Coronavirus ‘Class of 2020’: the lost generation of Europe?

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PRAGUE (Reuters) – When Dunia Skaunicova graduated in media marketing from the Metropolitan University of Prague, she quickly found her first dream job at a start-up in the Czech capital, where companies were fighting to recruit graduates multilingual.

Dunia Skaunicova, 24-year-old job seeker, checks her cell phone while she waits for a yoga class after the coronavirus disease (COVID-19) outbreak in Prague, Czech Republic, July 8 2020. REUTERS / David W Cerny

Months later, however, she suddenly found herself looking for a job after losing her job when the coronavirus pandemic hit the Czech economy. This time, she struggles.

The pandemic has effectively removed the first rung of employment for many young Europeans, a situation which economists say is likely to harm their employment and income prospects in the long term.

“I have had five or six in-person interviews in the past two months, but it sounds more like a cast because there are so many people,” said Skaunicova, 24, who speaks Czech, English and French and is looking for a job. as a marketing manager.

“They will invite several people over the same hour, then you will sit there and wait to be called,” she said, adding that she had had many other online interviews, so far without success.

Youth unemployment has plagued Europe for a long time, persisting for years after the 2008/09 global financial crisis and hitting Southern countries such as Spain and Greece particularly hard.

However, the first signs are that things are going to get worse.

While the overall unemployment rate in the EU in May increased by only 0.1 percentage points over the month to 6.7% – a modest increase thanks to the leave and partial unemployment schemes – unemployment among those under 25 increased by 0.3% three times faster, reaching 15.7%.

A major challenge is the fact that youth unemployment is strongly correlated with economic growth: the greater the overall economic blow, the more it affects young workers.

Before the coronavirus epidemic, the Czech Republic had the lowest youth unemployment rate in Europe, just 5%, after a prolonged economic boom. However, from year to May, unemployment among 15-24 year olds jumped by just over half to 34,000.

Dennis Tamesberger of the Chamber of Labor in Linz, Austria, tracks youth unemployment across Europe and predicts that the youth unemployment rate in the Czech Republic could more than triple in 2020 to 16%.

Even short jobless spells when young people can affect a person’s long-term prospects, says Tamesberger, who warns that the consequences of rising youth unemployment facing Europe could last for a generation.

He points to a study by the London Center for Economic Policy Research showing that a month of unemployment between 18 and 20 years of age results in a loss of income for life of 2%. Tamesberger says that longer unemployment spells when young people increase the likelihood of future jobless jobs because people lack the skills and experience to stay in the workforce.

“Periods of unemployment during youth can have a negative impact on later life, which justifies the term of a lost generation,” said Tamesberger.

LOW MARKET

The London-based Resolution Foundation think tank studied three decades of British economic data to come to similar conclusions.

He found that young British people who left education at the height of the 2008/09 economic crisis continued to suffer from higher unemployment rates than those who left with similar qualifications four years later – despite the employment boom of the recovery period.

With the UK Bureau of Fiscal Responsibility predicting that unemployment in the UK will reach 10% in the second quarter of 2020 in April, modeling by the Resolution Foundation predicts that the chances of a low-educated young person will get a job in three years have been reduced by a third party.

“The 2020 corona class could face years of cut wages and limited job prospects long after the current economic storm has ended, unless additional support is provided quickly,” said study author Kathleen Henehan of the Resolution Foundation.

Youth unemployment in Europe has taken years to recover from the financial crisis and has been stuck at around 30% in countries like Spain and Greece – a figure that Tamesberger and others predict could now reach 45% .

Part of the problem is that the European labor market is already biased compared to new entrants who often do not have the permanent and secure contracts of their older colleagues and are therefore targeted for redundancies on a “last” basis. come in, get out first ”.

The coronavirus pandemic has created new barriers, as the sectors that typically offer young people their first step on the scene – retail and hospitality among them – are the most affected by the social distancing measures that could still be needed for months.

This is particularly acute in Spain dependent on tourism. Newly graduated teacher Amalia Bragado, 25, had been hired to work as an instructor at a children’s summer camp in the lakeside town of Sanabria in Castile and León in north-western Spain, where she was working last year, but the job was canceled.

“We are not going to have camps – or at least there will not be in the usual way, we still do not know what will happen,” said Bragado, from the Castilian town of Zamora.

LEARNING FOR ALL?

For Bragado and others facing months of uncertainty and loss of income, it is now up to policymakers to prevent a wave of youth unemployment worse than that seen after the 2008/09 crisis.

“Even in the best of times, stepping on the job ladder is a challenge. And this is not the best time, ”said Valdis Dombrovskis, the European Commissioner responsible for overseeing the economy, during a briefing on the EU’s political response.

EU urges governments to use existing EU funds to create jobs and training for young people, saying at least 22 billion euros ($ 24.9 billion) in investment is needed to start fill the structural skills gaps found in job markets such as that of Spain.

“There are very few young people trained in professional programs offering real job opportunities and there is a lot of overqualification with diplomas which are not demanded by the market,” said Ignacio Conde-Ruiz of the Spanish think tank. Fedea.

UK economic stimulus plan released by finance minister on Wednesday included £ 2 billion ($ 2.5 billion) fund to create six-month job jobs for unemployed 16-24 year olds and more government-funded learning.

In the meantime, for those who are fighting for fewer job offers, the competition is fierce. They describe research where companies don’t bother to respond or, if they do, they tell applicants not to expect a lot of salaries or benefits.

“There are applications or positions that are open for three or four months, and you can see that there have been hundreds of applications,” said Joseph Petrila, a 23-year-old American who recently graduated from the Anglo-American University of Prague and is looking for a job as a researcher in economics.

While young workers like Petrila are struggling to get their foot in the door, Czech companies that used to have a hard time hiring now benefit from a surge in applicants.

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This could allow them to cut wages and improve their bottom line as they try to overcome the impact of the pandemic. But for school leavers and new graduates, it means getting this first job will require a whole new level of determination and preparatory skills.

Blake Wittman, European Commercial Director of recruiting company GoodCall, said a company in Prague told him that vacancies had dropped from around 5-10 before the pandemic to 50-100 job applicants currently open.

“Any job that opens is gold and people behave like that,” said Wittman.

Additional reporting by Kristyna Jandova in Prague; Belen Carreno and Paola Luelmo in Madrid; Mark John in London; Editing by Mark John and Susan Fenton

Our standards:Principles of the Thomson Reuters Trust.

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