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Coronavirus ‘class of 2020’: Europe’s lost generation?



PRAGUE (Reuters) – When Dunia Skaunicova studied media marketing at Prague Metropolitan University, she quickly found a dream job at a startup in the Czech capital, where companies were struggling to attract multilingual graduates.

Dunia Skaunicova, a 24-year-old job seeker, checks her cell phone while waiting for a yoga class after the outbreak of Coronavirus (COVID-19) in Prague, Czech Republic, on July 8, 2020. REUTERS / David W Cerny

Months later, however, she suddenly found herself looking for work after losing her job when the coronavirus pandemic hit the Czech economy. This time she is fighting.

The pandemic has deprived many young Europeans of the first stage of employment, a situation that economists believe has the potential to affect their long-term employment and income prospects.

“I’ve personally attended five or six interviews in the past two months, but it’s more of a casting because there are so many people,” said Skaunicova, 24, who speaks Czech, English and French and is looking for a job as a marketing manager.

“You will invite several people for the same hour, and then you just sit there waiting to be called,” she said, adding that she has had many more interviews online so far, to no avail.

Youth unemployment has plagued Europe for a long time, continued after the global financial crisis of 2008/09 and hit southern countries such as Spain and Greece particularly hard.

However, the first signs show that the situation will deteriorate.

While the unemployment rate in the EU rose by only 0.1% to 6.7% month-on-month in May – a moderate increase thanks to holidays and short-time work – unemployment among the under-25s rose three times as quickly by 0.3% to 15.7%.

A major challenge is the fact that youth unemployment correlates to a large extent with economic growth: the greater the overall economic success, the more young workers are involved.

Before the outbreak of the corona virus, the Czech Republic had the lowest youth unemployment rate in Europe after a sustained economic upswing, at just under 5%. In the year to May, however, unemployment among 15- to 24-year-olds rose slightly more than half to 34,000.

Dennis Tamesberger from the Chamber of Labor in Linz, Austria, tracks unemployment among young people across Europe and predicts that the youth unemployment rate in the Czech Republic could more than triple to 16% in 2020.

Even short stays without work at a young age can affect a person’s long-term prospects, says Tamesberger, who warns that the consequences of the rising youth unemployment that Europe is currently facing could last for a generation.

He points to a study by the London-based Center for Economic Policy Research that shows that one month of unemployment between the ages of 18 and 20 causes a lifetime income loss of 2%. Tamesberger says that prolonged bouts of unemployment at a young age increase the likelihood of future unemployment because people do not acquire the skills and experience needed to keep up in the job market.

“Periods of unemployment in adolescence can have a negative impact on later life, which justifies the tenure of a lost generation,” said Tamesberger.

SKEWED MARKET

The Resolution Foundation’s London-based think tank examined three decades of UK economic data to draw similar conclusions.

It turned out that British youth who left school at the height of the 2008/09 economic crisis continued to have higher unemployment rates than those who left with similar skills four years later, despite the recessionary employment boom.

With the UK Department of Household Responsibility forecasting that the UK unemployment rate will reach 10% in the second quarter of 2020, the Modeling of the Resolution Foundation predicts that the chances of a low-skilled school-leaver to work in three years have been reduced by one One-third.

“The ‘Corona Class of 2020’ could face reduced wages and limited employment prospects for years after the end of the current economic storm unless additional support is provided quickly,” said study author Kathleen Henehan of the Resolution Foundation.

Youth unemployment across Europe took years to recover from the financial crisis and remained around 30% in countries like Spain and Greece – a number that Tamesberger and others predict could now rise to 45%.

Part of the problem is that the European labor market is already targeting new entrants, who often do not have the secure, open-ended contracts of their older colleagues, and are therefore “last in, first out” for layoffs.

The coronavirus pandemic has created new hurdles as sectors that typically enable young people to take the first step on the ladder – retail and hospitality among them – are most affected by social distancing measures that could take months.

This applies in particular to Spain, which is dependent on tourism. The new teacher Amalia Bragado, 25, had been hired as a monitor in a summer camp for children in the seaside town of Sanabria in Castile and León in northwestern Spain, where she had worked last year. However, the job was canceled.

“We will not have camps – or at least there will not be the usual ones, we still do not know what will happen,” said Bragado from the Castilian city of Zamora.

TRAINING FOR EVERYONE?

For Bragado and others facing months of uncertainty and loss of income, it is now up to political decision-makers to prevent a worse wave of youth unemployment than after the 2008/09 crisis.

“Even in the best of times, getting on the career ladder is a challenge. And these are not the best of times, ”said Valdis Dombrovskis, European Commissioner for Economic Monitoring, in a briefing on the EU’s political response.

The EU urges governments to use existing EU funds to create jobs and train young people. Investments are estimated to be at least € 22 billion to close structural skills gaps in labor markets like Spain.

“There are very few young people who are trained in VET systems with real job opportunities and there are many overqualifications with degrees that are not required by the market,” said Ignacio Conde-Ruiz of the Spanish think tank Fedea.

In the UK, an economic stimulus package presented by the Treasury Secretary on Wednesday included a £ 2 billion ($ 2.5 billion) fund to create six-month jobs for unemployed 16-24 year olds and more government-funded apprenticeships.

In the meantime, competition is tough for those who struggle for fewer job openings. They describe search queries that don’t require companies to respond, or they tell applicants not to expect much from wages or benefits.

“There are applications or jobs that are open for about three or four months and you can see that hundreds of applications have been submitted,” said Joseph Petrila, a 23-year-old American who recently graduated from Anglo-American University in Prague and is looking for a job as an economic researcher.

While young workers like Petrila struggle to get their feet in the door, companies in the Czech Republic that have long had difficulty hiring new people are benefiting from an increase in applications.

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This could allow them to lower wages and improve their bottom line if they try to overcome the effects of the pandemic. For school leavers and new graduates, however, this means that landing your first job requires a whole new level of determination and preparation skills.

Blake Wittman, European director of recruitment agency GoodCall, said a company in Prague had informed him that applications for job vacancies had increased from around 5 to 10 before the pandemic to up to 50 to 100 current job vacancies.

“Every open job is gold and that’s how people behave,” said Wittman.

Additional reporting from Kristyna Jandova in Prague; Belen Carreno and Paola Luelmo in Madrid; Mark John in London; Edited by Mark John and Susan Fenton

Our standards:The Thomson Reuters Trust Principles.

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