Youth unemployment rising despite widespread staff shortages

Youth unemployment in the Netherlands is increasing despite widespread staff shortages impacting many sectors in the country. That is partly due to young people always feeling a downturn in the economy first, as employers hesitate to extend temporary contracts or get rid of inexperienced workers first. But the fact that the labor market hasn’t yet adjusted to the new generation’s job wishes and demands also plays a role, experts told the Telegraaf.

This week, Statistics Netherlands (CBS) reported that unemployment in the Netherlands increased to 3.5 percent in February. Unemployment among young people under 25 climbed to 8.7 percent. At 160,000, the number of unemployment benefits for young people was almost a quarter higher than in February 2023.

Youth unemployment is typically around twice as high as unemployment among the entire working population. “You would then expect a figure of at most 7 percent for the group up to 25 years old,” Ton Wilthagen, labor market professor at Tilburg University, told the newspaper. Youth unemployment approaching 9 percent is too high, he said. “Especially when you consider there is plenty of work. That increase is not simply the result of the declining economy.”

Rob Witjes, head of labor market information and advice at the benefits agency UWV, agrees. “It certainly plays a role that things are not going so well in the Nethelrands. As a result, employers are reluctant to extend contracts or hire temporary workers. But there may be more going on beneath the surface.”

Part of it may be that the labor market hasn’t yet had a chance to adjust to Gen Z’s way of working. The new generation tends to want to work part-time more often, for example, so they can combine two jobs or have more time for themself. “Companies may not exactly offer what these young employees are looking for. Not in content, not in challenge, or not in hours. Conversely, employers may be disappointed in what someone brings. Then you are more likely to decide not to renew a contract,” Wilthagen said.

Witjes sees no reason to panic yet. “I certainly don’t want to make a fuss about it, but a large proportion of the young people in the CBS figures are looking for a job in addition to their school or studies. The unemployed young people are certainly not wandering around aimlessly on the street.”

Wilthagen is more concerned. He pointed out that to receive an unemployment benefit, these young people have had to work for at least six months before becoming unemployed. “That is, of course, not a nice way to start on the labor market. Especially when you consider that we desperately need this group because of the aging population.”