House of Lords - Youth unemployment in the EU: a scarred generation?

Youth unemployment in the EU: a scarred generation? - European Union Committee Contents

Chapter 6: The job market for youth in the EU

112. As discussed in Chapter 2 (paragraphs 27-32), the evidence we received suggested that, in some Member States, the youth unemployment crisis is in part a result of structural issues on the 'demand side'. Therefore, this Chapter considers the extent to which changes in the job market can help address youth unemployment.

Job quality

113. We heard from witnesses that, as well as a high youth unemployment rate, there was concern about getting people into quality, sustainable jobs. They observed that throughout the EU it had become difficult to find a secure job, with young people moving between paid and unpaid work.[196] Professor Simms said that "overall, governments' policies have tended to focus on getting people into work, no matter the quality of the jobs available".[197] She said that problematic early experiences of precarious work could lead to young people becoming disengaged at an early stage in their working lives and lead to reduced opportunities later on.[198] The structure of the labour market in many EU Member States meant that the "last in, first out" rule applied and this typically affected young people who had just joined the workforce.[199]

114. The TUC said that it had conducted research in the UK which showed that the proportion of young people in low-paid jobs in 2011 was substantially higher than in 1993. Perhaps the most controversial manifestation of this had been so-called 'zero hours contracts'. These were contracts whereby the employer was not obliged to provide the employee with any minimum working hours and the employee was not obliged to accept any of the hours offered.[200]The British Chambers of Commerce and the Centre for European Studies said that flexible contracts (such as zero hours contracts) provided a solution for employers and made it easier for young people to access the job market.[201] However, the TUC and youth representatives suggested that, while zero hours contracts could provide solutions to those accessing the market with experience and strengths behind them, they often presented a barrier to young people from accessing a sustainable and secure job. They said that the value and acceptability of flexible contracts was strongly related to the power balance between the employer and the individual.[202] The ETUC said that the "flexibilisation" of the labour market in Spain through the introduction of new types of labour contracts had not attracted or retained young workers.[203]

115. We consider that greater flexibility in the labour market, such as zero-hours contracts, can provide opportunities for young people to gain work experience and help to reduce high levels of youth unemployment. Concerns about the exploitation of workers and unfair working practices should be mitigated by the proper implementation of existing EU and national legislation to protect workers' rights, such as minimum wage levels.

Apprenticeships and traineeships

116. We received a considerable amount of evidence from witnesses about the importance of apprenticeships and training in tackling youth unemployment. One of the European Commission's key actions in this area is explained below in Box 7.

BOX 7

EU proposals on traineeships and apprenticeships

The European Commission's proposal for a Council Recommendation on a Quality Framework for Traineeships[204] forms part of the Youth Employment Package (see Chapter 3, Box 4). The European Commission issued the proposal in response to the results of a Eurobarometer survey which showed that one in three traineeships in the EU were substandard in terms of working conditions or learning content.[205]

The Recommendation sets out a number of guidelines for Member States, in order to increase transparency with regard to traineeship conditions. For example, it requires that traineeships be based on a written traineeship agreement. The Recommendation requires that the agreement should cover learning content (educational objectives, supervision) and working conditions (limited duration, working time, clear indication of whether trainees would be paid or otherwise compensated and whether they would qualify for social security). Traineeship providers would be asked to disclose whether the traineeship would be paid in the vacancy notice. The proposed Framework does not cover traineeships that form part of a university degree or that are mandatory to access a specific profession.

The European Alliance for Apprenticeships aims to bring together public authorities, businesses, social partners, providers of vocational education and training, youth representatives and other key actors in order to promote apprenticeship schemes and initiatives across Europe. A number of UK businesses and civil society organisations have joined the alliance.[206]

117. Witnesses were generally supportive of the promotion of apprenticeships and traineeships at EU level. Some said that across the EU—and in the UK in particular—there needed to be a cultural shift in appreciation of vocational versus academic education.[207] Barclays said that the motivation for its new apprenticeship scheme was that previously, university graduates were being recruited to fill roles which did not meet their aspirations and were leaving early. The company decided to create a separate entry point for young people to fill the roles that were unsuitable for graduates, thereby relieving the downward pressure on non-graduates.[208] McDonald's said that it operated its apprenticeship scheme partly because "it is incumbent on the big companies to help those young people get the skills and confidence to get the jobs that are out there".[209]

118. Some witnesses raised concerns about the "loose vocabulary" being used to define apprenticeships and the resulting doubts about quality that this caused for employers and job seekers alike.[210] Professor Robin Simmons, Professor of Education, University of Huddersfield, said that "calling a six-month programme in a retail outlet an apprenticeship is extremely different to a robust three-year programme with high-level qualifications, let us say within Rolls-Royce or British Aerospace".[211] Professor Sloman and the European Commission cautioned against viewing the creation of apprenticeships as a solution to youth unemployment and expressed concern about young people being caught on a "conveyor belt"[212] of one traineeship after another.[213] The ETUC noted that the quality and quantity of apprenticeship schemes varied between Member States due to their different industrial fabrics and social partnership models. For that reason, it said that the European Commission's recent efforts in this area, in particular the Recommendation for a Quality Framework for Traineeships, were among "the most important milestones of the past eight years when it comes to youth unemployment".[214] The ETUC said that the EU needed a common definition of apprenticeships and recommended using the definition provided by CEDEFOP.[215] It was disappointed with the non-legally binding nature of the European Commission's Recommendation and said that this would not be effective in raising quality.[216]

119. Business Europe acknowledged the success of the Austrian and German apprenticeship model, but said that "it is up to every other country to take things out of there and apply it to their own situation".[217] It did not feel that the EU should be setting minimum standards or guidelines on apprenticeships, which it felt was best left to Member States. Marks and Spencer said it did not get formal accreditation for its apprenticeship schemes in the UK, but believed it was not forgoing anything by not doing so because the training the company provided suited its business needs, as most of the individuals went on to become full-time employees in the company.[218]

120. Crossrail said it was trying to use its position as a large procurer of materials and services to address youth unemployment by attaching conditions to its procurement contracts over a certain value, requiring successful bidders to employ an unemployed person or an apprentice when carrying out the contract. Its Chairman, Terry Morgan, said that this business-led approach was far more effective than the Government imposing the requirements.[219] Prospects said that, while employers had an important part to play, moves to shift the cost of apprenticeship provision from government to business could have a detrimental effect on the quantity and availability of opportunities and on the outcomes for apprentices.[220]

121. The UK Government said they believed that the European Commission's attempts to promote apprenticeships and to ensure their quality did not respect Member States' competence in the area of education and training and that a "looser approach" would work just as well. By way of example, the Government highlighted that the 2012 Richard review of apprenticeships in England was informed by experiences in the Netherlands, Switzerland, Denmark and Germany. The Government said that the distinction in the European Commission's Recommendation between an apprenticeship and a traineeship did not easily translate into the UK context and that adopting the Recommendation could create administrative burdens for employers and Government alike.[221]

122. The UK Government said that LEPs and other local level actors had an important role to play in creating job opportunities for young people, including apprenticeships. At the same time, however, it was also essential to have a core national framework in place that could support employers, wherever they were, to offer apprenticeships.[222]

123. We conclude that the development of a variety of career pathways, including apprenticeships, traineeships and internships, is important in reducing youth unemployment in Europe. However, we are concerned about the proliferation of schemes being identified as apprenticeships but whose quality and applicability to the labour market is questionable. We believe that it is important to ensure that internships enable young people to access the labour market, and are not offered as a substitute for employment. We therefore endorse the European Commission's attempts to create a common understanding of what constitutes either an apprenticeship or traineeship in the EU. We recommend that, as much as possible, the UK Government should develop their future policies in this area in line with EU definitions.

Migration—benefits and challenges

124. The free movement of workers is one of the four fundamental freedoms of the EU, along with the free movement of capital, goods and services.[223] We wanted to explore the extent to which the EU and its Member States view mobility within the EU labour market as a solution to youth unemployment and whether policy makers should be taking into account the positive and negative socio-economic consequences of youth migration in the context of youth unemployment.

125. Youth unemployment is an emotive issue in many Member States and so is the youth migration that can be associated with it. Referring to the current high levels of youth emigration from Ireland, Emer Costello MEP said that "the scale of emigration is having, and will continue to have, a major impact on Ireland and on the Irish economy. We are losing some of our brightest and best".[224]

126. Some witnesses said that the migration of young people in search of employment is helpful. The British Chambers of Commerce said that mobility was helpful to the European labour market in general, "and we are doing a disservice to our young people if they are not able to access jobs in other countries when jobs are not available here".[225] The European Commission and the UK Government said that where there was high demand for labour, which could not be filled locally, encouraging migration could be helpful.[226]

127. Other witnesses said that the benefits of youth migration might be limited. Business Europe said that while mobility could help address the skills and labour demand mismatches in Europe, it was "not a silver bullet", and in order to address youth unemployment, had to be taken together with the reform of labour markets and education systems.[227] The European Parliament's Youth Intergroup said that young Europeans who moved to another Member State to find work were likely to be highly motivated, well educated and well-trained. However, they might not be fully aware of their employment rights in a different Member State and thus be vulnerable to exploitation by unscrupulous employers.[228] The ETUC said that in general, immigrant populations were often those suffering the worst working and life conditions and that measures should be taken to improve the social and labour situation of immigrant workers and young women in particular.[229]

128. A number of witnesses highlighted that the social implications of youth unemployment represented a pan-EU challenge with no respect for borders.[230] The Greek Ambassador to the UK said that both Member States and the EU institutions should take into account the implications of youth migration when designing employment policies,[231] while Emma McClarkin MEP said that migration was primarily a Member State matter.[232] Phil Bennion MEP noted that there was little a Member State could do about emigration other than make its own economy more competitive, particularly through labour market reforms.[233] Youth Enterprise and Unemployment and the ETUC said that negative effects of youth migration could only be addressed through joined up policy-making between Member States experiencing "brain drain" and "brain gain".[234] Despite the sometimes negative consequences of youth migration due to unemployment, the Greek Ambassador and Commissioner Andor said that the EU principles of equal treatment and freedom of workers should be upheld properly.[235]

129. In the current difficult economic and employment climate, we believe that the free movement of workers in the EU is particularly important. The use of these rights can contribute to reducing youth unemployment in the EU.

EU measures to support youth migration

130. The British Chambers of Commerce, NUS and British Youth Council spoke about the importance of EU programmes such as Erasmus + and Youth on the Move in encouraging the free movement of young people and workers across the EU.[236] EURES, the EU's online job portal, which includes a pan-EU job search facility and information about working abroad (see Chapter 3, Box 4), was seen by the European Commission as one of the key elements of the Youth Employment Package. However, the NUS and British Youth Council suggested that most young people were not aware of EURES, at least in the UK and there was some criticism of its functionality and content.[237] Crossrail said that it had deliberately chosen not to post its vacancies on EURES because it wanted to recruit people from the UK as much as possible.[238] The British Chambers of Commerce, British Youth Council and NUS all agreed that more needed to be done in a UK context to make young people more aware of the opportunities available to them elsewhere in the EU and to help them understand that barriers to participation, such as language ability, were not as problematic as they might think.[239] The Gilfillan Partnership supported the approach taken by some Member States to dedicate a proportion of their ESF allocations to support young people to study or work abroad for a period of time. As an example, it highlighted the positive impact that the youth-focussed 'Integration durch Austausch' programme in Germany had had on its participants' lives.[240]

131. Commissioner Andor said that the European Commission had carried out EU-wide surveys, which showed that more than half of all young people were interested in job opportunities in other countries if they were unable to find one in close proximity to their area.[241] Conversely, Dr Copeland and Professor Maguire said that the vast majority of the EU's young people wanted to stay in their own Member State, suggesting that a focus on young people accessing jobs in their own Member State would be more appropriate.[242] Dr Copeland said that the Youth Guarantee was an attempt to address the unemployment issue for those young people who did not wish to migrate to other EU Member States for work. In the context of the UK, Rachel Wenstone, NUS, said that the failure to become mobile in the search for work could be a "huge opportunity lost for most of our young people".[243]

132. The evidence we received from many witnesses highlighted the difficulties young people can face in becoming mobile in their local areas and countries, let alone travelling to another Member State. Professor Maguire, Impetus and UNISON highlighted that for the majority of young people who become NEET, the structure of opportunities available to them was defined by their local environment.[244]

133. We recommend that schools, higher education institutions and youth groups, as well as government and EU institutions, provide more information and encouragement to young people about the opportunities and support available to them to seek employment elsewhere in the EU.

Youth entrepreneurship

134. A number of witnesses said that EU initiatives and funds should be more targeted at supporting youth entrepreneurship, for example, through funding incubators and centres that focus specifically on young people with new ideas and business initiatives.[245] Dr Copeland said that this approach would have a much greater long-term impact on the problem of youth unemployment than simply focusing on education and training.[246]

135. NACUE, the Royal Bank of Scotland and the Prince's Trust argued that young people should be encouraged to set-up their own companies, bringing their skills to the market, rather than waiting for the market to respond to their skills.[247] NACUE said that local entrepreneurship would create local jobs, preventing young people being drawn to larger cities, where they would have to compete in a much larger workforce, for jobs in which they may be underemployed.[248] While the UK Government did not explicitly endorse this call, they agreed that LEPs should consider using EU funds to encourage self-employment.[249]

136. We recommend that the European Commission should make youth entrepreneurship a more explicit focus for the European Regional Development Fund and the European Social Fund.

196 Professor Simms; Q 164 Back

197 Professor Simms Back

198 Professor Simms; Q 72; Q 164 Back

199 Q 145; Q 164; Q 210 Back

200 UK Government , 'contract types and employer responsibilities', available at:
https://www.gov.uk/contract-types-and-employer-responsibilities/zero-hour-contracts Back

201 Q 71; Q 215 Back

202 Q 74; Q 134; Q 215 Back

203 Q 196 Back

204 COM(2013) 857 final Back

205 Flash Eurobarometer 378, (November 2013), The experience of traineeships in the EU Back

206 European Commission website, 'European Alliance for Apprenticeships', at:
http://ec.europa.eu/education/policy/vocational-policy/alliance_en.htm Back

207 Q 29; Q 87; Q94; Impetus Back