Young Unemployed Are in ‘Catch-22 Situation’

Young people are twice or three times as probable to be unemployed as adults, because they are not preferred by employers and are the first victims of business cycles, José Manuel Salazar, executive director at the International Labor Organization, told CNBC Friday.

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The world faces a “huge challenge” to bring the offer from universities, from colleges, in line with the needs of the private sectors in business, Salazar said in an interview on the sidelines of the Global Youth Employment conference in London.

Young people “are in a kind of Catch-22 situation, they don't have work experience therefore employers don't use them, don’t prefer them," he said. “They are kind of in a vicious circle.”

“Another trap is the business cycle, they are the first ones to be fired and last ones to be hired,” Salazar added.

A mismatch between skills and the needs of companies in terms of workforce is one of the main reasons for the disparity, experts at the conference organized by CNBC said.

“There are 2.5 million jobs in Europe that are not filled and you still have unemployment in Europe at about 10 percent,” John Studzinski, senior managing director at Blackstone, told CNBC.

Governments need to have feedback from companies about what type of skills are needed, and need to provide programs, incentives for training and re-training, Studzinski added.

Partnerships where the private sector can engage with universities to refine the curriculum are essential, Salazar said.

“There’s no magic bullet, but vocational training, apprenticeships are absolutely essential,” he added.

A Drag on Europe?

Companies that are reluctant to back youth employment programs are "missing out on a wealth of talent and particularly enthusiasm," Tristan Wilkinson, director of public policy at Intel EMEA said, adding that not all firms know how to deal with integrating the young.

“We’re seeing the first generation of technology natives hit the workplace and I think that’s providing some challenges for lots of people,” Wilkinson said.

A generation grew up with social networks, games and the Internet and they expect the workplace to include them but in many cases this is not happening, he said. Employers also need to be more flexible in terms of working ours, Wilkinson added.

“The thing about knowledge is that it’s very transferrable and portable,” he said.

Blackstone’s Studzinski said Germany, the European Union’s engine of growth, is a good role model in the case of youth employment, because it "really does understand the apprentice system."

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"Siemens is one of the great enlightened companies when it comes to involving youth," he added.

If the problem is not solved, the young unemployed will be, potentially, “a drag on Europe indefinitely,” Studzinski warned.

“Bernanke last week talked about the fact that increased unemployment among youth actually will have a long-term effect and almost a social activism risk in society and we’re starting to see that in Europe,” he added.