ASIM ERDİLEK

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ASIM ERDİLEK
March 22, 2012, Thursday

Global scourge of youth unemployment (1)

Unemployment not only inflicts irrecoverable output loss on society, wasting our ultimate and most precious economic resource and robbing jobless individuals of their livelihood, but also often damages their mental and physical health, self-esteem and personal dignity.

"You take my life when you do take the means whereby I live," despairs Shylock, in Shakespeare's “The Merchant of Venice,” in depicting the scourge of unemployment. Amid the still uncertain and uneven recovery from the Great Recession the global job crisis has persisted. The crisis is worse than what the still exceptionally high official rates of unemployment indicate, according to recent studies by the International Labor Organization (ILO). To absorb the new entrants into the labor market and the existing 200 million unemployed, of whom 75 million are young people, 40 million new jobs have to be created globally every year over the next decade.

I will focus on socially and politically the most dangerous dimension of the jobs crisis, the global scourge of youth unemployment, based on the ILO report “The Youth Employment Crisis: Time for action.” This biennial report, released last week, is for general discussion at the 101st session of the International Labor Conference, to be held in Geneva May 30-June 15. The 116-page report follows the ILO report “Global Employment Trends for Youth -- Special Issue on the Impact of the Global Economic Crisis on Youth,” published in August 2010 and updated last October.

There are over 1.2 billion young people, almost 20 percent of the world population, with about 90 percent living in developing countries. Youth, five out of 10 without a job in Greece and Spain, the hardest hit by the eurozone crisis, are on average three times and in some countries five times more likely to be unemployed than adults. Last year, we saw an explosion in political and social protests around the world, led largely by frustrated youths -- especially during the Arab Spring in North Africa and the Middle East with the chronically highest youth unemployment rates in the world -- who clamored for jobs as well as political freedom and social justice. Youth unemployment reveals our failure to convert the youth dividend during the demographic transition, typically a 50-year-long window of opportunity, into accelerated development in countries such as Turkey, experiencing the youth bulge in their working-age populations.

The ILO report analyzes the worsening vulnerabilities of youth, defined as men and women 15 to 24 years old, to economic and other ravages of unemployment as a ticking time bomb. It emphasizes that unemployment suffered when young often severely damages prospects of long-term steady and gainful employment, partly due to chronic harmful worker behavior patterns that emerge during feelings of uselessness and the boredom of idleness. Youth unemployment also breeds social exclusion and deep resentment that can result in anti-social and criminal activities.

The ILO report's major findings about the global trends can be summarized as follows:

(1) At the end of 2011, youth unemployment in the world reached 74.7 million persons, 4 million greater than that in 2007 before the global financial crisis. The youth unemployment rate jumped from 11.7 percent to 12.7 percent between 2007 and 2011, a growing social and political danger as well as a huge waste of economic potential. The global youth unemployment rate had been trending down before the global financial crisis but was still much higher than the adult unemployment rate.

(2) We have to view this short-term trend in the youth unemployment rate in the context of the long-term trends in the youth labor participation rate (employment-to-labor force ratio) and the share of youth who are employed in the youth population (employment-to-population ratio). Both rates have been trending down globally. Between 2000 and 2011, the youth labor force participation rate decreased from 52.9 percent to 48.7 percent, and the share of youth who were employed dropped from 46.2 percent to 42.6 percent. These trends are partly due to the higher proportion of youth engaged in education, but the discouragement of even university-educated youth from work, especially in the formal sector, by dysfunctional labor market structures and policies, is another reason. Bad macroeconomic and structural policies, causing sluggish growth, also inhibit youth as well as overall employment.

(3) The youth unemployment rate, bad as it is, does not reflect the dire predicament of young workers who toil predominantly under informal, intermittent and insecure work conditions, with meager social protection that result in poor productivity and low wages. Young workers are usually last in during economic booms and first out during economic busts. They often have to settle for temporary and part-time low-wage jobs with no prospect of upward mobility. Suffering from excessive decent work deficits, they are more susceptible to poverty than older workers. Their share of the world's total working poor exceeds their share of total global employment.

The rest of the ILO report, which contains findings by region and by gender besides the global ones I summarized, deals with the various policies to increase youth employment. Next week, I will view, based on TurkStat data, Turkey's youth unemployment problem from a global perspective.

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