Gen Y Risks Becoming New 'Lost Generation'

July 24, 2009 — -- With one in five Gen Yers unable to find work, a new "lost generation" may be in the making in Europe. Policymakers fear long-term unemployment could diminish the generation's future prospects on the labor market.

On paper, Jerome Delorme seems like a pretty desirable job candidate. The 23-year-old has a master's degree in European studies from the prestigious Sciences Po University in Grenoble -- once a sure ticket to a top company, even in hard times. And he spent a year studying in Dublin, speaks fluent English, and has already had several high-profile internships. But in three months of looking for work, Delorme has been able to land only another internship, at a non-profit organization. "The crisis has made getting a real job very difficult," says the native of the southern French city of Valence.

Delorme is typical of Europe's Gen Y these days. Most of his friends are also pounding the cobblestones in search of employment -- as are about 5 million other young Europeans, or about 20 percent of the under-25 population, the European Union estimates. That's nearly a third higher than a year ago and well above the 8.9 percent unemployment rate for the EU as a whole. In some countries the situation is far worse. Nearly 37 percent of Spain's Gen Yers can't find work. In France, it's 24 percent, vs. 17 percent in the US.

Policymakers worry prolonged unemployment will hurt an entire generation's ability to compete in the workplace. When the economy finally recovers, many of the under-25s will have become over-25s, and younger rivals will be nipping at their heels for entry-level jobs. The big fear: Europe's Gen Yers will suffer the fate of Japan's Lost Generation -- young people who came of age in the recession-wracked 1990s but lacked the skills to find good jobs even after the economy started to pick up steam.