EKIP– Expert Club for Economics and Politics A Different Opinion
The EC report clearly shows that the problem of youth employment is present in most countries in Europe. However, the data show that Bulgaria is among the countries where young people experience the most serious difficulties in their realization on the labor market. It is extremely important not to rely solely on programs at the EU level to deal with the problem. Obviously, the policy followed so far, which is almost entirely limited to the so-called "active measures" on the labor market, is not bearing fruit and new approaches must be considered.
Stoyan Hristov
Against the backdrop of the poor prospects facing most European countries, the problem of unemployment not only remains but also deepens. The difficulties experienced by a given economy are putting serious pressure on young people and their opportunities for realization. Youth unemployment in the EU reached 22.7% in the third quarter of 2012 – twice as high as that among adults[1]. The reason for this article is the report published on 5 December by the European Commission, which tracks the problems faced by people aged 15-24 in finding a job, as well as the measures taken at the European Union (EU) level.
The difficult transition from education to work, as well as high levels of inactivity among early school leavers, remain among the main problems faced by young people in the EU. There is also a lack of sufficiently qualified personnel in a number of fields. In order to address these problems, the EC funds various programmes to increase the number and quality of traineeships, as well as to guarantee a job or training for young people who have recently left the education system[2]. Among the measures used are reforms of institutions that help young people to enter the labour market. Despite all the actions taken, over 2 million vacant jobs remain available, alongside high levels of unemployment.
The likelihood of young people finding a job is generally low. Less than 1/3 manage to join the workforce. Even if they do, the chance of staying in the job is not high either. The report states that 42% of young employees have a fixed-term contract (four times more than adults), and 32% have a part-time contract (almost twice as many as adults). Moreover, the share of young people who are neither working nor in education is increasing. One of the main reasons for these problems is the level of education. More than half of young people who have left education early are unemployed, and 70% of them wanted to start a job.
The report emphasizes the large differences in individual EU countries. For example, in countries such as the Netherlands, Germany and Austria, youth unemployment is low and employment is high compared to the EU average. In other words, the problem is relatively small there. The situation is radically different in countries such as Greece and Italy, where the youth employment problem is clearly expressed and is deepening. After checking the data, it turned out that Bulgaria is also a bright representative of this second group.
The youth employment rate in the country remains at extremely low levels (20%), far from the EU average (nearly 34%). In fact, only 4 countries can "boast" of lower employment. If we look at the unemployment rate, we will see that Bulgaria is above the EU average there too, although we are far from the leaders in this indicator.
Part of the problem lies in the level of education. The employment rate among young people with primary education is almost two and a half times lower than the European average. The data show that these young people have serious difficulties in finding a job compared to their peers with a higher level of education. Although this gap seems intuitive, it is larger in only two countries – the Czech Republic and Slovakia.
The apparent lack of incentives and opportunities for realization for graduates or dropouts makes us one of the countries with the highest share of young people who are neither working nor undergoing any kind of training. Inactivity among young people is becoming a major problem in Bulgaria, remaining far above the average levels in Europe. Moreover, it turns out that a large part of the active population in this age group who is available for work is not looking for one (23%). Only Italy has a higher share, and the average level for Europe is only 7.8%.
Source: Eurostat
The problems listed so far in the country negatively affect the so-called long-term unemployment. Bulgaria is one of the countries with the worst values in this indicator as well. Studies show that the longer a person remains unemployed, the more difficult it becomes to subsequently find a job[1]. When an economy begins its recovery, a number of young people will already be out of the workforce with no prospects for returning[2].
When we look at youth employment at the regional level, we see that the problem in some parts of the country is even more serious. The South-West region, which includes Sofia-stolitsa, performs relatively well for the country. The youth employment rate reaches 26%, or 6% more than the national average. At the other extreme, however, are the North-West and South-Central regions. There, employment is 16.6% and 15.6%, respectively, which is almost 2 times less than the average levels for the EU. It is the North-West region that is characterized by negative demographic trends and an unsatisfactory assessment of the education system[3]. High levels of the age dependency ratio are one of the factors that exert serious pressure on the labor market in the long term, and the prospects for reversing this negative trend are unclear.
The EC report clearly shows that the youth employment problem is present in most countries in Europe. However, the data show that Bulgaria is among the countries where young people experience the most serious difficulties in their realization on the labor market. It is extremely important not to rely solely on EU-level programs to deal with the problem. Obviously, the policy followed so far, which is almost entirely limited to the so-called "active measures" on the labor market, is not bearing fruit and new approaches must be considered. As a start, a number of ill-considered policies that have been followed for years and that harm young people in particular can be discontinued. Typical examples of such policies are the constant increase in the minimum wage and minimum insurance thresholds, which according to a number of studies disproportionately (i.e. to a much greater extent) affect precisely young people with lower education, no experience and little experience.
