The Pandemic, Youth and Europe: will the EU take the strain of youth unemployment from us?
Youth unemployment is on the rise again. The COVID-19 pandemic is not only an unprecedented health crisis but is also tangible through an immense economic downturn with an increase of the EU-wide youth unemployment rate from 15,7 to 17,6% as one of its features. The pandemic destroys job opportunities for newcomers in the labour market and has, therefore, inversed the downward trend of youth unemployment of the last years. Moreover, a well-known feature of previous economic crises also characterizes the pandemic: young workers on the EU-level have lost their jobs more frequently in a permanent manner than other age groups. Therefore, youth unemployment is back on the European agenda but are we heading once again towards a lost generation?
Marc Steiert is a PhD Researcher in European Union and EU Social Law
at the European University Institute (Florence, Italy)
The last youth employment crisis hit Europe only some 10 years ago. In reply, the European Union (EU) developed measures to deal with youth unemployment, such as the European Youth Guarantee, a recommendation on how to structure active labour policies for young people, or the Youth Employment Initiative, a funding facility to favour youth employment. Further, labour mobility had been the Union’s traditional approach towards unemployment as it might recalibrate labour markets, also used as a tool in favour of youth employment during the 2010 downturn. Taken together, the three tools might be coined as regulatory framework of EU youth employment policy. The pandemic puts this framework, however, under considerable strain and will be its first serious test case.
Can free movement be the answer to youth employment in the current crisis?
Historically, the EU is tied to the mobility of persons and, indeed, young workers have been crucial in the Union’s development. Free movement law creates rights for (young) individuals to find employment in another Member State and represents an opportunity for those facing adverse employment prospects. It, therefore, is an important employment tool in a common labour market.
The lesson learnt from the pandemic could, however, be characterized in the following manner: it is the safest for society and oneself to live in a bubble and to restrict the number of people met on a daily basis. Lockdowns, shutdowns and restrictions on movements have, based on this lesson, created a new normal, in which mobility, better an increase in the number of people met, seems a misplaced attitude (Azoulai 2020). Further, while their effectiveness in ‘breaking the curve’ might be criticized, the border closures in early 2020 reflect the mentioned attitude towards mobility. More importantly, the conclusion must be that the consensus on personal mobility can become fragile in times of crisis, with unprecedented consequences for economically active people.
Moreover, the new notion of “essential mobility”, introduced through the border closures, supported by the Commission and still permitted in the early pandemic, contains a pitfall that needs to be addressed. EU free movement law relies on the premise that everyone is entitled to use their right to move, whereas the distinction based on the essential nature of work challenges this paradigm of equality and nobody can tell yet what the distinction implies for the job-search of young Europeans in times of crisis. Lastly, the euro-crisis, despite an important take-up in young mobility, has shown that mobility is not even an adequate reply to youth unemployment in a (traditional) economic downturn. Indeed, free movement is not neutral, but rather selective as young mobility is often limited to a high-skilled group (Lafleur and Stanek 2017), thus cannot mitigate unemployment among young people with lower levels of education. Further, it can cause concerns about “Brain Drain” of the high-skilled group.
Recovery from COVID-19 in the EU, towards a strong scheme for youth employment?
The persistent increase in youth unemployment in 2013 led the EU to recognize that its existing tools, in particular mobility, were not appropriate to respond to the size of the challenge caused by the euro-crisis. Member States could not act individually, and a common solution was a dire need. Hence, new legal means had to be found to develop the Union’s activity for youth employment due to its restricted competences in employment policy. To overcome these limitations, a two-fold strategy was chosen relying, to some extent, on legally established means: the European Social Fund (ESF) and, on the other, the coordination of national economic and employment policies on the EU-level through the European Youth Guarantee.
Currently, Europe is facing the on-set of a new youth unemployment crisis which constitutes the stress-test for these tools developed in the euro-crisis. Therefore, I will assess this framework and its capacity to mitigate youth unemployment in light of the pandemic and the Union’s recovery plan to COVID-19.
Let us start with the European Social Fund. It is a funding facility, well grounded in Article 164 TFEU, to implement the Union’s social objectives: the ESF supports investment programmes by the Member States. As Member States are responsible for choosing the funded projects in the first place, they are, however, not obliged to invest into youth employment.
On the other hand, in the midst of the euro-crisis, the Youth Employment Initiative (YEI) was inserted into the ESF endowed with € 8,8 billion. It is a targeted initiative as funding is allocated to regions with youth unemployment levels over 25% (see table 1) and funded projects shall integrate young people, aged under 25, into the labour market with a specific focus on those neither in employment, nor education and training. Nonetheless, the YEI remains a limited tool as, first, its resources are constrained and largely committed. Second, it follows a reactive approach as funding is only available once youth unemployment is high. Its capacity to respond to the renewed youth employment crisis appears, therefore, rather low. Further, as Member States continue to propose the projects to be supported under the YEI, its ability to provide for mutual learning on youth unemployment is modest. The latter emphasises a recurring feature of the current framework for EU youth employment policy: while the legacy of the euro-crisis has left a set of novel tools, their implementation appears fragmented and their adaptation to the unprecedented challenge of COVID-19 will prove necessary.
With the future Recovery Instrument, the Union appears, however, to have taken a decisive step towards adaptation with youth unemployment among its objectives. The main response to youth unemployment should be triggered through REACT-EU, the recovery instrument’s tool for immediate financial response to the pandemic’s economic effect. The proposal, published in May 2020 and still under negotiations, is supposed to add € 47,5 billion to the ESF and the European Regional Development Fund. Youth employment figures at two key positions in REACT-EU: first, funding is targeted to, amongst others, support for youth employment and, second, its allocation depends also on the level of youth unemployment. However, despite being the future successor to the YEI, no obligation to use the funds on youth employment has been introduced, which might continue the pattern of fragmentation in the Union’s youth employment policy.
Furthermore, over 90% of the additional funding will be spent in 2021 and 2022 under the not yet determined rules of a European Social Fund Plus ((ESF+).Youth employment should remain a specific objective and Member States having a rate of young people neither in employment, nor in education and training (NEET), aged 15 to 29, above the EU average shall be obliged to commit 10% of ESF+ resources to youth employment. However, the 2019 NEET rate should be used to determine the scope of the obligation with only a mid-term review based on 2024 data once the additional funding will be spent. This allows only for a limited adjustment to the upcoming changes in the NEET rate as only 10 countries (see table 2) would fall under the obligation at the wake of the pandemic. In comparison to the YEI, this might even lead to a reduction in flexibility as countries with structurally weak regions with high youth unemployment (e.g. Belgium, Portugal), won’t be obliged anymore to invest in youth employment because their national NEET levels are above the EU average. On the other, we face a need of a stronger commitment to the younger generation. In the end, the new rules will follow, in principle, a more inclusive approach as regards its targets, which, however, might make some categories of young workers in structurally weak regions lose support.
Fighting fragmentation, can we coordinate youth employment policies in the EU?
The second pillar of the tools developed in the euro-crisis to fight youth unemployment on the EU-level is the European Youth Guarantee (EYG), enacted in 2013 by the Council of the Union as recommendation to the Member States. It contains a quality standard for public employment services to young people aged below 25 to provide a “good-quality offer of employment, continued education, an apprenticeship or a traineeship within a period of four months of becoming unemployed or leaving formal education”. Further, the Council adopted subsequent recommendations on quality standards for traineeships and apprenticeships, which, despite non-binding, fill the EYG’s quality standard. Finally, a list of measures for job creation should provide a common consensus on employment subsidies for young people.
At first glance, the EYG resembles, thus, to an EU consensus on youth employment policy. Legally, the status of the EYG is, however, weak as it was adopted as recommendation without binding force and is not based on any formal competence, but only the Council’s power to adopt recommendations. Therefore, and even though Member States had to draw up reports on its implementation, the guarantee’s national enactment is evidence of fragmentation. Spain, for instance (Murcia and Cardo 2013), focussed strongly on employment subsidies for young people, whereas reforms have been more structural in other countries. This status, therefore, considerably challenges its capacity to act as common benchmark for youth employment policies in a time when Europe is in dire need of such a consensus.
Lastly, the Commission proposed in July 2020 a reformed guarantee immersed in the context of the pandemic. The reform would introduce some significant changes, such as an extension of the target group to those below 30. Formally, the new guarantee would find a new legal basis in employment policy (149 TFEU) but maintain its non-binding nature. In general, the consensus on how to create jobs for young people has not become more detailed. This is particularly interesting in the context of the recovery plan as it could limit again the coherence of the response. On the other, the renewed guarantee would strengthen commitment to fair working conditions as they have been challenged by some Member State’s measures on youth unemployment in the euro-crisis and, therefore, caused a source of fragmentation. Finally, the guarantee remains, however, a non-binding tool for the coordination of national policies with the obvious difficulties in assuring a common (and coherent) crisis response.
Where is the way through the pandemic for youth employment policies on the EU-level?
To conclude, the EU framework for youth employment relies on 3 levers: mobility, Union funds and the coordination of national youth employment policies. In times of pandemic, the value of mobility is strongly reduced, while its impact on youth unemployment was already limited previously. Indeed, young labour mobility cannot mitigate unemployment for those who stay in their home countries, for instance, due to their restricted resources. Often enough, movers are young high-skilled individuals, which rather reinforces than mitigates existing inequalities in access to employment. Generally, the EU’s recovery plan should tackle youth employment through funding facilities, while the youth guarantee is conceived as non-binding guidance. Both mechanisms have, however, important difficulties in ensuring a common and coherent response to the crisis and, thus, limit the Union’s capacity to respond to youth unemployment in the context of COVID-19. Therefore, the Union’s framework must resolve two pitfalls to improve its response to the common challenge: its fragmentation and, on the other hand, an adaptation to the issues arising from a renewed youth employment crisis. Indeed, youth unemployment will evolve with time, remain a challenge without invulnerable Member States and, therefore, might need a truly European approach. On the legal level, however, a stronger European response to youth unemployment needs considerable change that ensures, at least, coherence and mutual learning. This does not necessarily imply to construct a new framework but to keep the focus on youth unemployment and to strengthen the existing means in the face of COVID-19.
On (Young) Labour Migration in times of crisis:
Favell, Adrian (2008), Eurostars and Eurocities: Free Movement and Mobility in an Integrating Europe, Blackwell Publishing.
Lafleur, Jean-Michel, and Mikołaj Stanek, eds. (2017), South-North Migration of EU Citizens in Times of Crisis, IMISCOE Research Series, https://www.springer.com/gb/book/9783319397610.
Murcia, Joaquín García, and Rodríguez Cardo, Iván Antonio (2013) ”The 2013 Spanish Youth Employment Plan”, European Labour Law Journal, 4 (1): 77–80, https://doi.org/10.1177/201395251300400107.
Recchi, Ettore and Favell, Aadrian, eds. (2009), Pioneers of European Integration: Citizenship and Mobility in the EU, Edward Elgar Publishing.
On EU Law and the Young Worker:
Votinius, Jenny Julén (2019), “Youth, Labour Law, and European Economic Crisis”, in Bridging the Prosperity Gap in the EU – The Social Challenges Ahead, Edward Elgar Publishing.
On the Pandemic, Youth Employment and the EU Recovery Instrument:
Azoulai, Loïc (2020), “Infrastructural Europe: EU Law and Human Life in Times of the Covid-19 Pandemic”, Revista de Derecho Comunitario Europeo, 24 (66): 343–59.
European Commission, ‘COM(2020) 277 Final – Proposal for a Council Recommendation on A Bridge to Jobs – Reinforcing the Youth Guarantee and Replacing Council Recommendation of 22 April 2013 on Establishing a Youth Guarantee’
European Commission, ‘COM(2020) 451 Final – Proposal for a Regulation of the European Parliament and of the Council Amending Regulation (EU) No 1303/2013 as Regards Exceptional Additional Resources and Implementing Arrangements Under the Investment for Growth and Jobs Goal to Provide Assistance for Fostering Crisis Repair in the Context of the Covid-19 Pandemic and Preparing a Green, Digital and Resilient Recovery of the Economy (REACT-EU)’
European Council, ‘Conclusions – Special Meeting of the European Council (17-21 July 2020)’