10 per cent of the total), all the categories of youth in their study are apparently finding little or no success in the job market.

Youth unemployment in Europe – even more so than youth unemployment in Canada and the United States – is a hot topic. The figures are uniformly depressing. Across the euro zone, the unemployment rate for those under 25 is close to 25 per cent, a staggeringly high figure. And, from what we know about previous business cycles, those who get shut out of the job market when young feel the missed opportunity their whole lives, in the form of reduced incomes and opportunities.

For the most part, we have been led to believe that Europe's problems with youth unemployment are mostly a business cycle phenomenon. That is, Europe's economy is weak to start with, so of course there are not enough jobs. Youth always have a problem finding a foothold in the workplace, so they have a harder time in the labour market than everyone else. Jolt the economy into higher gear – through lower interest rates or more government spending or whatever – and there will be more jobs. Or at least that is the conventional argument.

Not so, says McKinsey. According to the just published study by economists Mona Mourshed, Jigar Patel and Katrin Suder, the problems of European youth unemployment are much more complicated than a lack of demand. First off, they note that there is the problem – and for youth, that's really the way to describe it – of workers aged 55 and over hanging in the labour market at higher rates than previously. That's a phenomenon that North Americans should recognize: A group getting close to retirement who realize that they have not saved enough and that their houses are worth less than they would like. So they keep working – squeezing young people out.

But the bigger problem, according to McKinsey, is that the youth available do not have the labour force characteristics that European companies need or want. Consider that 27 per cent of the companies surveyed by McKinsey have had positions open for a year or more because they could not find the right employees. One-third said the lack of skilled employees is causing major business problems in terms of cost, quality or time.

So why are the available young so ill-matched for the labour force? McKinsey came to three conclusions. Some apparently do not have the right education, mainly because they cannot afford it, even in a heavily subsidized environment. Some have no clue what jobs are available, particularly in terms of vocational work, and some of those who would consider such jobs feel that there would be a social bias against training for them.

Second, the available workers apparently do not have what employers would consider to be sufficient "general" skills, such as communications and what the researchers call "work ethic."

Finally, young people apparently find the transition to work "difficult" and feel that they do not have good career-support services.

There is a bit of blame-the-victim about all of this – in a hot economy, after all, even those with middling communications skills tend to get snapped up. But there are also lessons here for countries such as Canada and the United States, not just Europe. After all, according to Statistics Canada, the youth unemployment rate for Canada was 14 per cent in December – not European-high, but high enough. Should we care to take a similar survey of employers and would-be employees here, it seems likely that many of the same issues would come up.

McKinsey speaks highly of "High Achievers" – those golden youth who acquire the right skills through education and convert that into success and satisfaction in the work force. We don't know if their proportion in Canada is a higher or lower percentage than the 10 per cent in Europe, but whatever the proportion, it would be good to get it higher, whatever it takes to make that happen.

Coasters, Meanderers and Non-believers are not going to do much to move the economy forward, whether in Europe or anywhere else.

Linda Nazareth is a Senior Fellow at the Macdonald-Laurier Institute. Her book Economorphics: The Trends Changing Today into Tomorrow will be published by Relentless Press this month. www.economorphics.com