No Future to Risk? The impact of economic crises and austerity on the inclusion of young people within distinct European labour market settings

Abstract

The imposition of austerity measures on global labour markets already severely damaged by economic crises is estimated to have increased global unemployment levels by 202 million with 5.9 million jobs being lost in Europe since 2008 (ILO, 2013). (O'Higgins, 2010). Young people have born the brunt of a heavily depleted and debilitated European jobs market (Carlson, 2013;Dicken, 2007). In 'liberal competitive' employment and welfare settings such as the UK this has been exacerbated by deterioration in working conditions and withdrawal of employment rights over the previous two decades (Hogarth, 2009; Hurley, 2011; Kompier, 2009; Kersbergen, 2012). For young people at the margins of European Labour markets the lived experiences of crises and austerity are often defined by personal despair, deterioration in mental and physical health, and the perception of a hopeless future. In the UK these brutal realities have recently been documented in a major survey carried out by The Prince's Trust (2014). The survey found that more than three quarters of a million young people between the age of 16-25 believe they have nothing to live for-, with 40% of young people suffering devastating- symptoms of mental illness- including suicidal thoughts, self-loathing and panic attacks as a direct result of unemployment. With nearly one million young people who are not in employment, education or training and 430,000 young people facing long term unemployment the situation is critical in the UK. (The Prince's Trust Macqarie, 2014) These findings are echoed by 'The World of Work Report' (2012) which found that fiscal austerity and labour market reforms across Europe have had devastating consequences for employment while mostly failing to cut deficits, and warned that governments risked fuelling unrest unless they combined tighter spending with job creation. Lower employment levels, higher unemployment, more marginally attached workers and growing levels of underemployment pervade the lived experiences of young people (between ages of 16 and 25) across a number of European societies. (OECD,2013; ILO, 2013). The combined impacts of a labour market increasingly permeated by precarious, poorly paid, unstable jobs and reductions in public and welfare expenditures has exacerbated levels of poverty and marginalisation endured by young people across a number of European societies. . In particular, the growth in the number of part-time, temporary jobs and the alarming rise of zero hour contracts have deepened financial and personal insecurity for young people particularly within competitive labour markets such as the UK. (Bell, 2013). Concern with these developments resonates in recent communications from the EU Commission with a call for increases in job opportunities for young people as a priority which should not be achieved at the cost to 'lower job quality and increased levels of insecurity'. Launching the Youth Guarantee scheme in December 2012 the EU urged member states to ensure that all young Europeans have access to good quality employment, continued education, training or an apprenticeship with four months of leaving school or becoming unemployed.(EU, 2013). Drawing upon evidence from the UK, Greece, Netherlands, Germany, Denmark, Sweden, Finland, Scotland and Norway this chapter comparatively analyses the impact of austerity and social investment strategies specifically designed to enable young people to enter, strengthen and sustain their position within the labour market. Adopting a 'Varieties of Capitalism' approach the chapter examines evidence relating to the experience of young people within distinct labour market settings and welfare settings. (Kitschelt, 2012). Following the Varieties of Capitalism approach distinct labour market and welfare settings are considered in terms of the dichotomy between liberal competitive and coordinated cooperative market economies. (Hall, 2001). Liberal competitive labour market settings are characterised by flexible labour market arrangements underpinned by the rationale that the efficient working of the market relies upon flexibility and the de-regulation of social, employment and labour market policies. In contrast coordinated labour market settings are characterised by cooperative arrangements characterised by a commitment to the protection of workers against structural inequalities arising from the operation of the market. Integrated services and programmes involve both employers and state. Importantly, in cooperative labour markets both employers and employees share the costs and future benefits of investments in integrated services such as education and training and more targeted labour market programmes. This level of integration is of particular relevance to the quality of provision available to young people from disadvantaged backgrounds as programmes compensate for social exclusion and often lead to permanent employment. In addition, coordinated cooperative labour markets are usually characterised by more generous social protection provision. As this chapter will reveal this dichotomy of labour market and welfare arrangements becomes very significant when applied to the outcomes for disadvantaged young people within Europe. In particular whilst the level of investment in education, training and active labour market policies in coordinated cooperative labour markets is found to be of significance for young people at the margins of European labour markets of equal significance is the level of integrative capacity of these investments in terms of the relationship between work, education and training. For example apprenticeship systems which involve a substantial commitment between employers and the state involving the completion of full professional qualifications are found to have long term value for the individual, the economy and society. The impact of austerity and distinct labour market arrangements on inequality and the stratification of social risks are also addressed within the chapter. In particular, it is argued that in liberal market economies such as the UK characterised by the dominance of the market, financial services and individualism there is a growing 'tension between social protection measures and economic competition'.(Hays, 2005 p. 7). This tension exacerbates the feedback loop between socio-economic conditions of the stratification of life chances and social risks and economic inequality. Using this theoretical approach and a framework for understanding youth transitions within distinct youth employment and welfare systems (Figure 3), the chapter critically evaluates the impacts of austerity and social investment measures upon employment outcomes, inequality and the social stratification of social risks for young people at the margins of European labour markets as they undertake transitions between education and employment within 'liberal competitive' and 'coordinated cooperative employment and welfare settings'.