World economic crisis has spurred a record increase in youth unemployment says ILO
GENEVA (ILO News) -- The global youth unemployment rate has reached its highest level on record, and is expected to increase through 2010, the International Labour Organization (ILO) said in a new report issued to coincide with the launch of the UN International Youth Year on 12 August.
The report ILO Global Employment Trends for Youth 2010 says that of some 620 million economically active youth aged 15 to 24 years, 81 million were unemployed at the end of 2009 -- the highest number ever. This is 7.8 million more than the global number in 2007. The youth unemployment rate increased from 11.9 percent in 2007 to 13.0 percent in 2009.
It adds that these trends will have “significant consequences for young people as upcoming cohorts of new entrants join the ranks of the already unemployed" and 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".
According to the ILO projections, the global youth unemployment rate is expected to continue its increase through 2010, to 13.1 per cent, followed by a moderate decline to 12.7 per cent in 2011. The report also points out that the unemployment rates of youth have proven to be more sensitive to the crisis than the rates of adults and that the recovery of the job market for young men and women is likely to lag behind that of adults.
The report indicates that in developed and some emerging economies, the crisis impact on youth is felt mainly in terms of rising unemployment and the social hazards associated with discouragement and prolonged inactivity.
The ILO report points out that in developing economies, where 90 per cent of young people live, youth are more vulnerable to underemployment and poverty. According to the report, in the lower income countries, the impact of the crisis is felt more in shorter hours and reduced wages for the few who maintain wage and salaried employment and in rising vulnerable employment in an ‘increasingly crowded’ informal economy.
The report estimates that 152 million young people, or about 28 percent of all the young workers in the world, worked but remained in extreme poverty in households surviving on less than US$1.25 per person per day in 2008.
"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."
The ILO report explains how unemployment, underemployment and discouragement can have a long-term negative impact on young people, compromising their future employment prospects. The study also highlights the cost of idleness among youth, saying "societies lose their investment in education. Governments fail to receive contributions to social security systems and are forced to increase spending on remedial services".
"Young people are the drivers of economic development," Mr. Somavia said. "Foregoing this potential is an economic waste and can undermine social stability. The crisis is an opportunity to re-assess strategies for addressing the serious disadvantages that young people face as they enter the labour market. It is important to focus on comprehensive and integrated strategies that combine education and training policies with targeted employment policies for youth."
“Today the UN is launching the International Year of Youth. Through this year's themes of dialogue and mutual understanding, we will be better placed to shape viable policies that respond to the need and aspirations of young people for decent work," he added.
Key findings in youth labour market trends at the global level:
* Between 2007 and 2009, youth unemployment increased by 7.8 million (1.1 million in 2007/08 and 6.7 million in 2008/09). In comparison, over the course of the ten-year period prior to the current crisis (1996/97 to 2006/07), the number of unemployed youth increased, on average, by 191,000 per year.
* The global youth unemployment rate rose from 11.9 to 13.0 per cent 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.
* Between 2008 and 2009, the number of unemployed youth increased by 9.0 per cent, compared to a 14.6 per cent increase in the number of unemployed adults. In terms of unemployment rates, however, the impact on youth has proven to be greater than that of adults. The youth rate increased by 1.0 percentage point compared to 0.5 points for the adult rate over 2008/09.
* In 2008 young people accounted for 24 per cent of the world’s working poor, versus 18.1 per cent of total global employment.
* Young women have more difficulty than young men in finding work. The female youth unemployment rate in 2009 stood at 13.2 per cent compared to the male rate of 12.9 per cent (a gap of 0.3 percentage point, the same gender gap seen in 2007).
* The projections show a longer expected recovery for youth compared to adults. Youth unemployment numbers and rates are expected to decline only in 2011. The ILO forecasts a continued increase in global youth unemployment to an all-time high of 81.2 million and a rate of 13.1 per cent in 2010. In the following year, the number of unemployed youth is projected to decline to 78.5 million with a 12.7 per cent rate. Meanwhile, the adult rate is expected to peak in 2009 at 4.9 per cent and then decline by 0.1 percentage points in both 2010 and 2011 (to 4.8 and 4.7 per cent, respectively).
* Youth unemployment rates increased by 4.6 percentage points in Developed Economies & the European Union between 2008 and 2009 and by 3.5 points in Central & South-Eastern Europe (non-EU) & CIS. These are the largest annual increases in youth unemployment rates ever recorded in any region. The youth unemployment rate of 17.7 per cent in 2009 in the Developed Economies & European Union is the highest the region has seen since regional estimates have been available (since 1991).
* In most regions, young women continued to be the hardest hit by unemployment. Only in the Developed Economies & European Union were young males harder hit; the increase in the male youth unemployment rate between 2007 and 2009 was 6.8 percentage points compared to 3.9 points for young women.
* In some countries, including Spain and the United Kingdom, there was an increase in inactivity among youth in the crisis years. This implies an increase in discouragement, whereby growing unemployment has led some young people to give up the job search.
* In developing economies, the crisis adds to the ranks of vulnerable employment and informal sector employment. There is supporting evidence of such an increase in Latin America where between 2008 and 2009 the number of own-account workers increased by 1.7 per cent and the number of contributing family workers by 3.8 per cent. The region also experienced an increase in the share of teenagers engaged in informal sector employment during the crisis.
* For almost all regions, slight improvements are forecast as compared with the peak unemployment years (2010 in most cases). Only in the Middle East and North Africa are youth unemployment rates expected to continue on an upward path in 2011. The largest decrease (1 percentage point) in youth unemployment rates is expected for Central & South-Eastern Europe (non-EU) & CIS. The projected 2011 rate in the Developed Economies & European Union would represent a 0.9 percentage point decrease from the previous year. However, the projected rate of 18.2 per cent would still be higher than was ever seen in the pre-crisis period (1991-2007).