Contributing to a European Youth Guarantee: the Work Experience Grant
Youth unemployment has been mounting in the European Union. 5.5 million young people are currently unemployed in Europe and an additional 1.5 million are forced into precarious jobs. In some countries as many as one young person out of two cannot find a job. The situation among low-educated and in ethnic minorities is even far more alarming. If nothing happens, youth unemployment will go up further, reaching levels that are similar to the 1980s and 1990s. Every next year a new cohort of school-leavers and graduates will try to make its way into the labour market, adding to the large numbers of young people that are already looking for a job.
When the crisis became manifest in the fall of 2008 various governments and other actors – social partners, schools, regions, municipalities - took efforts to prevent and counteract youth unemployment. One of the policies was to tell and facilitate young people to try and stay at school, postponing there labour market entry. At present, with significantly increased levels of youth unemployment, there is an urgent need for further ideas and instruments to prevent a “lost generation”.
The European Commission, the European Parliament and various other European-level actors are rightfully promoting the concept of a Youth Guarantee: young people should be in either work or (further) training/education: they should not be left in a situation of inactivity with a lack of perspective. Bleak prospects will contribute to poverty, demotivation, discouragement, frustration and possibly deviant behavior (“going underground”). Instead, Europe needs to cherish its future human capital, as it represents one of its key competitive assets. Now it’s time to act and come up with innovative strategies and measures to implement the concept of a European Youth Guarantee.
Which points of application can we think of? Here is an example. In the Netherlands, we have recently proposed and developed a new measure, which we have named the Work Experience Grant (in Dutch Startersbeurs), or, in short: WorX. We started from the idea that it’s crucial for young people to gain work experience. Without work experience it is hard to get a job or even an invitation for a job interview. Without a job, no experience is gained and a vicious circle emerges: no experience, no job; no job, no experience.
What are the key features of the Work Experience Grant? School-leavers (with completed education and qualifications) that cannot find a job are stimulated and facilitated to find a traineeship at a company or institution that matches both the level and relevant content of their education. The youngster himself/herself can actively approach a company or institution and make an offer to the employer. If the employer is willing to pay at least 100 euro per month to the young person, the municipality will pay in 400 euro, so that a total grant of 500 euro per month is created. The grant will be given for a maximum period of 6 months and cannot be prolonged.
The work to be carried out has the status of a learning/working traineeship; it is not a regular job and the employer is obliged to give guidance and training to the youngster. This way the work experience position cannot be used to oust regular employees or to exploit young people by having them perform normal work at a low salary during a long period. One could think of innovation activities that the regular crew is unable to address, but might hold business opportunities in the future. This does not compete with other employees, because these tasks are not executed otherwise.
Importantly, no employment contract is concluded between the employer and the youngster, but a trainee contract based on a standard contract (provided by the municipality). The contract is based on a minimum of 32 hours per week. Youngsters with incomplete education and qualifications will not be eligible to the Work Experience Grant scheme – they will be helped back to education to acquire basic qualifications.
After completing the work experience period, the employer provides a Work Experience Certificate to the youngster, indicating (based on a standard format, provided by the municipality) which specific competences have been strengthened due to the traineeship. This certificate is included in a so-called ePortfolio, provided by the municipality, which the youngster can use and further update during his or her labour market career.
According to Dutch standards, the Work Experience Grant amounts to a 78% rate of the social assistance benefit a young person of the age of 21 and up (living alone) would get, if he or she is found eligible for social assistance (bijstand in Dutch). We nevertheless expect that many school-leavers will prefer the Work Experience Grant over a social assistance benefit, as it has a more positive and pro-active label than being “on benefit” and sitting at home, waiting for a (any) job offer from the municipality. It will stimulate self-initiative, originating in the youngster’s wish to capitalize the years invested in the education completed.
The Work Experience Grant constitutes a voluntary scheme – young people are free to apply for it. It does not replace the social assistance scheme, nor does the take up of the grant impact future entitlements to social assistance.
For the municipality the Work Experience Grant will contribute to the prevention of inflow into the social assistance scheme, as school-leavers will get a “kick-start” at the labour market, by gaining work experience and contacts with the employer, clients, co-workers, and by being able to “showcase” their skills and competences. A part of the young people that makes uses of the Work Experience Grant is likely to remain in the company and a get a regular job. Others will be in a better position to find a job as their experience and thus their C.V. have been enhanced significantly thanks to the trainee period.
The advantage for the employers is that they can temporary host young workers with fresh skills, such as up to date ICT skills, and new insights. Opening up the doors now to young people will also be a good investment in view of the ageing of the working population. We explicitly aim at a low financial contribution from the part of the employer, next to the in kind contribution in the form of supervision and training, to make the Work Experience Grant an offer one cannot refuse and create trainee positions for a large number of youngsters.
The Work Experience Grant measure can be introduced quickly and in a simple and non-bureaucratic way – at least in the Netherlands it does not require any new legislation or changes in legislation. Of course other countries can adapt the amount of the grant to their own standards. Funding can be obtained from municipality-level (including money that is saved from social assistance expenses) or national budgets and the European Social Fund (ESF) also offers possibilities. Already now, shortly after the introduction of the idea, several Dutch municipalities – including Tilburg and Rotterdam – are considering to implement the measure.
Professor in Labour Market Studies
President of CNV Trade Union for Young Workers
President of FNV Trade Union for Young Workers