Youth unemployment at all-time high

SINCE the onset of the global economic crisis, between 2007 and 2009, unemployment among young people aged 15 to 24 years has increased by 7.8 million, with 80.7 million young people, the highest number ever, struggling to find work in 2009.

These grim statistics have been highlighted by the International Labour Office (ILO) in its latest report Global Employment Trends for Youth, August 2010.

According to the ILO, the youth unemployment rate rose sharply during the economic crisis – more sharply than ever before – from 11.9% to 13.0% between 2007 and 2009. Between 2008 and 2009, the rate increased by 1 percentage point, marking the largest annual change over the 20 years of available global estimates and reversing the pre-crisis trend of declining youth unemployment rates since 2002.

These trends, the ILO points out, will have ‘significant consequences for young people as upcoming cohorts of new entrants join the ranks of the already unemployed’.

It further warns of the ‘risk of a crisis legacy of a “lost generation” comprised of young people who have dropped out of the labour market, having lost all hope of being able to work for a decent living’.

The ILO has forecast a continued increase in global youth unemployment to an all-time high of 81.2 million and a rate of 13.1% in 2010. In the following year, the number of unemployed youth is projected to decline to 78.5 million and the global youth unemployment rate to 12.7%.

According to the ILO, globally, as much as 90% of youth are living in developing economies in 2010, with the three Asian regions (South Asia, East Asia, and South-East Asia and the Pacific) accounting for more than half (55%) of the world youth population.

As regards the trends in youth unemployment, the report finds that before the crisis youth unemployment was declining in most regions of the world. The number of unemployed youth increased by 3.0% between 1998 and 2008 to 74.1 million in the latter year. The average annual growth rate of youth unemployment over the period was 0.3% while the average annual growth rate of the youth labour force was 0.6%, hence the overall declining trend in the youth unemployment rate.

Worldwide, the youth unemployment rate stood at 12.1% in 2008 (compared to 5.8% for the total unemployment rate and 4.3% for the adult unemployment rate). The rate increased from 2007 by 0.2 percentage point, while compared to the rate in 1998 it had decreased by 0.4 percentage point.

The report underscores that youth unemployment rates continued to be much higher than adult rates in all regions. In most regions, youth were nearly three times more likely to be unemployed than adults, resulting in a global average ratio of youth-to-adult unemployment rate of 2.8 in 2008.

The young working poor

On the basis of available data, says the ILO, young workers appear to be disproportionately susceptible to poverty, reinforcing the notion that youth are not just disadvantaged in terms of accessing work, but also in finding productive work that provides sufficient income to escape poverty.

Higher labour force participation rates of the young working poor (living below the $1.25-a-day poverty line) also reflect lost opportunities for many of the youth who might otherwise attend school and acquire skills and education that could raise their future productivity and potential earnings.

Many young working poor lacked even a primary-level education. In Colombia, 59.9% of the young working poor (in 2003) did not have a primary education, versus 19.9% of youth living above the $2 poverty line. In the Philippines, 35.4% of the young working poor lacked a primary-level education, versus 6.2% of the non-poor working youth.

Overall, it is estimated that 152 million young workers were living in poor households (with per capita expenditure of less than $1.25 a day) in 2008, amounting to 28.1% of all young workers in the world. This is down from an estimated 234 million young working poor in 1998, which corresponded to a youth working poverty rate of 46.2%. Young people therefore accounted for 24.0% of the world’s working poor, versus 18.1% of total global employment in 2008.

According to the ILO, in many countries, the young working poor are employed in the agricultural sector. The (simple) average share of workers in the agricultural sector across the 21 countries for which sector-level data are available is 70.4% for youth living below the $1.25-a-day poverty line versus only 40.5% for those above the $2-a-day poverty line.

The report, written in the midst of the global economic crisis, also highlights the impact of the crisis on youth in labour markets around the world.

According to the ILO, the crisis affects each region differently depending on the socioeconomic context and policy responses of the countries in the region. Measured in terms of youth unemployment alone, the impact of the crisis on youth was largest in the developed economies.

No other regions came close to the remarkable 4.6- and 3.5-percentage-point increases in the youth unemployment rates seen between 2008 and 2009 in two regions, the Developed Economies and European Union, and Central and South-Eastern Europe (non-EU) and CIS (Commonwealth of Independent States). These are the largest annual increases in youth unemployment rates ever recorded in any region, stresses the ILO.

Youth in the lower-income regions were not impacted to a great extent by increased unemployment, with the exception of Latin America and the Caribbean where the youth unemployment rate rose from 14.3% to 16.1% between 2008 and 2009.

The increase in the youth unemployment rate in the Developed Economies and European Union has been strong enough to propel the regional average above those of two regions – South-East Asia and the Pacific and Latin America and the Caribbean – that had higher rates in the pre-crisis years.

Challenges for young women

In developing regions, the crisis exacerbated the challenges of young women in finding work. In terms of overall job losses (all ages), there was no difference in the magnitude of the increase in the global female and male unemployment rates; female rates increased from 6.0% in 2007 to 6.7% in 2009 compared to an increase from 5.5% to 6.2% for male rates. For youth, however, the unemployment impact was greater for women than men. The youth female rate rose from 12.1% to 13.2% between 2007 and 2009, and the youth male rate from 11.8% to 12.9%.

The crisis has thus led to some changes in the gap between female and male youth unemployment rates. With the exceptions of the Developed Economies and European Union and East Asia, the unemployment rates of young females consistently exceed those of young males.

Young women in most regions have become even more likely to be unemployed than young men. There were three regions where in 2007 a young woman was already much more likely to suffer unemployment than a young man; by 2009, the gap had increased even further to 7.3 percentage points in Latin America and the Caribbean, 10.5 points in the Middle East and 11.4 points in North Africa.

‘Clearly, what is happening in these regions is that where job markets were already highly competitive for youth, as the market becomes even more difficult during the economic crisis, young women are pushed even further to the back of the queue,’ says the ILO.

The report also finds that the unemployment rate of youth has proven to be more sensitive to the economic crisis than that of adults. The overall percentage point increase in the global youth unemployment rate between 2007 and 2009 exceeded that of the adult rate (1.1 percentage points compared to 0.7 percentage point), but still the ratio between the two rates actually decreased slightly from 2.8 to 2.7.

It is suspected that youth will face a longer recovery than adults, mainly because they face a situation whereby upcoming cohorts of new entrants (first-time job-seekers) join the ranks of the already unemployed (job losers).

Only in the Middle East and North Africa are youth unemployment rates expected to continue the upward path in 2011. For all other regions, slight improvements over the peak years (2010 in most cases) are forecast.

‘In developing countries, crisis pervades the daily life of the poor,’ said ILO Director-General Juan Somavia. ‘The effects of the economic and financial crisis threaten to exacerbate the pre-existing decent work deficits among youth. The result is that the number of young people stuck in working poverty grows and the cycle of working poverty persists through at least another generation.’

‘Social time-bomb’

Meanwhile, the International Trade Union Confederation (ITUC) described the high and rising levels of youth unemployment globally as a ‘social time-bomb’, which it said risks damaging the social, economic and political fabric of countries around the world.

. An entire generation of young people is being left behind, and the consequences of this for society will be severe. Governments have to act urgently to get job-creation moving, by maintaining economic stimulus where it is needed rather than by cutting public expenditure.’

‘Trade unions across the world are pressing governments to adopt macroeconomic policies which put employment at the centre, as well as specific measures to improve the access of young people to decent jobs and quality education and training. We as trade unions also need to do more to reach out to young people, to keep their concerns at the top of our own agenda both in terms of government policy as well as protection in the labour market and the workplace,’ she added. –Source : SUNS, Kanaga Raja