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Youth unemployment getting even worse

An ILO paper shows that the impact of the euro crisis is spreading as far afield as East Asia and Latin America, worsening the situation for many young jobseekers.

News | 04 September 2012

GENEVA (ILO News) – Jobless rates among young people will get even worse globally as the spillover of the euro crisis spreads from advanced to emerging economies, according to an ILO paper titled “Global Employment Outlook: Bleak Labour Market Prospects for Youth”.

Video interview
Ekkehard Ernst, lead author of the paper and chief of the ILO’s Employment Trends Unit
“Ironically, only in developed economies are youth unemployment rates expected to fall in the coming years, but this follows the largest increase in youth unemployment among all regions since the start of the crisis,” said Ekkehard Ernst, lead author of the paper and chief of the ILO’s Employment Trends Unit.

The new forecasts show the youth unemployment rate in developed economies dropping gradually, from 17.5 per cent this year to 15.6 per cent in 2017. This is still far higher than the rate of 12.5 per cent registered in 2007, before the crisis struck.

Much of this decline in the jobless rate is not due to improvements in the labour market, but rather to large numbers of young people dropping out of the labour force altogether due to discouragement. These discouraged youth are not counted among the unemployed.

Global and Regional Figures

  • The projected decline in youth unemployment in the developed economies region is not expected to be enough to pull the global rate downwards.
  • The paper says the global youth unemployment rate will reach 12.9 per cent by 2017 – up 0.2 percentage points from forecasts for 2012.
  • The impact of the euro crisis is expected to expand well beyond Europe, affecting economies in East Asia and Latin America as exports to advanced economies have faltered.
  • In North Africa and the Middle East, youth unemployment rates are projected to remain above 25 per cent over the next years and might even rise further in parts of these regions.
  • Youth unemployment rates are forecast to rise from 9.5 per cent this year to 10.4 per cent in 2017 in East Asia, with little change projected in Latin America and the Caribbean and in Sub-Saharan Africa.
Youth unemployment rates forecasts 2012 2017
Global 12.7 % 12.9 %
Central and South Eastern Europe 16.9 % 17 %
Developed economies 17.5 % 15.6 %
East Asia   9.5 % 10.4 %
Latin America & the Caribbean 14.6 % 14.7 %
Middle East 26.4 % 28.4 %
North Africa 27.5 % 26.7 %
South Asia 9.6 % 9.8 %
South East Asia & the Pacific  13.1 %  14.2 %
Sub-Saharan Africa 12 % 11.8 %

 

Supporting young workers has huge benefits

Even in countries with early signs of a jobs recovery and where new vacancies are opening up, many unemployed youth still find it difficult to land a job. For example, a construction worker whose job fell victim to the housing bust might not have the skills needed in sectors that are hiring.

“This leads to discouragement and rising NEET rates (“neither in employment, education or training”) among young people,” said Ernst.

“Schemes using employment guarantees and an emphasis on training could help get jobseekers off the street and into useful activities, providing a safeguard against further economic stress,” he added.

According to the paper, such youth guarantees can come at very limited cost, less than half a per cent of GDP among European countries.

“In times of constrained public finances, this may seem like a large additional burden, but it will be less than the additional costs that come from young unemployed people permanently losing touch with the labour market,” the update said.

The ILO's call for action

At its annual conference in June 2012, the ILO adopted a Resolution calling for immediate, targeted and renewed action to tackle the youth employment crisis.

The resolution provides a portfolio of tried and tested measures in five areas: macro-economic policies, employability, labour market policies, youth entrepreneurship and rights. It underscores the need for balance, coherence and complementarity across the policy measures.

The ILO call for action on youth employment calls on governments and the social partners:
  • To foster pro-employment growth and decent job creation through macroeconomic policies, employability, labour market policies, youth entrepreneurship and rights to tackle the social consequences of the crisis, while ensuring financial and fiscal sustainability.
  • To promote macroeconomic policies and fiscal incentives that support employment and stronger aggregate demand, improve access to finance and increase productive investment – taking account of different economic situations in countries.
  • To adopt fiscally sustainable and targeted measures, such as countercyclical policies and demand-side interventions, public employment programmes, employment guarantee schemes, labour-intensive infrastructure programmes, wage and training subsidies and other specific youth employment interventions. Such programmes should ensure equal treatment for young workers.

Tags: youth employment, youth unemployment

Unit responsible: Department of Communication (DCOMM)

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