Project To Strengthen Trade Union capacity in Tripartite dialogue. Analytical report The ways to tackle youth unemployment problems in Latvia

Transcription

1 Project To Strengthen Trade Union capacity in Tripartite dialogue Analytical report The ways to tackle youth unemployment problems in Latvia January of 2013

2 According to the latest data available in Eurostat, the youth unemployment rate among 15 to 24 years old persons was 31.1% in the 3 rd quarter of For comparison in EU-27 countries youth unemployment rate was 22.6% in average, in Lithuania 27.5%, but in Estonia 19.5%. As you can see, Latvia has the highest youth unemployment among the Baltic States and its youth unemployment can be comparable only to such EU countries as Ireland, Italy, Slovakia and Portugal. In addition to that we can observe a dangerous trend in youth unemployment rate in Latvia since the 4 th quarter of 2011 it has a tendency to go up again, because then this rate was only 27.6%. Especially high unemployment is in age group years, where 63.9% of young people have no job (in EU-27 it s 28.4%) and in age group years 26.5% (EU=20%). One could say that many young people are not supposed to have a job, because instead of that they have to attend a school or study. But the statistics show that the situation is still bad in Latvia, even if we exclude those, who should be studying Eurostat is calculating such parameter as NEET (rate of young people not in education and not in employment). In 2011 NEET in Latvia was equal to 15.7% for age group years, and it was substantially higher than in EU-27 (12.9%). At the same time State Employment agency of Latvia has announced that young people aged altogether make only 11.2% of all registered unemployed persons in Latvia. This means that Latvian youth has not the biggest problems with unemployment, because people right before the pension age have the highest unemployment rates. Well, I would say that it is a very poor relief to hear that, because we should really care and worry more about the young people, because if we don t find a good and fast solution for them, they will find it themselves and most probably it will be an emigration. According to data provided by State Employment agency of Latvia, 87% of young unemployed persons are aged 20-24, 68% have no or very low professional qualification level, 22% have attained the vocational education, 9.8% have attained the highest education and 40% have a previous experience at work. The average length of the unemployment period for young people is 4.7 months, for people with the highest education it s 3.5 months. We as trade unions see the main reasons for youth unemployment in Latvia as following: Lack of jobs, especially in regions (outside our capital city) Insufficient, inappropriate or interrupted education Lack of professional skills and work experience Questionable quality internships and traineeships Low representativeness of young people in trade unions Preference to precarious job instead of a legal job. The tackling of youth unemployment problems is so critical, because first of all we must prevent negative consequences: loss of self-confidence, knowledge and skills (especially in case of long term unemployment); illegal employment, precarious jobs, violation of labour rights; poverty, crimes, emigration, loss of workforce. Additionally we must promote positive consequences: higher employment gives more income to people, which accordingly ensures faster economic growth, creates new entrepreneurs and gives more new jobs for the rest of the society. Higher employment ensures also more stable and sustainable social protection system, which is based on the solidarity of generations. There have been several discussions on this topic inside trade unions and here are just some of the ideas of what should be done to increase youth employment and tackle unemployment:

3 Progressive changes in education system study programs must better comply with labour market s requirements Wise choice of study program what s really required in the labour market now and what will be required in the nearest years? Freely accessible statistics and forecasts on labour market development Good quality, targeted internships and traineeships Analyses of graduates successes in the labour market Employers participation in creation of customized/ fine-tuned study programs Enhanced role of vocational education and training Improved, more efficient active labour market programs Smarter tax policy (lower tax burden on low income receivers) Economic growth, supported both by private and public investments Higher involvement of young people in trade unions. Implementation of dual vocational education in Latvia, by using the best German practice and knowledge. On the 14 th of November, 2012, which was declared as an Action day by ETUC, representatives of LBAS Youth council visited the speaker of Latvian parliament Solvita Aboltina and submitted to her a list of proposals related to youth employment. Those proposals were divided into 4 parts: What is necessary in the labour market? (high quality and freely available information on the demand in labour market now and in the near future), What job is the most appropriate for me? (career education, starting from the primary school), What can I do to get the job? (compliance of study programs and requirements in the labour market), What is the financial motivation for employers to select young people as their new employees?. Letters with similar content were sent to other responsible state institutions and ministries as well. We received the most complete answer from the Ministry of welfare, which explained the current situation, introduced with the current government s actions to promote youth employment in Latvia and proposed to arrange a common meeting on all these issues. Now Free Trade Union Confederation of Latvia (LBAS) has decided to go one step even further and there is a plan to organize a special discussion on this topic in March this year, by gathering together all involved stakeholders (LBAS, Employers Confederation of Latvia, Latvian Students Union, Ministry of welfare, Ministry of education and science, Ministry of economics). According to the official statistics, the problem of youth unemployment is very acute not only in Latvia, but also in several other EU countries, therefore the European Commission has taken specific steps to tackle this problem. The first step was taken by approving The Employment package in April of In its Employment Package the EC called for the active mobilisation of Member States, social partners and other stakeholders to respond to the current EU employment challenges, and in particular to youth unemployment. The Commission emphasised the major job-creation potential of the green economy, health and social care, and ICT sectors, and to this end issued three accompanying action plans for follow-up. The Employment package included several measures to tackle the unemployment in general, but it was already then clear that youth unemployment required specific measures, which should be described in a separate Youth unemployment package. This package or officially COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE

4 REGIONS Moving Youth into Employment was published on the 5 th of December, This document admitted that the youth unemployment rate at 22.7 % in the 3 rd quarter of 2012 was twice as high as the adult rate, and there were no signs of improvement. Beyond the immediate effects of the crisis, structural problems in the education system and in the labour market have been making the transition from school to work long and difficult. Young people have been in a more difficult situation than adults for too long a time. Being unemployed at a young age can have a long-lasting negative impact. In addition to higher risks of future unemployment, these young people are also at a higher risk of exclusion, of poverty and of facing health problems. Effective remedies are urgently needed. In 2011 the European Commission adopted the Youth Opportunities Initiative (YOI), prompting the EU and Member State actions to improve youth employment. EU Structural Funds were mobilised to increase support for youth and financial resources for policy measures and investment projects were funded. Young people face numerous problems on their way from education to work. In many countries, ineffective labour market regulation or poorly functioning institutions make it more difficult for young people to find a stable job. Too many are left without help if they drop out of school or have difficulty finding a job. More favourable labour market outcomes can be observed in countries where a higher proportion of students undertake quality traineeships or work placements as part of initial education and training or in countries with well-established apprenticeship systems. The EC admits that there are significant skills mismatches on Europe's labour market. Many young workers hold formal qualifications above those required by the job they are able to get (underemployment), but at the same time their skills are less likely to be the right ones (matching rate) compared to older workers. Even highskilled young people are now increasingly affected by long-term unemployment. Despite the crisis, there are over 2 million unfilled vacancies in the EU, often because there are no workers with the required skills in the local job market. Many Member States, including Latvia, have taken action to boost youth employment, developed youth employment plans, education and training programmes million EUR from Latvian state budget has been allocated to implement European Social Fund activities on youth competitiveness and employment. Unfortunately, not all these activities have been very effective, and that has been concluded not only by trade unions, but by employers as well. For example, the training programs are not always suitable to the local (regional) labour market. What s the point in teaching office and computer typing skills, if there are no offices in the area? Another problem it s not allowed to choose several training programs for one person, even if it s really necessary for the job. The trainees don t have a basic health test before the start of training program simply to understand, if the specific job is physically appropriate for them. If the candidate fails in the health test afterwards, one can surely say that the training and invested money was pointless. State Employment agency of Latvia offers several training programs and activities for young people, who are unemployed, but there are no programs for those, who are going to graduate or leave the school. The European Commission has selected Youth guarantee as one of the main measures how to tackle youth unemployment in all EU Member states. Therefore the EC has issued a special recommendation on implementing the Youth guarantee in all EU Member states. A youth guarantee means that all young people up to the age of 25 years receive a good-quality offer of employment, continued education, an apprenticeship or a traineeship within four months of becoming unemployed or

5 leaving formal education. A funding for such program would come from ESF and Cohesion fund. A Youth Guarantee contributes to three of the Europe 2020 strategy targets, namely that 75 % of the age range should be employed, that early school-leaving rates should be below 10 %, and that at least 20 million people should be lifted out of poverty and social exclusion. The Youth Guarantee should be implemented by a scheme consisting of supportive measures, and should be geared to national, regional and local circumstances. These measures are based on six axes: building up partnership-based approaches, early intervention and activation, supportive measures enabling labour market integration, use of EU Structural Funds, assessment and continuous improvement of the scheme, and its swift implementation. LBAS fully supports the Youth Guarantee, because it would help not only those, who are already unemployed, but also those who face a real risk of becoming unemployed right after they have graduated or left a school. Latvia has a high rate of early school leavers and we don t help them immediately, we can lose them forever (they are the most real candidates for emigration to get precarious job abroad). If we take into account also the fact that study programs very often don t comply with demand in the real labour market, it makes the whole situation even more dramatic. Therefore it was a very unpleasant surprise to receive a project of the Latvian national position on Youth Guarantee, which stated that Latvia has a very reserved attitude towards Youth Guarantee, because there are several other ways and measures how to ensure jobs for young people. In February of 2012 after a demand of our prime minister a special action group was created to prepare proposals to improve youth employment in Latvia. Unfortunately, nobody from trade unions was invited to participate in that working group. The working group produced some valuable proposals, but only few of them are in the implementation process. The national position on Youth Guarantee mentions several training programs for young unemployed persons provided by State Employment agency, but as was noted already in this report, none of those programs help the school graduates. Ministry of welfare has made calculations, according to which Youth Guarantee in Latvia would cost 8.5 million Latvian lats (12 million EUR), but it s not clear, whether that is a total sum of money necessary to implement Youth Guarantee or just a value of Latvia s investment (without EU funding). Apart from Youth Guarantee, the EC has proposed some additional initiatives to boost youth employment: Quality Framework for Traineeships, European Alliance for Apprenticeships and Mobility for young people. LBAS is a supporter of the first two initiatives, because it s really necessary to provide youth with good quality traineeships, apprenticeships and internships there is no better way to get work experience, and we know that without work experience it s very difficult to get a job and start your career. In Latvia there are several problems related to traineeships and internships it s very difficult to get the information on available traineeships and internships, not every study program require an internship, young people tend to choose the internship, which is not closely related to their interests and study program (because of lack of them). Trade unions would like to change this situation in Latvia, by requiring that internships are mandatory in all study programs, including those which teach social sciences (like economics, law). At the same time we should be very careful with initiative called Mobility for young people. For sure, we should support exchange of students among EU countries, but in case of Latvia the mobility usually means emigration one way emigration. And certainly we should eliminate any risks of brain drain, especially if it involves young people, who have attained some level of education already (paid by the state budget at least partially) and who

6 should be the basis and engines for the new Latvian economy. If they emigrate without a proper education, most probably they will get a precarious job with little satisfaction and relatively small remuneration. It is clear that we can t solve any problem without a good cooperation among all involved stakeholders. It s true also in this case the government alone or trade unions, employers alone can t reduce the level of youth unemployment significantly. Therefore LBAS has asked for several times the involved ministries to ensure a much better cooperation among them, avoiding the situations when one ministry blames the other ministry or tries to escape responsibility. The government should always involve its social partners in the process as well so that employers and trade unions may come with their expertise and even participate in the training process of unemployed persons.