Promoting Youth Employment:
Policy Lessons from a Trade Union Perspective
A TUAC Discussion Paper Submitted to the
OECD/UK Ministerial Conference
On Youth Employment
London 8 - 9 February 2000
Executive Summary
1. Persistent unemployment in many OECD countries and growing insecurity
across most of the OECD remain social time bombs. But the persistence of
youth unemployment is particularly grave. It represents a waste of the
most precious resource - the ingenuity and dynamism of young people and
is a direct threat to social cohesion.
2. The decline of youth unemployment in some countries is welcome. However,
levels of youth unemployment remain far too high.
3. The fight against youth unemployment is therefore a challenge confronting
both governments and the social partners. Workable responses to this challenge
mean that policy initiatives have to move beyond the simplistic ideas of
the past based on reducing relative youth wages, cuts in benefits and coercive
measures to force young people into jobs. Any short-term gains from following
this path would only risk long-term problems. The solution lies in a concerted
approach between governments, trade unions and employers. Each have different
roles and responsibilities, but new approaches are needed for new times
founded upon a comprehensive strategy of demand and supply side measures,
including:-
- The implementation by OECD authorities of co-ordinated strategies
to support balanced demand, global growth and job creation. Youth unemployment
is directly related to economic growth;
- “Joined up” action by both Education and Labour Ministers so as to
integrate policies around lifelong learning and active labour market policies;
- A combination of increased family support and early intervention in
measures such as targeted job creation, employment subsidies, job search
assistance, individual counselling, with enhanced pathways between education
facilities and the world of work;
- The active involvement of participants themselves, trade unions, business,
local authorities, public employment services, and community groups in
the design, implementation and monitoring of such programmes.
Unemployment: A Global Challenge
4. More than 33 million people remain unemployed across the OECD with
many more underemployed. The economic recovery remains fragile.
5. OECD countries bear a particular responsibility in developing an
effective policy response to restore world-wide demand led growth and job
creation and to lift the spectre of crisis, especially for developing countries.
Macroeconomic measures aimed at expansion must be underpinned by a new
global financial architecture, and accompanied by increased financial support
for social safety nets in those countries in the front line of the crisis,
with debt relief and write-offs for the poorest developing countries.
TUAC welcomes the OECD-UK Conference on Youth Employment
6. TUAC welcomes the decision made by the OECD and the UK Department
of Education and Employment to organise a focused policy discussion among
Ministers on issues related to the transition from full-time education
to the labour market and on policies aimed to promote youth employment.
The current climate requires the broad and clear thinking that such a conference
can bring to address the problems faced by young people when entering volatile
and insecure labour market. The contributions made by academics, labour,
business representatives and policy makers to the 1999 OECD-United States
Washington Conference on youth employment provide a good starting point
to develop the required responses in the fields of economic and employment
policy, labour market, education and training.
7. The youth unemployment challenge facing us today is a daunting one.
Estimates suggest that at current more than 10 million young people are
unemployed across the OECD. The economic, social and psychological consequences
of that are potentially devastating. The effects go beyond lost output
to include unmeasurable ones such as that posed by social exclusion and
the marginalisation of large numbers of young people from society itself.
Poverty and unemployment feed off each other and combined lead to a potential
time bomb. In such circumstances, democracy itself and the political process
that many take for granted could also become casualties. Extremist parties
and groups are ever willing to offer an alternative, however abhorrent,
to societies, which have rejected young people.
The Need for a Comprehensive and Integrated Approach
8. The Conference provides an opportunity to learn the lessons of the
past two decades of what does and does not work in dealing with youth unemployment.
A TUAC statement to the 1977 OECD youth unemployment conference stated:
“it is important to recognise that all these problems can only be tackled
in the context of an overall employment strategy”, based on “a more comprehensive
and integrated approach”. The necessity of such an approach was underlined
by warnings of the statement against efforts “to isolate youth unemployment
as if it were independent of the overall employment position”. To implement
isolated measures “would not only reinforce the impression that (young
people) represent a marginal group, but also run an unacceptable risk of
merely switching unemployment between groups.”
9. One key lesson is that many policy makers were misguided by implementing
restrictive monetary policies along side coercive supply side labour market
policies as a panacea for unemployment in general and youth unemployment
in particular. Experience has shown that a sustained high level of economic
activity is a precondition to increase the demand for labour and thereby
lead to durable reductions in youth unemployment. Such an environment would
also help to create sufficient numbers of quality jobs needed to sustain
developed economies, while helping emerging and transition economies to
develop in a balanced way.
10. Cutting youth wages provides no solution. Minimum wages and youth
entry wage levels have fallen both relatively and absolutely across the
majority of OECD countries over the last two decades. Despite this, the
gains in terms of increased youth employment have not matched the expected
outcomes. Trade unions have made tough choices here both in terms of negotiated
or legally determined minima and in the negotiation of training wages.
As such, existing pay systems in general now take sufficiently into account
productivity differentials between both young and older workers, either
due to a seniority system or due to skill related wages and pay. Policy
makers need therefore to revise their policies in light of experience and
where necessary take countervailing action. Young people don’t want any
job however bad they want a decent job with prospects of advancement as
the ILO has said “Decent Work”.
11. Deregulated labour markets have a cost. This can be seen in terms
of increasing insecurity and inequality at the work place. In turn such
policies
have undermined social cohesion and further undermined the ability of companies
and countries to innovate and to develop competitive advantages based upon
human capital investment. Future competitive advantage will lie with those
countries that have strong social cohesion built on education and training,
health care and a sound industrial relations system. Within this, the most
successful countries will be those that are able to balance and rebalance
the market pressures of flexibility and dynamism with the social pressures
for security and dignity.
Integrating Different Government Agencies To Develop And Deliver
Youth Employment Programmes
13. In many OECD countries there is excessive segregation between the
bodies responsible for designing and delivering programmes. Experience
shows that programmes work best when the bodies charged with their delivery
co-ordinate their activities. Moreover, such co-ordination should go beyond
traditional thinking to incorporate agencies, for example, dealing with
family support measures and education. This would require new thinking
and co-operation between Labour, Education and Social Ministers so as to
integrate family support measures, policies around lifelong learning and
active labour market policies to include:-
- Targeted employment measures. These are meaningful instruments
to tackle youth unemployment, and particularly important for those young
workers who are in danger of becoming permanently detached from the labour
market. A fruitful avenue for this may lie in expanding the social economy.
Measures to fulfil unmet social and environmental needs could be an important
source of employment for the young. The 1999 European Union Employment
Guidelines in this area would be a useful model for others to follow. Several
national programmes have already been put in place: the UK’s New Deal,
the creation of “emplois-jeunes” in France, and the German project to reduce
youth unemployment. Such measures could also include employment subsidies
to help reintegrate young unemployed workers into the labour market and
to give them a foot hold onto the world of work more generally;
- Experience shows that job search assistance, job clubs and individual
counselling play an important role in helping the young unemployed to find
work. Such assistance though should be on a voluntary basis, and reach
out to the young unemployed, rather than be of a coercive nature;
- Whatever the mix of policies adopted at the national or local level
it is important that they gather widespread support. This would require
requiring the active involvement of the young unemployed themselves, trade
unions, business, local authorities, public employment services, and community
groups in the design, implementation and monitoring of such programmes.
13. Irrespective of whether education and training are integrated
into a wider policy framework, they represent essential preconditions to
enable young people to enter the labour market. But they must go beyond
the development of skills and the ability to adapt to changing demands
of employers. Education and training must also contribute to the personal
development and the appropriate integration of young people into society.
Moreover, they must enable young people to develop a lasting capacity for
the renewal of vocational skills and to keep pace both with a changing
knowledge base and technological change. As such, specific education measures
are necessary to assist in improving employment opportunities:-
- Inequalities in education, which often start at pre-school
level and continue throughout all levels of education, must be eliminated.
Equal access to education must be ensured for all;
- Young people from disadvantaged families must be ensured to reach
the required levels of education and training to get access to employment;
- The number of young people leaving the school early without basic
literacy and numerically skills necessary must be reduced, the quality
of both school and education systems must be improved.
14. Vocational training has a central role in promoting youth employment
and to ease the transition from school to work. Indeed, the evidence suggests
that highly developed vocational training systems contribute to higher
youth employment . Across the OECD a plurality of systems exist to
deliver vocational training. When measured against each other most findings
indicate that those countries with well-developed two tier vocational training
systems, linking both school and shop floor training have performed better
than other countries. Similar findings apply also to gender differences
of unemployed young people; where functioning vocational training systems
are put in place the gap between young unemployed women and men is more
narrow. While it would be unrealistic to expect all countries to adopt
a single system, best practice should nevertheless be taken and adopted
to national circumstances. This could include, for example, the development
of quality work experience for the schooling system.
Investing in Human Capital and Modernising Work Organisation
- Contributions of Business and Employers
15. When the hype over the “new economy” and the “dot.com phenomenon”
has calmed it will become clear that in a knowledge-based economy competitiveness
will be increasingly determined by the extent to which governments and
business invest in skills development. Too many view expenditure in this
area as a cost and not as an investment. On the one hand while many governments
are looking toward the market to take over their traditional role, market
participants are withdrawing from their responsibilities. Trade unions
are playing a leading role in this area through the negotiation of innovative
collective agreements that prioritise work place education and training.
However, trade unions cannot alone deliver the necessary skills revolution
required to make the transition to a truly knowledge-based economy. That
will require a partnership approach where all actors work together. TUAC
would challenge governments and business to deliver on their social responsibilities
in this area.
16. TUAC would repeat that challenge over the need to adapt and modernise
the organisation of workplaces, in accordance with the increasing skill
demands of workers, and the requirement of ever shorter product life-cycles.
The modernisation of work organisation in close co-operation with workers
and their trade union has become a prerequisite to boost productivity and
competitiveness.
Strengthening Equal Opportunities and Social Justice
17. Attempts to reduce youth unemployment must go hand in hand with
efforts to reduce the gap in unemployment rates between women and men.
The stereotypes of “feminised professions” must be changed to allow far
greater integration of young women as well as young men into broader economic
sectors. To promote equal employment opportunities and to increase the
participation of women in the labour market a re-design of family friendly
policy approaches is required.
