Youth Unemployment Across Europe

Germany the clear winner in the struggle to create jobs for the young.

Saturday 10 September 2016 16.00 BST

The eurozone crisis has revealed economic faultlines across the bloc, as it has become clear that some countries have fared better than others in the straitjacket of euro membership.

Those differences are laid bare in unemployment figures that show the wildly differing prospects for 15- to 24-year-olds at the heart of the single currency union.

Across the eurozone, youth unemployment is running at just over 21%. However, Italy’s Calabria region has a rate of 65%, while Upper Bavaria in Germany is just 3.4%. One union, two different regions – and a chasm laid bare.

Calabria

The construction of the port of Gioia Tauro was supposed to mark a new beginning for Calabria. If things had gone as builders envisioned 20 years ago, when the port came to life following private and public investment of hundreds of millions of euros, this impoverished region in southern Italy would have flourished under a new era of industrialisation, thanks to the massive new infrastructure project.

But things did not work out as planned. Today, dozens of enormous abandoned warehouses line the shores of Gioia Tauro, a port that is barely operating at sustainable levels and that is known as the playground of the ’Ndrangheta, the Calabrian mafia that has transformed the town into the major entry point for cocaine into Europe from South America. Far from being the home to booming new companies, the neighbouring countryside is littered with half-built cement houses among the olive trees and orange groves, a constant reminder of the region’s essential lawlessness.

In nearby Polistena, a parish priest known as a fierce critic of organised crime, Don Pino Demasi, bemoans the statistic that makes Calabria the unenviable standout of all of Europe: it has the highest rate of youth unemployment (65%) on the entire continent, with nearly seven in 10 young people here out of work. He puts most of the blame on the state, which he says has abandoned the south to die.

The ’Ndrangheta, Demasi says, “has become almost an employment agency, where the right to work is conceded as a favour. “The young person in the south has three possibilities faced with this widespread illegality: one is to adapt to the system, the second is to run away, the third is to stay and to be a protagonist of change,” he says.

Antonio Nicaso, an expert on the ’Ndrangheta, says young people are not necessarily drawn to the criminal underworld to get rich, but they want a salary, and can make an income by serving as a “soldier” for the organisation. This involves collecting protection money from small businesses – known in italian as il pizzo – to running fake companies that launder the ’Ndrangheta’s ill-gotten funds.

Other options could include working in a family business or relying on political favours for opportunities.

“If you don’t want to join the ’Ndrangheta, you have to rely on political patronage for other work,” says Nicaso.

The overall employment rate for all adults in Calabria is just 39%, according to official figures, far lower than the national average of 56%. During the financial crisis, from 2008 to 2014, real GDP in Calabria declined by 13% and the GDP per capita in the region is much lower than the average in Italy (€16,177 vs € 26,548).

It is no wonder, then, that Calabria has lost about 3.7%of its population as a result of mass migration out of the region. Typically, Calabrians who leave the region are young people who resettle in northern and central Italy.

“This means that Calabria tends to lose qualified youth who could contribute to the development of the region and instead decide to leave because they are not able to find suitable jobs,” says Maria De Paola, a professor at the University of Calabria.

The causes of high unemployment are plentiful: terrible infrastructure – it takes about six hours to get from Gioia Tauro to Rome by train, because there are no high-speed trains south of Salerno – low rates of innovation and entrepreneurship, political corruption and criminality.

John Dickie, an author and historian, says the once promising port now looks like a “cathedral in the desert. It hasn’t created the kinds of jobs that the state envisioned and so state expenditures were instead scattered very thinly in the form of welfare and other payments that are frequently diverted by patronage politics and sometimes organised crime.”

This week, a former local politician and union leaders said a “mockery” was being made of Gioia Tauro after it emerged that Salerno, a competing port city in neighbouring Campania, would be used as the point of departure for new trains made in Calabria and bound for Peru.

Anti-mafia advocates, like Demasi, and an organisation called Libera have sought to create opportunities amid the chaos and foster the creation of co-operative businesses using assets that have been seized by the mafia, sometimes controversially. The co-ops exist to take a stand against organised crime and encourage the development of socially conscious and environmentally friendly non-profit businesses.

Bavaria

Stefan Wimmer and Ralf Guttermeyer have wanted to be firemen ever since they can remember. Both aged 17, they are now in the rare position of making their childhood dream a career: seven weeks ago, they became two of four apprentices at Munich airport’s firefighting services.

In Upper Bavaria, where the two teenagers live, their chances were always stacked in their favour. At 3.4%, the administrative district in Germany’s south has the lowest unemployment rate for people aged 15-24 in the entire European Union. The number of people on Germany’s workfare scheme, Hartz IV, is also lower here than anywhere in the rest of the country.

Freising, the district of Upper Bavaria which is now home to Munich’s airport, even trumps that: its adult and youth unemployment rates of 2.1% and 1.9% fall way below the 3% which British economist William Beveridge once defined as amounting to full employment.

It is also, incidentally, the administrative district with the lowest average age, 39.7, in an otherwise ageing country. Yet among a population of 590,733, there were last year only 751 young people who were registered as out of work.

Asked if they know any peers who couldn’t find a job, the two teenagers have to pause to think. Wimmer has a friend who took a long time to find his first job, “but, to be honest, that was his own fault”. “In our region, if you apply yourself, then you’ll get a job appropriate to your skills,” said Guttermeyer.

Historically, unemployment in the upper half of Bavaria has fallen and risen in accordance with that in the rest of Germany – just at a higher level. Even before the city of Munich decided to move its new airport to Freising, the region used to enjoy relatively low levels of people looking for work.

Thanks to an unusually broad mix of trades, ranging from car manufacturing to high-end, service-sector jobs, the local job market has, in the past, been able to compensate when certain industries were temporarily in crisis.

Many of the companies in the area are medium-sized, Mittelstand businesses: out of about 15,000 businesses in Freising, only 240 have more than 100 employees. A large number are family-run, and therefore less mobile.

“This is a conservative area,” said Harald Brandmaier, a career advisor at Freising job centre. “They care whether you turn up to work on time, but they also stand their ground and stick with their workforce when the economy hits the buffers for a while.”

When Munich airport opened its gates in 1992, it therefore found itself faced with the peculiar logic of a local economy in which employers could not choose from an army of unemployed applicants, but had to actively compete with other businesses to court the best talent in the area.

Apprentice fireman Guttermeyer, for example, also got a job offer from BMW, who would have paid him a higher starting salary and picked him up from his doorstep in a shuttle bus every morning. In the end, he opted for the airport because it felt more appealing. He now earns €860 per month, rising to €1,000 over the next three years, and rides to work from his parents’ house by motorbike.

At Munich airport HQ, the pressure to sell itself to potential new recruits is palpable. Reception areas are plastered with posters advertising the airport as “Germany’s best employer” and Theresa Fleidl, the head of human resources, emphasises that Munich’s is the only airport in the world with its own brewery and indoor wave-riding pool, located between terminals one and two. “We want to offer our employees a world full of experiences,” she said.

The airport is now the region’s largest employer, housing 550 companies with a total of about 35,000 workers.

A job market with a chronic undersupply of skilled workforce has also forced newcomers to adopt the area’s traditional labour structures. Germany’s much-admired dual education system (in which apprentices are trained jointly by employers and at specialist vocational schools) has grown in Upper Bavaria, not because it was seen as the more responsible thing to do, but because companies, unable to “buy in” a fully trained-up workforce, often had to mould the workers they needed themselves.

Munich airport, for example, offers young people apprenticeship opportunities in real estate management, even though it could conceivably recruit qualified real estate managers from outside the region. “In other parts of Europe, the state tries to push everyone into university, and you end up with doctors driving trucks,” said Fleidl. “Here, we get the companies to educate their employees, and they can get exactly the workers they want.”