OECD: Europe Must Act To Stop Youth Jobs Crisis

PARIS (Anna Maria Jakubek) - Europe must invest in jobs for young people despite the reigning climate of austerity or risk long-term consequences for growth and competitiveness, an international panel of employment experts said on Tuesday.

With youth jobless rates across the European Union averaging an alarmingly high 20 percent, governments need to fight the trend by stimulating growth, creating jobs and training youths, said the researchers from the Organisation for Economic Co-operation and Development (OECD).

Jobless rates among young people vary widely across the 27-member bloc, rising as high as 45 percent in Spain in the second quarter versus 7 percent in the Netherlands.

Some countries, including the Netherlands and Germany, have kept youth unemployment low thanks in part to apprenticeship and mentoring programs which the OECD said should not count as spending items in national budgets.

"It's an investment for the present, an investment for the future, so I think that while we are thinking about where to cut, we have to bear this in mind," said Stefano Scarpetta, deputy director of the OECD's employment division, speaking at a two-day conference at the Paris-based body.

Not only do governments need to increase benefits for the unemployed, but they should also help to reintegrate jobless youths into the labor market by helping them look for jobs and training them to work in new sectors, the panel said.

"This should not be just passive income support and then the young person stays at home waiting for a job to come," Scarpetta said.

High jobless rates have dogged Europe for decades. But youth unemployment has emerged as a particular concern during the European debt crisis as companies in countries with high labor costs eschewed making new hires.

While overall EU unemployment hit 9.8 percent at the end of October 2011, the rate for youths has risen at a much faster pace, to 22 percent in October 2011 from 16 percent in 2007, according to the European Commission.

The struggle to find jobs was not confined to the unskilled and poorly educated, the panel said.

"People with higher education are just not getting jobs, and we can't allow that sort of waste of the investment in education skills to start to evaporate away in terms of hopelessness, frustration," said John Evans, general secretary of the OECD advisory on union issues.

Copyright 2011 Thomson Reuters. Click for Restrictions.