- Associated Press - Sunday, July 15, 2012

BRUSSELS — Irene Fernandez lost her job with Spain’s postal service five months ago, a victim of government spending cuts.

Since then, she’s been getting by on spending money from her mother and the $530 a month she earns grooming dogs for neighbors. Ms. Fernandez, 24, has had one job interview.

“This year has been the toughest,” she says. “I am beginning to realize that things are going to be a lot tougher for me than for my mother’s generation.”

Europe’s economic crisis is hitting young people like Ms. Fernandez the hardest.

The youth unemployment rate is nearly 53 percent in Greece, 51.5 percent in Spain and 35 percent in Italy. In the 17 countries that use the euro currency, youth unemployment is a record 22 percent, twice the eurozone’s overall unemployment rate of 11 percent, which is itself the highest since the euro was created in 1999.

The striking exception is Germany, where youth unemployment is only 7.9 percent, thanks to a vocational education system. (European economic statistics count those 15 through 24 as youths.) In the U.S., youth unemployment — which covers ages 16 through 24 — was 16.5 percent last month.

Economists fear that years of unemployment could produce a European version of Japan’s “Lost Generation” — the young adults who looked in vain for jobs in the 1990s and today find themselves permanently locked out of good careers.

The longer young adults stay unemployed, the longer they contribute nothing to economic growth, consume government aid and increase the risk of social unrest.

Weak economic outlook

Youth unemployment is almost always about twice as high as overall unemployment in Europe. Young workers are often the last hired, so they are the first to be fired.

And they find it tough to break into occupations — notaries in Italy and taxi drivers in Greece, for example — where established, older workers are protected from competition by laws and regulations.

But Europe’s economic malaise, which began with the financial crisis in 2008 and continues as governments grapple with excessive debt, has made things far worse. Countries have adopted austerity programs and cut government employees. Companies have announced layoffs or frozen hiring to deal with falling demand.

A collapse of housing markets also has wiped out construction jobs, many of which were held by young workers. And older workers whose finances were ravaged by the recession and financial crisis are retiring later.

As a result, successive waves of young people have graduated from high school or college with little chance of finding a job, pushing the youth unemployment rate higher each year.

The outlook is for little improvement. More than half the eurozone countries are in recession, and the overall economy will shrink by 0.3 percent this year, according to the International Monetary Fund.

Leaders of the 27 European Union countries agreed late last month on a bold plan to pump cash into Europe’s troubled banks and help governments deal with their excessive debt and high borrowing costs.

But the plan is likely to provide little immediate relief to Europe’s youth. What they need is economic growth that produces jobs.

“That’s the real urgency,” says John Springford, research fellow at the Center for European Reform.

The desperation is especially high in Europe’s most troubled economies — Spain, Italy and Greece, among others — and is affecting even the well-educated.

Wage penalty

Jacinthe Adande, 28, holds a degree in literature and languages from Paris’ elite Sorbonne.

Unemployed for four years, she has been unable to land a job even as a house cleaner. “They ask for your work experience,” she says. She doesn’t have much.

Andrea Beluffi, 19, wanted to go to work after he finished high school in Cremona, a northern Italian city famous for producing Stradivarius violins. But he took a hard look at the job market and decided to enroll in college instead.

“Let’s be clear here, I am glad to go to university,” he says. “However, it is the crisis that forced my decision … I wanted to work but, at this time, whether one likes it or not, you have to study. What would I have done otherwise?”

Other European youths, unable to find jobs, also have sought sanctuary on college campuses. That is one reason the percentage of European youths who are part of the labor force — working or looking for work — dropped to 48.7 percent last year from 52.9 percent in 2000.

British researchers Paul Gregg and Emma Tominey found in a 2005 study that British men who were unemployed for at least a year sometime from age 16 through age 23 were still suffering from a “wage penalty” at age 42: They earned 13 percent to 21 percent less than they would have if they hadn’t been unemployed.

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