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Aaron McKenna: To combat youth unemployment, Ireland's skills gap needs to be tackled

Despite soaring youth unemployment rates, there are two million job vacancies across Europe due to a lack of skilled individuals in specific sectors. It’s time to think strategically about how to fill the gaps, writes Aaron McKenna.

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“EUROPE DAY” was celebrated on 9 May with news that the youth unemployment rate in Greece rose to a staggering 64.2 per cent in February, with overall unemployment now standing at 27 per cent. Here at home our official youth unemployment rate stands at 31 per cent, versus 14 per cent overall.

The unofficial rates are higher when you count in those who are off the books, thanks to a lack of benefit entitlements or having been stuffed into state make-like-work programmes. Emigration is doing the rest, with a National Youth Council report during the week that 300,000 Irish people have emigrated in the past four years. Forty-three per cent of those leaving are under 25. It’s not inconceivable to imagine that half or more of our population under 30 has been severely affected by the recession, either unemployed or forced to leave.

The ladder is pulled up

“Generation jobless” as The Economist recently dubbed them, the cohort of 15-29 year olds not in employment, education or training, is getting a particularly raw deal in the global crisis that has gripped the world since 2008. The young are always the first hit in bad economic times as companies tighten down on hiring and the ladder is pulled up behind those already perched on the tree.

Young people trying to get ahead in a recession face the daunting task of getting through a queue already filled with experienced workers. They have to try and break in to closed and controlled sectors where regulations, usually espoused on the basis of “fairness” towards workers, make it difficult to get in the door. Witness the struggles of new entrants to frontline public services as a perfect example, expected to do the same work for less pay if and when it becomes available so that government and unions don’t have a falling out over hitting pay, conditions and jobs of existing workers.

Structural mismatch

This ongoing economic calamity is hitting young workers harder than usual, however. It is not a case that the economy contracted, jobs were lost, and as it starts to slowly grow again jobs will return. In the advanced economies in particular there is now a structural mismatch between the jobs on offer and the skills of our unemployed. The simplest example of this in Ireland is the dearth of construction jobs compared to the massive employment in the sector in the past. Those jobs are not coming back in those numbers, and we have a variety of people sitting idle with skills that are no longer required.

The government recently introduced a number of reforms to the work permit scheme that allows companies to import talent where it is missing locally. This is only right and proper, for if the skills are not present here then we cannot benefit from the knock-on effects of the employment of even someone brought to work in Ireland while we suffer high unemployment rates. There are checks and balances to ensure that work permits are only granted where the role cannot be filled by a European citizen.

The extension of a further 2,000 work permits, particularly in and around specialist IT roles, is a symptom of a wider problem: there are over two million job vacancies in Europe at the moment and here and all around there is a particular lack of skilled individuals in specific sectors. This is the systemic problem of a skills gap.

The skills gap needs to be tackled strategically

Governments have not given nearly enough strategic thought to how we run our education system. They are fearful of change and the vested interests opposed to it.

The rot goes back a long way and through several governments. The current Education Minister Ruairi Quinn can say he’s fixing somebody else’s mess; but he was the Minister for Finance from late 1994 to mid-1997, influencing keystone education policies in and around the time our current leaving cert cohort were starting in school. Fianna Fail leader Micheál Martin was Minister for Education from 1997 to 2000. As per usual the big three parties are shedding crocodile tears about all the things somebody else did that got us here.

Bridging the skills gap will take time and it will take structural reforms of how we educate our young and our unemployed. Countries that have been successful in keeping youth unemployment low, in particular Germany, have strong vocational education systems combined with close relations to industry. Apprenticeships in a wider range of areas than we might traditionally think of them is one step that could help. Cultivating links between industry, the public sector and classrooms from secondary school would be another.

Matching student’s interests to a viable economic future

A broad classical education that teaches one to think critically is very important. But there is room for classes on business and work placements beyond Transition Year Programmes, which tend to feature them quite heavily as a unique value proposition for students taking up the optional year.

In an era where guidance councillors are being cut back, another useful tool in the box of matching student’s interests to a viable economic future for themselves would be enhancing education on the economy in general. Arm students with information on the trends in employment, where skills gaps are developing and what they might expect to be able to get out of their choice in further education.

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I have in the past discussed better ways to re-skill those already out of work , replacing our billion euro a year state training bureaucracy – that still runs several week courses on writing a CV – with grants that unemployed individuals can spend on courses in our existing education institutions. Our existing universities, colleges, Institutes of Technology and so on are excellent providers of skills that could help someone find a job, and we would be providing them with a stimulus at the expense of an inefficient system that ESRI research has shown can make a person less employable for having entered it.

High labour costs keep people unemployed

Aside from skills we could also do worse than allow our young and unemployed in general to become more competitive in the search for work. JobBridge is partially an admission by government of an economic fact of life: that relatively high labour costs keep people unemployed. A recent Forfás report has shown that we’re still far more expensive a place to employ people than our European neighbours and competitors. JobBridge has tried to counter that by making it cheap to take a punt on someone and for employers to bridge the skills gap themselves with six or nine months of training.

The state also provides grants to businesses of up to €20,000 for taking someone off the roll of unemployed. Costs are too high, but government can’t shoulder the entire burden. They’ve already cut the dole for people based on age and have a variety of schemes for taking the cost and risk out of hiring someone trapped in unemployment. Why not, apart from political cowardice, for example introduce reforms that allow people to negotiate more competitive wage deals with employers directly?

Long term unemployment leaves a permanent scar

Long term unemployment, particularly when young, leaves a permanent scar on one’s ability to earn a crust. Lifetime earnings will be lower, and there are a range of other less tangible damages done to a person who feels like they can’t get ahead. Government needs to stop worrying about vested interests in education and restrictive practices designed to protect some at the expense of others.

It is not acceptable that the primary solution to youth unemployment remains emigration and, five years into the crisis, still no major structural changes to help bridge the gaps that will leave a generation permanently separated from the living they deserve.

Aaron McKenna is a businessman and a columnist for He is also involved in activism in his local area. You can find out more about him at or follow him on Twitter @aaronmckenna. To read more columns by Aaron click here.


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