The lost generation

PARIS, Jan. 4 (UPI) -- A specter is starting to haunt Europe. Youth unemployment is reaching record levels and the implications for social stability are alarming.

Unemployment among those ages 15-24 is now averaging 20 percent across Europe, with an extraordinary peak of 43 percent in Spain. But it is above 20 percent even in prosperous Luxemburg, the country with the highest income per capita in the European Union.

Youth unemployment is expected to surge even higher in June as a new class of school-leavers and fresh university graduates hits the sluggish labor markets.

Youth unemployment grew dramatically last year, according to the latest figures from Eurostat, the EU statistical arm. Between January and October 2009 it soared from 18 percent to 24 percent in Ireland; from 12 percent to 18 percent in the Czech Republic; from 21 percent to 28 percent in Slovakia; from 18 percent to 28 percent in Finland; and from 17 percent to 24 percent in Denmark.

Only Germany and Holland succeeded in keeping unemployment rates stable at not much more than 10 percent, with generous labor market subsidies, training programs and free higher education. But some of these measures run out this year, with governments hard put to find new money to continue them, particularly when there are no new jobs for the trainees once their courses finish.

The obvious concern is the kind of youth unrest that has roiled the streets of Athens this winter, or the mass demonstrations that have become a regular feature of French life, or the kind of riots that swept through some of Britain's ethnic neighborhoods in the 1980s and 1990s.

In the United Kingdom, the Prince's Trust (sponsored by the future King Charles) has identified a different kind of concern: the levels of drug and alcohol abuse and despair that are building a "lost generation." The impact of such an unskilled, inexperienced and pessimistic generation can affect labor markets, economic output and political life for decades as their children grow up in underprivileged homes.

"The emotional effects on young people are profound, long term and can become irreversible. We must act now to prevent a lost generation of young people before it is too late," said Martina Milburn, the trust's chief executive, as she launched a report this week into Britain's 1 million young jobless.

A poll commissioned by the trust found that one in 10 of those who had been out of work had turned to drug or alcohol abuse. And those without work or a place in higher education or in a training program were twice as likely to feel down, depressed, isolated or rejected.

Young people "bore the brunt of the recession," Milburn added. "The result is a generation of undiscovered skills and talents. We must invest in these young people, rebuilding their self-esteem, to ensure that today's unemployed do not become tomorrow's unemployable."

The trust, a charity, is seeking to raise $75 million this year to help steer unemployed youth into jobs or training programs. But at $1.50 per week for each of them, that will not achieve much. And the current financial straits of the British economy and government finances mean there is not much public money available for more education or training programs. The U.K. government's share of the economy is expected to hit 50 percent this year, well ahead of Germany.

Youth unemployment in the United States is more than 19 percent and is expected to top 20 percent this year. But it is much higher among ethnic minorities, and levels of incarceration are traditionally very much higher in the United States than in Europe.

The real alarm about youth unemployment is that there is little sign in Europe or the United States of much relief this year, as the bumpy recession proceeds at too slow a pace to get companies hiring again. Business investment late last year was 20 percent down on the already diminished levels of 2008.

There is not much sign of new vigor in the European economies, where the credit crunch is hitting the ability of governments in Greece and Eastern Europe to borrow. Even the United Kingdom is worrying that its AAA credit rating may get marked down.

It is a curious twilight period, with the recession theoretically over but not much recovery under way and stretched governments already wary of any more deficit spending. Even if youth unemployment does not translate into riots and crime, the real price could be paid in the years to come as a "lost generation" with little motivation, less training and few prospects -- and drug or alcohol dependency -- drags down the economy of the future.