Lithuania should step up efforts to boost youth employment | WPN World People News

Lithuania needs to boost job creation and reduce labour costs in order to help more young people into work, according to a new OECD report.

Investing in Youth: Lithuania says that, despite the youth unemployment rate falling to 15.3% in the third quarter of 2015, it remains higher than before the crisis (10%). At the same time, only 28.6% of young Lithuanians are employed, compared to an OECD average of 40%.

“With a rapidly ageing population and shrinking workforce, it’s essential that Lithuania give young people the chance of a good job so they can play their part in the country’s future economic growth,” said Mark Pearson, OECD Deputy Director of Employment, Labour and Social Affairs at the launch of the report in Vilnius. “Too many youth are still being left behind and more urgent, comprehensive action is needed.”

A key challenge is poor job quality: many youth hold low-paid, informal jobs, with a high risk of unemployment and low benefits. These usually offer few opportunities for training or career development.

The report notes that boosting youth employment in Lithuania above all requires supporting job creation. High labour costs that affect the willingness and ability of employers to hire youth should be reduced. Strict employment protection legislation in Lithuania also deters employers from hiring young people. Introducing more flexibility, while ensuring adequate social protection and assistance for laid-off workers, is needed.

To help more young people into work, the OECD also recommends that Lithuania:

● Raise coverage and generosity of unemployment benefits for youth to counterbalance planned reductions in severance pay.

● Consider a reduced minimum wage for youth to support job creation. To avoid this creating a rise in the number of low-pay jobs for young people, this should be combined with an increase in the statutory level of monthly non-taxable income.

● Strengthen the public employment service so that staff can provide more personalised support for youth, especially in rural areas.

● Revamp vocational education and apprenticeship. Current initiatives show promise but enrolment rates are low by international standards. Involving the private sector and increasing financial incentives for firms to hire apprentices would help.

Source: Organization for Economic Co-operation and Development