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New ILO study says youth unemployment rising, With hundreds of millions more working but living in poverty

Friday, 27 October 2006
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ILO/06/00

New ILO study says youth unemployment rising,

With hundreds of millions more working but living in poverty

 

GENEVA (ILO News) – The number of unemployed youth aged 15 to 24 rose over the past decade, while hundreds of millions more are working but living in poverty, according to a new report by the International Labour Office (ILO).

While the number of young unemployed increased from 74 million to 85 million, or by 14.8 percent between 1995 and 2005, more than 300 million youth, or approximately 25 per cent of the youth population, were working but still living below the US $2 per day poverty line.

The ILO report estimates that at least 400 million decent and productive employment opportunities—simply put, new and better jobs—will be needed in order to reach the full productive potential of today’s youth. The report also says yyouth are more than three times as likely to be unemployed than adults and that the relative disadvantage is more pronounced in developing countries, where youth represent a significantly higher proportion of the labour force than in developed economies.

“Despite increased economic growth, the inability of economies to create enough decent and productive jobs is hitting the world’s young especially hard,” said ILO Director-General Juan Somavia. “Not only are we seeing a growing deficit of decent work opportunities and high levels of economic uncertainty, but this worrying trend threatens to damage the future economic prospects of one of our worlds’ greatest assets – our young men and women.”

The report emphasizes that today’s youth face serious vulnerabilities in the world of work and warns that a lack of decent work, if experienced at an early age, may permanently compromise their future employment prospects. The report adds urgency to the UN call for development of strategies aimed at giving young people a chance to maximize their productive potential through decent employment.

Among the report’s key findings:

Of the 1.1 billion young people aged 15 to 24 worldwide, one out of three is either seeking but unable to find work, has given up the job search entirely or is working but living on less than US$2 a day.

While the youth population grew by 13.2 per cent between 1995 and 2005, employment among young people grew by only 3.8 per cent to reach 548 million.

Unemployed youth make up 44 per cent of the world’s total unemployed despite the fact that their share of the total working-age population aged 15 and over is only 25 per cent .

The youth unemployment rate, which rose from 12.3 percent in 1995 to 13.5 per cent in 2005, was far higher than the adult unemployment rate of 4.6 percent.

“Idle youth is a costly group,” the report says, noting that an inability to find employment creates a sense of vulnerability, uselessness and redundancy. There are costs, therefore, to youth themselves, but also to economies and societies as a whole, both in terms of lack of savings, loss of aggregate demand and less spending for investment as well as social costs for remedial services such as preventing crime and drug use.

“All this is a threat to the development potential of economies,” Mr. Somavia said. “Today, we are squandering the economic potential of an enormous percentage of our population, especially in developing countries which can least afford it. Focusing on youth, therefore, is a must for any country.”

Job crisis hits youth hard throughout the world

The highest regional youth unemployment rate was observed in the Middle East and North Africa at 25.7 per cent. Central and Eastern Europe (non-EU) and CIS had the second highest rate in the world with 19.9 per cent. Sub-Saharan Africa’s rate was 18.1 per cent, followed by Latin America and the Caribbean (16.6 per cent), South East Asia and the Pacific (15.8 per cent), the developed economies and European Union (EU) (13.1 per cent), South Asia (10 per cent) and East Asia (7.8 per cent).

The Developed Economies and EU region was the only grouping to show a considerable decrease in youth unemployment over the last 10 years. The report attributed this to a declining number of young people in the labour force rather than successful employment strategies.

The share of youth who are employed in the youth population (the youth employment-to population ratio) decreased from 51.6 to 47.3 over the last ten years. Central and Eastern Europe (non-EU) and CIS showed the largest decrease in the employment-to-population ratio – by 11.8 per cent – between 1995 and 2005 .

Young women face even greater challenges in the labour market, as far fewer women are likely to be working or looking for work. The gap in labour force participation rates between young men and women are larger in developing regions – for example, 35 percentage points difference in South Asia, 29 in the Middle East and North Africa, 19 in Latin America and the Caribbean, 13.4 in Central and Eastern Europe (non-EU) and CIS and 16 in both South East Asia and Pacific and sub-Saharan Africa,. Such gaps result from cultural traditions, lack of opportunities for young women to combine work and household duties, and a tendency of labour markets to shed young women more rapidly than men when fewer job opportunities are available.

At the same time, even having a job today isn’t enough to guarantee a young person’s future economic sustainability. With the persistence of poverty among as many as 56 per cent of young workers—and the possibility that they may be facing long working hours, temporary and/or informal contracts, with low pay, little or no social protection, minimal training and no voice at work—it becomes clear that having a job is not the same as having a decent job.

The report also cited a “worrisome” increase in the number of young people who are neither in employment nor in education. Using limited country-level data, the report estimated that Central and Eastern Europe has the highest share of youth who are neither in employment nor education – up to 34 per cent.. Four countries in the CIS region - Azerbaijan, the Republic of Moldova, Tajikistan and Uzbekistan, saw a decrease in the enrolment ratio in higher education while youth inactivity rates increased at the same time. It is in these countries that young people tend to become “discouraged” and fall outside the labour force because they feel that no job opportunities are available, the report says.

The share of youth who are neither in employment nor in education was 27 per cent in sub-Saharan Africa, 21 per cent in Central and South America and 13 per cent in the developed economies and European Union.

Beyond identifying the main labour market challenges facing youth, the report attempts to clarify common misconceptions regarding youth labour markets and finds that:

Access to education is still a problem for many young people and illiteracy remains a substantial challenge in many developing countries.

Higher educational attainments do not guarantee a path in finding employment, in particular decent employment.

Where there is little economic growth or a shrinking employment content of growth, job security often overrules job satisfaction as a motivator for young employees.

Youth unemployment rates only show the tip of the iceberg regarding the problems young people face in the labour market and don’t give a complete picture of youth labour market challenges. Two groups, together, outnumber the unemployed: the discouraged youth and the young working poor.

Youth are not a homogenous group; therefore, targeted interventions aimed at overcoming the specific disadvantages that some youth face in entering and remaining in the labour market will be warranted.

The agricultural sector, and thus rural areas, still accounts for more than 40 per cent of total employment in the world and is still the dominant employer in many regions of the world. Despite increasing rural to urban migration, therefore, employment creation in rural areas should still play a large role in youth employment strategies and overall poverty reduction strategies. In fact, improving wages and reducing poverty within the rural economy will go a long way toward stemming the tide of migration of young people into already crowded urban cities.

The report said a young person whose first experience in the labour market is one of long-term unemployment is likely to move between unemployment spells and low-wage employment throughout working life. The report calls for targeted and integrated national policies and programmes, fostered by international aid, to reach the most vulnerable youth and to bring them back into the fold of a civil society that can benefit from their participation.

Decent and productive work for youth is a commitment of the Millennium Declaration. In this context the Youth Employment Network (YEN) – a global alliance among the United Nations, the World Bank and the ILO – was established in 2001, to support countries to develop National Action Plans on youth employment.

Azerbaijan is one of nineteen lead countries of the YEN. With the technical assistance of the ILO, this country has mainstreamed action for youth employment into its National Employment Strategy. In 2006 Georgia also joined the Youth Employment Network as a lead country

“It is an undeniable tenet – and now one that is recognized within the UN as well as other international organizations and governments – that only through decent employment opportunities can young people get the chance to work themselves out of poverty,” Mr. Somavia said, “Youth employment strategies are a key contribution to meeting the Millennium Development Goals.”

 

For more information, please contact: ILO Department of Communication at
Tel.: +4122/799-8272, communication@ilo.org or

ILO Subregional Office for Eastern Europe and Central Asia at

Tel.: +7 495/ 933- 0897 bogdanova@ilo.org

or see http://www.ilo.org/trends

 

Global Employment Trends for Youth ( Geneva , 2006), October. http://www.ilo.org/trends ; ISBN 92-2-118627-X and 978-92-2-118627-4 (print), ISBN 92-2-118628-8 and 978-92-2-118628-1 (web pdf).

The calculation is the sum of 85 million unemployed youth plus 309 million working poor youth (at the US$2 a day level) plus 20 million discouraged youth (4 per cent of 525 million inactive youth).

This is a measure of the percentage of young people who are without work and looking but unable to find work in the youth labour force. Differences to earlier estimates (in the 2004 Global Employment Trends for Youth report) are due to the fact that more country level data were available for input into the model used to generate missing country estimates and ultimately the world and regional aggregates. Other input data used in the estimation model have changed as well, including revisions of the IMF estimates of GDP growth.

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