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AEGEE-Europe’s position on the Youth Guarantee Scheme

AEGEE-Europe welcomes all the efforts that have been undertaken by EU institutions to combat Youth Unemployment, and in particular the Youth Guarantee Scheme as well as the Youth Employment Initiative proposed by the European Council in February 2013, which allocates a budget of 6 billion Euros for the period for 2014-2020 for the combat of Youth Unemployment.

We believe that with its rapid development, the Youth Guarantee Scheme is on a good way to become a truly powerful instrument to support young Europeans that are in danger of becoming unemployed.

We also fully support the amendment to the proposal of the Commission which was voted on 23rd of April by European Parliament’s Employment and Social Affairs Committee, asking for an enlargement of the Initiative in terms of age and region.

We believe it is crucial to extend the age limit of the Youth Guarantee Scheme from 25 to 30 years, as currently particularly tertiary education very often finishes after the age of 24 and also these young graduates are in danger of unemployment, and much more finding a job which fits their qualifications. We believe that is necessary also include these young graduates in the Youth Guarantee Scheme and if necessary give them additional training to even out the skills mismatch that currently exists within the European Union.

Furthermore, we welcome the extension of the additional support to bigger areas by lowering the benchmark for support from 25% youth unemployment in the respective area to 20% .

Besides these points, we want to stress once again the importance of the involvement of all stakeholders in the design and implementation of the scheme, as already mentioned by Council, Commission, and Parliament, and in particular we urge member states to involve youth and youth organisations in the dialogue from the beginning, to make sure that the developed tools are youth-friendly and accessible. Youth organisations have a unique outreach to youth and especially to the so-called NEETs (young people not in employment, education and training), which they can reach at much lower costs than any public institution. We believe that youth themselves have to play a key-role in the implementation of this scheme and should also be involved in the development of clear quality indicators of the Youth Guarantee Scheme.

We would like to point out that the currently proposed period of 4 months between a young person entering unemployment and at the latest he or she has to be provided with an opportunity of a training, job, or education, is relatively long. The longer a young person stays in the state of unemployment, the bigger risk is that this person will remain there in the long term, as this situation seriously influences motivation and self-esteem.
We also must not neglect that along with the implementation of the new schemes, also existing schemes and public employment services have to be reformed and adapted to make sure they are able to meet the specific needs of all applicants.

Finally, the Youth Guarantee Scheme is a big and ambitious project, but it is necessary in these days of crisis more than ever. With Youth Unemployment being one of the main demographic challenges the European Union will have to face in the next decades, we urge decision makers to invest adequately into this scheme. With the necessary extension of scheme in terms of area and age, the same amount of fund will be available for a bigger target group. With the 6 billion Euros currently allocated to the Youth Employment Initiative, we have serious doubts whether this is a sufficient amount of money, considering especially the costs created by each young person that remains unemployed, which is yearly 30.000 Euros.

Background:
In February, Youth Unemployment in Greece shot to a new record, now leaving 64%, almost two thirds of young people under 24 unemployed. The ones that have found employment often work under their qualifications and underpaid, with the minimum wage being cut to 500 Euros for this age group. The unemployment rate in Spain for the same age group is almost 56% and still on the rise. It reaches almost 40% in Italy and Portugal, which is more than three times the average unemployment rate in Italy. But also in countries like France, Poland, Hungary, and Bulgaria, almost one third of young people are unemployed.

The average youth unemployment in the European Union has reached 23.50%, more than double than the average rate of 10.90%, which means that one in four persons younger than 24 is unemployed. Since the beginning of the financial crisis, 2008, it has doubled. Young people are much more at risk of long term poverty and exclusion.

At the same time, the cuts in spending governments made as a reaction to the recession affect young people much more severely, as e.g. child benefits were cut, tuition fees rose and incomes for young people stagnated if not reduced, resulting in unequal government spending and intergenerational injustice. Governments spend up to 8% less money on young people, their country’s future, than on older people.

Clearly, young people have been much more affected by this crisis than any other age group. If the current situation is not met with adequate measures, the aftermath will the devastating, a generation of young people, the “lost generation” as they are called, without jobs, without income, without purchasing power and dependent on the social welfare systems in their countries.

Specific attention has to go to the so-called NEETs, young people who are not in education, employment or training. Currently, there is 14 million aged 15-29 of them in the European Union, costing around 150 billion Euros per year, while according to research of the International Labour Office only 21 billion Euros would be needed to make a true change. As currently, 6 billion Europa are allocated for this Youth Guarantee, it is the responsibility of the Member States to provide the rest from their own resources, and we expect they will not fail in doing so. This is one of the cases where austerity is far more costly than a brave decision to invest in a new scheme that will change completely the scenario in the medium to long term. A recent study by the European Policy Centre estimated that achieving the EU’s 75% employment rate target by 2020 would generate up to €1.2 trillion in extra revenues for EU Member States (7% of GDP).