Unemployment with a degree

Wage dissatisfaction, the lack of demand on the labor market, and limited career opportunities are the main factors that prevent young people from finding a job. These are the findings of a survey entitled “Youth of Ukraine 2007,” which was conducted in June-July 2007 by the State Institute of Family Development and Youth in every region of Ukraine. According to the researchers, who polled more than 2,000 people, young Ukrainians are becoming passive. The Day asked Lidia SMOLA, director of the State Institute of Family Development and Youth, to comment on what young people are dissatisfied with and to what extent their material requirements and working condition demands have grown.

What changes has the Ukrainian youth labor market undergone in the past year?

“Ukraine, like the entire world, is showing the following trend: youth unemployment is two or three times higher than that of the adult population. In comparison to Europe, the employment situation among young people in Ukraine is much better: the under-24 unemployment level is 15 percent lower than in Poland, 12 percent lower than in Slovakia, and 9 percent lower than in France. The results of our survey show that the employment level is still on the rise in Ukraine, while unemployment is dropping: compared to 2005, the level of employment has risen by nearly one percent to 55 percent. Employable people now account for more than 39 percent of the informal sector of the economy; half of them are under 35 years of age. This means that a middle class is beginning to form in our country or, at least, the groundwork is being laid for it.”

To what extent do young people feel comfortable in the employment sector?

“The analysis of young people’s employment shows that the situation on the youth market is rather unstable because young people are very inactive economically. In spite of the survey’s positive results, there are a lot of problems in the field of youth employment. One of them is the gap between labor market requirements and the education system. The need to introduce changes in the education system has been debated for many years. In 2006 graduates of higher educational institutions and secondary schools who became unemployed accounted for 17 percent of the total number of jobless people. Experts estimate that the state order for higher education specialists in 2006 was 40 percent short of the economy’s current requirements. The latest poll shows that 36 percent of employed youth are not working in their fields, a considerable drop compared to last year (48 percent). One of the reasons for this is wage dissatisfaction in one’s specialization. Another reason is lack of job openings in popular specialties: it is difficult to find this kind of job because this segment of the market is filled to capacity. One more reason is dissatisfaction with working conditions (14 percent in 2006 and 18 percent today). It should be noted that young people are making greater demands on their work, which are constantly expanding. Whereas before it was the desire to find a job and earn a salary, today young people are demanding opportunities to advance their careers and upgrade their professional level, and obtain additional training and comfortable conditions.”

Have the incomes of young Ukrainians increased in comparison with previous years?

“After analyzing the problem of poverty in the context of youth employment, experts note positive changes in the material position of young people. First of all, their incomes have gone up and the income/expenditure ratio in youth households has improved. According to a 2006 poll, 56 percent of young people rated their financial position as average, 24 percent said they had a lower-than-average level, and 7 percent said their standards were very low. If you take young people with no children, 6.8 percent of them were living in poverty. Young households with children have a poverty level of 34 percent, which exceeds the nationwide average figure of 28 percent.

“It is important to note that every second young person is dissatisfied with his/her financial position as a result of low wages and high prices and taxes: most of them favor actively building their economic future without waiting for the government’s help. But one-third of young people are taking a passive and uncertain stand, and 20 percent are reluctant to be patient and want to have small but guaranteed salaries right now.”

Why are young people dissatisfied with their jobs?

“One of the reasons is low salaries (64 percent of young people mentioned this in 2006 and 58 percent today). In 2006, 26 percent of young people were dissatisfied with their jobs because of the lack of prospects and professional upgrading opportunities. This number rose to 37 percent in 2007. Today, young people are not very scared of losing their jobs — only 13 percent are.

“The low level of young people’s economic activity is also caused by the fact that many of them go abroad. The survey showed that the most active young people go abroad, while passive ones stay behind. In the past few years, 52 percent of young migrants went to Russia and 7 percent to Italy. Most young people (47 percent) are employed in civil construction and 19 percent in agriculture. What sparks concern is the fact that every tenth young emigrant worked in the profession he or she acquired in Ukraine.”

Since Ukrainian young people are quite confident and not afraid to take risks, are they prepared to launch their own businesses?

“The monitoring of young peoples’ attitudes to launching a business shows that their interest in entrepreneurial activity is on the decline. The proportion of young people who want to have their own business has dropped to 7 percent, and about 30 percent of young people are absolutely unwilling to own their own business. In 2007 there was an increase in the proportion of those who call high taxes an obstacle to entrepreneurship (from 23 percent in 2006 to 36 percent in 2007). Every third person does not want to do business because of the economic and political situation. Another obstacle is the bureaucracy (22 percent).”

What should be changed on the labor market to increase the proportion of employed young people?

“The situation with young people depends greatly on the nationwide economic situation and policies of the new government. It cannot be radically changed by spontaneous actions: it will take a lot of time to create conditions for small businesses, minimize governmental interference in the private sector, and reform the system of employment remuneration. The survey proved once again that in order to create a competitive Ukrainian economy and integrate it into the global space, you must not only improve the organizational and technological structures of the national economy, but also reform the labor market and increase the competitiveness of labor resources in Ukraine. Today’s young people realize that the world is becoming an undivided whole, so they are not afraid to realize themselves in another country. Young people are not afraid of changes and are very open to reforms. All we need is a catalyst that will speed up all the necessary changes and create favorable conditions in the field of youth employment.