It is paella night in the Café Colectivo in Berlin. Café co-owner Jordi López Castillo circulates, asking guests where they come from and what they are looking for. His café is a magnet for young, unemployed Spaniards streaming to Germany to find work.
Unlike the newcomers, López chose to leave Spain to “see the world.” That was in 2006, before the financial crisis. Now his café is a hive of activity as young Spaniards create a home away from home, exchanging tips on jobs and accommodation.
There are currently 23 million young ‘NEETS’ in the rich world
“I was shocked by the numbers that came in 2010,” he says. Before that, he never heard Spanish on the streets. Now, the café throbs with Spanish culture, providing a platform for art exhibitions, concerts and good Spanish food. It’s often a space for newcomers to find work. Recently, a woman fresh from Spain staged a fairy tale she’d written. On the program for this month is a flamenco concert. “Everybody who comes here meets someone who knows someone who can help,” says López. And many do find odd jobs. They go to German language schools, meet others and slowly gain experience.
But while it sounds like an adventure, it often is not. “After a few years, they start to miss their families, the Spanish lifestyle and sun,” says López, who is currently saying goodbye to the first wave of migrants as he welcomes the next.
THE WELL-BEATEN GENERATION
The 26-year-old is witnessing the European face of unprecedented global youth unemployment. It has not spared any country, group or level of society, affecting those with master’s degrees as well as those with no education. The OECD announced in May 2012 that there are
23 million young people in the rich world, who are “NEETs” – that is, 15-to-29-year-olds who are not in employment, education or training.
Youth have been harder hit than any other group as the world struggles to recover from the financial crisis. Jobs have been lost to new technologies, and global businesses rationalize, outsource, and contribute less to taxes, job creation and social welfare. With an aging population and so many young people neither contributing to pension funds nor building capital, the crisis is set to deepen.
Those on the outside of the economy are being pushed even further to the outside
In the EU, youth unemployment is a record 23.1% – namely double the rate for the total working population (11.0%), according to the latest Eurostat figures from May 2013. Hardest hit are Greece (59.2%) and Spain (56.5%) followed by Portugal 42.1.%), resulting in massive youth migrations from the south to the north. While EU youth are more educated than ever, many are now waving useless degrees at firms unable or unwilling to give them a chance.
Of EU graduates, 10% are jobless. One of the jobless graduates is Carlos B. from Salgosa, near Madrid. The 31-year-old MBA graduate, who specialized in responsible tourism, entered the workplace in 2011, at the height of Spain’s euro crisis.
“I didn’t expect to get a long-term job,” he says. Work was scarce, and salaries had dropped. His only paid job since then was with an online hotel reservations startup. When that folded, he demonstrated with the
Indignados (the indignant) – young protesters demanding radical political change.
“It felt good to get the problem of youth on the table,” he says. “But nothing concrete came of it.” Last year, he set up an EU-funded ‘Youth in Action’ program to help Spaniards find work. It pays just enough to cover his costs, but he has had to move in with his parents. Many of his friends are depressed. “You go to university and then you get offered unskilled jobs that pay €700 a month,” he says.
How does this make him feel? “I’m deciding which country to move to.” A friend, who studied musicology, is now a waiter in Berlin, working 15 hours a day. He may follow him there, or go to Latin America.
SCARRED FOR LIFE
Experts talk of the long-term “scarring effects” of being unemployed in youth. Hanan Morsy, an IMF economist, reported in
Finance & Development, the IMF’s quarterly magazine in March 2012, that the longer a person is unemployed, the more it reduces that person’s earning potential. This can be up to 20% compared with peers who find work early. The earnings deficit can last as long as 20 years. Japan’s so-called lost-generation – those unemployed during the 1990s economic slump – remained jobless long after the recovery because employers preferred to employ recent graduates.
But there are the psychological scars, too. According to a 2012 study on the characteristics, costs and policy responses of NEETs in Europe by
Eurofound, the EU body working on specialist policy, youth with little education who remain isolated at home are three times more likely than any other groups to become NEETs.
Alison Quinn, who hails from the small Irish village of Littleton, says many of her friends have given up. “They say, ‘What’s the use of even trying?’ and spend most of the time in bed or watching TV,” she says. “I went through this myself. But you have to keep on going otherwise you slip into a depression.”
Quinn has been trying to get a job ever since finishing beauty college two years ago. She needs to do 600 hours of practical work before she can get her diploma, but nobody will employ her. They say she is too young and inexperienced, but she can’t get experience without a job. She has offered to work for free but beauty salons have lost business and fear she might steal clients.
“It feels terrible. You are willing to work, but nobody will give you the chance,” she says. “After a while you think nobody wants someone like you.”
Alison lives at home but would like to be independent. Her parents are struggling and her brother, who left school last year, is also unemployed. Recently, the first of her friends left to try his luck in Canada.
“You ask yourself, ‘Am I going to have to do that down the line?’” The thought frightens her. “I don’t want to leave my family.” Now she is on the ‘Work Winner’ program for low-skilled NEETs at the
Tipperary Regional Youth Service.
“Those who are normally on the outside of the economy are being pushed even further to the outside,” says Donal Kelly, a counselor on the program. He says many Irish youth left school to work in the booming building industry. When that collapsed, they found themselves competing for simple jobs with university graduates.
“The youth we work with would all be employed if the economic situation were different.”
Policy-makers regard NEETs as a particularly problematic group, as they are disengaged from the economy, lack faith in society and politicians, and are not unleashing their potential. In the EU-27, the loss to the economy in 2011 was estimated by Eurofound to be $153 billion, 1.2% of GDP. But while policymakers have warned about the problem since 2009, youth unemployment continues to rise.