If there’s one lesson we’ve learned over the past few years, it’s that we cannot simply bail ourselves out of a crisis, we cannot solely stimulate ourselves out of a crisis and we cannot just print money our way out of a crisis. But we can become much better in equipping more people with better skills to collaborate, compete and connect in ways that drive our economies forward.
There is no group for whom this is more important than today’s young people. Between 2008 and 2011, the gap in unemployment rates between higher- and less-educated youth widened dramatically. While young people with advanced skills have weathered the crisis reasonably well, those without foundation skills have suffered. Unemployment among young people without a high school education soared 20 percent in Estonia and Ireland and 15 percent in Greece and Spain. The short-term impact on individuals, families and communities beg for urgent policy responses; the longer-term impact, in terms of skills loss, scarring effects and de-motivation, will affect countries’ potential for recovery. Without the right skills, people will languish on the margins of society, technological progress will not translate into economic growth, and countries can’t compete in the global economy.
What’s often overlooked amid the grim statistics is that a few countries, like Austria, Chile, Germany and Korea saw a sizable drop in unemployment rates among their low-skilled youth. What this tells us is that, with the right policies and economic environment, we can do something about this and it seems to boil down to three actions: build the skills that foster employability; give young people the opportunity to make their skills available to the labor market; and ensure that those skills are used effectively at work.
To begin, we need to be able to anticipate the evolution of the labour market: we need to know what skills will be needed to reignite our economies. The coexistence of unemployed graduates on the street, while employers say they cannot find the people with the skills they need, shows clearly that more education alone does not automatically translate into better jobs and better lives.
We need to put a premium on skills-oriented learning throughout life instead of on qualifications-focused education that ends when the working life begins. We need to tackle unacceptable rates of school dropout by offering more relevant education and second-chance opportunities, and by offering work experience to young people before they leave education.
OECD’s Learning for Jobs analysis shows that skills development is far more effective if the world of learning and the world of work are integrated. It’s not difficult to understand why. Skills that aren’t used can atrophy. And, compared to purely government-designed curricula taught exclusively in schools, learning in the workplace allows young people to develop “hard” skills on modern equipment and “soft” skills, such as teamwork, communication and negotiation, through real-world experience. Hands-on workplace training can also help to motivate disengaged youth to stay in or re-engage with the education system.
But building skills is the relatively easy part of the plan; far tougher is providing opportunities for young people to use their skills. Employers might need to offer greater flexibility in the workplace. Labor unions may need to reconsider their stance on rebalancing employment protection for permanent and temporary workers. Enterprises need reasonably long trial periods to enable employers giving those youth who lack work experience a chance to prove themselves and facilitate a transition to regular employment. And some countries may need to review the minimum wage for younger workers to make it easier for low-skilled young people to get their first job and discourage early school leaving by lowering the opportunity cost of staying on at school.
Last but not least, if all of this is about more than getting youth temporarily off the street, we need to ensure that talent is used effectively. Skills mismatch is a very real phenomenon for youths that is mirrored in people’s earnings prospects and in their productivity. Knowing which skills are needed in the labor market and which educational pathways will get young people to where they want to be is essential. High-quality career guidance services, complemented with up-to-date information about labor-market prospects, can help young people make sound career choices.
We also need to maintain and expand the most effective active labor-market measures, such as counseling, job-search assistance and temporary hiring subsidies for low-skilled youth; and we need to link income support for young people to their active search for work and their engagement in measures to improve their employability.
But none of this is going to work unless everyone is involved: governments, which can design financial incentives and favorable tax policies; education systems, which can foster entrepreneurship as well as offer vocational training; employers, who can invest in learning; labor unions, which can ensure that investments in training are reflected in better-quality jobs and higher salaries; and individuals, who can take better advantage of learning opportunities and shoulder more of the financial burden. It’s time for all of us to take the lessons we learned through the crisis and turn them into a sustainable plan to get our young people back on the path to prosperity.