by Augustinas Bilota , Šarūnė Janutaitė , Donata Keršytė , Aistė Rimgailaitė , Viktorija Vosyliūtė
It is believed that good education can help to get a good job position. However it is not enough. A lot of people in the world are facing the problem of being unemployed. This problem especially shows up in youth lives. As Angela Merkel highlighted “youth unemployment is most pressing problem facing Europe“(2013). According EUROSTAT (2012), youth unemployment rates are way higher than unemployment rates for all ages. In 2012 it reached an average of more than 22%. We could suggest some ways of solving this problem.
To begin with, it is expected that innovative and unique ideas of young people should be encouraged and implemented. The biggest problem that young entrepreneurs face is lack of finances, lack of knowledge and high tax rates. A great example is UK, where government gives start-up loans. Its’ idea is a governments funded scheme which provides loans and mentors for young entrepreneurs. In order to help enterprises to survive, government could reduce tax rates for first 3 years of operating in business. Since, about 50% of newly established enterprises go bankrupt in first 5 years in EU (European Commission Enterprise in Industry, 2011). Our suggested models could help to reduce the pressure of financial problems, increase level of knowledge and experience and decrease possibility of bankruptcy.
Employers’ think that inexperienced, post graduated employees are not beneficial in work environment. If government would encourage employers by funding part of salaries, it would be beneficial for both, employer and employee. Training programs could be conducted providing experience in specific field for employees, while companies could recruit young people at lower costs. At this point we should pay attention to SMEs which are a major source of job creation across the EU. “Youth opportunities initiative” (2011) took action in 2007-2013 by giving funds for SMEs to support job opportunities for young people. Continuation of this program would encourage SMEs to recruit young people and attract bigger companies to this issue.
Universities and higher education institutions also play an important role in forming youth’s approach to be competitive in labor market. These institutions should encourage flexibility while combining studies and job possibilities. Students have to gain some work experience not after graduation but during first study years. Therefore, internship programs should be longer and have a bigger importance in education. If those internship programs could be implemented outside students’ home countries it would be even more valuable because of easier integration in labor market, improvement of language skills, competitiveness, creation of stronger partnership network, as well as developing knowledge of technologies. As the core idea we could quote President of European Commission, Barroso, “We need to create a European labor market, and make it as easy for people to work in another country as it is as home.” This is a goal to be followed by educational institutions, government and EU support.
Implemented in a right way these proposed models and ideas would have a positive impact on this pressing issue. This would lead to drop in youth unemployment rate in EU, increase in number of entrepreneurs and successful young people integration in labor market. UK start-up loans example helped to decrease unemployment rate and employ more young people.
I’m skeptic about your proposal of reduced taxes for companies in the first 3 years. Companies go bankrupt because:
-Their business model is not viable
-It is viable but poorly executed
-Bad luck
The first two cases cannot be helped with reduced taxes, but can be helped with mentoring and better teams.
Today when less and less companies care to train recently graduated new employees it may be a good idea to have longer internships during university.
I’m also pessimistic about the mid-term outlooks regarding employment. I think since 2008 a lot of people are saving more and spending less, also the general population is aging rapidly, which also means less spending. Less spending means less demand. Less demand means less work.