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Lost generation may find their way yet

A generation of university graduates wonders how they are ever going to get a job that matches their qualifications. But according to new European statistics, there is hope

Students in Europe’s universities right now will be entering a job market that – for southern European countries at least – is not really a job market at all. There are, after all, no jobs to be had. As Europe hauls itself through yet another year of non-existent growth or even recession, unemployment for young people in Spain has just surpassed 50 per cent. And for a graduate leaving university in crisis-ridden Greece, getting a job now is like winning the lottery.

The EU Commission’s latest European Vacancy Monitor reports that there has been a bit of job growth since 2009, but it is weak. The jobs that are there tend to be low-skilled ones. So much so, that when a Greek graduate from Lund University in Sweden, Eleftheria Gritsi, landed a highly-skilled EUR 780-a-month job in an Athens publishing house, she counts herself lucky, very lucky, and her envious unemployed friends can – without exaggeration – call her good luck a miracle.

Other countries, not so badly hit, have job openings, but they are either low-paid internships, or are in a line of work that is completely different from what the graduates are qualified for.

See where the jobs are on this set of graphics here..

Bust hits specific age group

It is the dismal logic of the labour market: New students are always good to have, but firms only hire them in boom times. In times of bust, real jobs are held by the lucky, previous, generation of graduates.

This means that the cohort of graduates coming out on to the market during the bust, have a much harder time, even in the longer term when the economy starts moving again, as they are then ousted by the lucky newcomers.

According to labour market experts the injustice of this boom and bust phenomenon is particularly pronounced in countries with segmented labour markets, like Greece and Spain, where it is hard to switch between occupations. In more flexible markets there can be jobs for new graduates, even in times of bust, but heavily concentrated on temporary jobs.

Jobs will be back

This is all very gloomy. But according to new, updated statistics from the EU, graduates may not have to sit back and rely on dumb luck to land a good job that fits their long years of university education.

The European Centre for the Development of Vocational Training (Cedefop), whose offices happen to be in Thessaloniki in Greece, has recently released its skills forecast. Its forecast comes with a proviso: The latest economic setbacks have been taken into account, but the forecast pre-supposes that the problems in the Eurozone will not lead to another crisis, and that a modest recovery will bring job growth in all EU member states to varying degrees.

You can see where the jobs are in Europe in this set of graphics here..

So here it is: As the 2008 economic crisis hit, Europe’s workplaces reacted by shedding a net 5.5 million jobs. But before 2020 the European economies will rebound, if this analysis holds water, and create 8 million new jobs. A further 75 million job opportunities will arise naturally as people leave the workforce. And if you look deeper into the forecast, university graduates stand at an advantage to get the jobs that will be offered.

Even in Greece

Konstantinos Pouliakas, an economist at Cedefop, explains to the University Post that there is no reason to believe that the economic crisis that started in 2008 will change the more fundamental fact that jobs in the highly skilled category are the ones that will be offered.

»The labour market is ‘up-skilling’. We are moving towards a more service-oriented economy with higher skilled jobs, and we are getting a higher and higher qualified workforce to fill those jobs,« he says. 37 million highly-skilled jobs will be up for offer in the European Union by 2020, 13.5 million of them will be new ones.

Some countries will do better than others, but all will improve, according to the projections. The Danish labour market, pretty much an EU average performer, will have 500,000 jobs to offer the highly qualified before 2020, 120,000 of these will be jobs that didn’t exist at all in 2010.

Even in debt-saddled Greece, the highly qualified graduates, if they have the patience and resources to wait for it, can take a deep breath and look forward to 611,000 job openings, 282,000 of them new ones. If anything, there is the risk of job polarisation, as the Cedefop projections show growth in highly skilled and in low-skilled jobs, with so-called ‘middle skill jobs’ such as clerks in offices, fishermen and farmers, losing out to technological or
legislative changes.

Graduates are churned out of university year after year, but businesses and institutions hire in cycles, a lot of them when times are good, much fewer when times are bad. For Europe, the last two years’ economic turmoil has meant that many university graduates are out there, looking for a job. Expressed in economic terms, the supply of higher qualifications has risen faster than the demand for them.

There is sharper competition for the jobs that are available. University graduates are more likely to accept jobs for which they are overqualified, part time jobs and lower wages. When they do this, they displace lower-skilled people from their jobs. »We call this ‘skills mismatch’, the bumping down or the crowding out phenomenon,« explains Konstantinos Pouliakas of Cedefop. »There is a particular trend towards ‘skills mismatch’ during the recession. In the south of Europe for example, we see a higher proportion of highly qualified people taking up jobs as salesmen,« he says.

If it is just temporary, having too many people who are over-educated is not a problem. Better qualified people may be more innovative, changing the job they are doing once they are there, helping businesses’ productivity. They may also find it easier to transfer skills from one sector to another. But if the over-education persists beyond the recession, highly qualified people will be discouraged and frustrated, and their skills may become obsolete.
Cynics will say that if there are too many highly qualified people in the job market, European governments should lessen their grant support for students and their subsidies to universities. After all what is the point of over-qualifying people for jobs that are not there?

However, this argument against higher education doesn’t quite hold, says Konstantinos Pouliakas. The upskilling of the jobs themselves, creating new demand for highly qualified graduates is a long term trend, and it is happening. »Instead of worrying about highly qualified people taking bad jobs, they should worry about making the bad jobs better and more productive. The signal to policy-makers is to speed up the creation of better jobs,« he says. »We should also not underestimate the significant societal value that we can gain from educating individuals in terms of civic attitude and social capital, even if they do not end up in the best possible jobs,« he adds.

Workforce packed with degrees

In this sense, everyone is a winner as society increases its job skill level. In almost the same way, Cedefop data showing that the European workforce is getting older, should not cause frowns for younger people fearing that the oldies are staying on, blocking their advancement. »The labour market is not a fixed pot of jobs,« says Konstantinos Pouliakas.

»Essentially the pot gets bigger, as increased productivity widens the scope for job creation. Most of the time, old people and young people are not fighting for the same jobs.« So despite the economic gloom right now, it is not all bad. Europe has the most highly qualified workforce in its history. 30 per cent of the workforce had higher qualifications in 2010.

This figure will be 35 per cent in 2020.If Europe recovers, and remember – the forecast presupposes a modest recovery – the jobs for university graduates will be there for the taking.

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