Youth unemployment ‘costs Ireland billions’

Ireland is losing billions of euro because it is failing to tap the potential of its youth due to high unemployment and low levels of participation in jobs training and education, according to an international report.

PwC found that Ireland is near the bottom of the league of the group of OECD wealthy countries, mainly because of our relatively high rate of youth unemployment.

The accountants found that Ireland out of 34 countries is ranked at 29th in a league that scores individual countries for their youth unemployment rates and their performance in vocational training for the young.

Only Italy, Spain, Greece Portugal, and Turkey are ranked lower than here.

PwC said its ‘Young Workers Index’ is based on an average of eight indicators that reflect unemployment, employment and participation in education and training for people aged under 25 in 34 Organisation for Economic Co-operation and Development (OECD) countries.

Switzerland, Germany, Austria, Norway, Canada, the Netherlands, Denmark, Israel, and Japan are among the top 10 best performers, PwC found.

However, Iceland, which, like Ireland, was also rocked by the 2008 banking crisis, is ranked the fourth best performer. Other small countries, including Estonia, Finland, New Zealand, and Slovenia, also perform relatively well.

“Reflecting an unemployment rate of over 20% for 15-24 year olds in 2014, the research shows Ireland’s potential long-term gain could be boosted by some €8.2bn if we can match German performance levels,” said Ciara Fallon, director at PwC Ireland.

The PwC report is based on 2014 figures, but it appears that there has been only a small drop in youth unemployment here in recent times.

CSO figures published last month showed an overall unemployment rate in September of 9.4% and a seasonally adjusted youth unemployment rate, defined as 15 to 24-year-olds without a job, of 20.6%, down slightly from 20.7% in August.

In addition, Live Register figures, now published separately, show that there was also 65,616 people of all ages on activation and training schemes, an increase of 2,069 persons from a year earlier, who are not counted toward the jobless total.

Those figures showed the percentage of persons aged under 25 on the Live Register stood at 13.6% in September, down from 14.9% in September 2014 and 16.2% in September 2013.

“Scoring in 29th place in the PwC Young Workers Index Ireland has some way to go in terms of leveraging our young people in the workplace compared to many of our trading partners, such as the UK, Germany, France, and the US,” said Ms Fallon.

PwC said that since 2011 many countries have posted “a marked improvement” though average scores “in 2014 across the OECD remain well below pre-crisis levels in 2006”.

John Hawksworth, PwC chief economist and co-author of the report, added: “It seems that the core European countries like Germany, Switzerland, and Austria offer the best role models in developing the potential of younger people.”

“Their systems of education, vocational training and apprenticeships minimise the number of young people falling through the labour market net.”