Global Youth Unemployment Remains at Crisis Levels

Global Youth Unemployment Remains at Crisis Levels

James Heintz: 75 million youth in the global labor market are unemployed and few governments are taking common sense steps to address the problem -   October 3, 14
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James Heintz has written on a wide range of economic policy issues, including job creation, global labor standards, egalitarian macroeconomic strategies, and investment behavior. He has worked as an international consultant on projects in Ghana and South Africa, sponsored by the International Labor Organization and the United Nations Development Program, that focus on employment-oriented development policy. He is co-author, with Nancy Folbre, of The Ultimate Field Guide to the U.S. Economy. From 1996 to 1998, he worked as an economist at the National Labour and Economic Development Institute in Johannesburg , a policy think tank affiliated with the South African labor movement. His current work focuses on global labor standards, employment income, and poverty; employment policies for low- and middle-income countries; and the links between macroeconomic policies and distributive outcomes.


Global Youth Unemployment Remains at Crisis LevelsJAISAL NOOR, TRNN PRODUCER: Welcome to The Real News Network. I'm Jaisal Noor in Baltimore. And welcome to this week's edition of The PERI Report.

The problem of youth unemployment and underemployment has been highlighted by a new study which finds that 75 million youth in the global labor market are unemployed and 60 to 90 percent of young workers in developing countries are employed within the informal sector.

To talk about the study and what it means, we're joined by James Heintz. He's an associate director and research professor at PERI.

Thank you so much for joining us, James.


NOOR: So, James, what differentiates this growing youth unemployment in developed countries compared to developing countries? What makes it so bad in developing countries?

HEINTZ: Well, I think what you see in developing countries is not necessarily a problem of youth unemployment as you do in countries in the Global North. But often youth are employed in very precarious, low-quality jobs. And that's what we mean by youth informality. That study that you cited said that 75 million youth worldwide are unemployed, which is a huge number. But you compare that to the 500 million (that's half a billion) youth that are actually employed, and the vast majority of those youth are employed in very, very low-quality jobs. And a lot of that is taking place in developing countries.

NOOR: Can you talk about the specific challenges or dangers of this work in the informal economy?

HEINTZ: Well, it's very low-quality jobs. And often youth are employed in those jobs even though they have much higher qualification than those jobs actually demand. And so, I mean, to give a really graphic example, in 2011, a young fruit seller in Tunisia--his name was Mohamed Bouazizi--committed suicide. And that suicide set off all the riots that led to the Arab Spring. So it destabilized the entire country of Tunisia. So these tensions of being excluded, economically excluded and excluded for a long time from productive employment or realizing your own potential can have dramatic consequences.

NOOR: Now, what are some policies that would help young workers integrate into the formal economy and raise their living standards?

HEINTZ: Well, there's a large number of policies. There's active labor market policies that you try to go out there and match youth with the opportunities that are available, sharing information with them, bringing them in, building some skills. So there's those types of policies. There's just general macroeconomic policies that would support employment creation generally. And those will have a big impact on youth. Nowadays we are seeing a move towards austerity types of programs and cutbacks to government spending, which will have the reverse effect. And there's straightforward incentives that you can give to employers so that they will be more likely to hire young workers compared to the rest of the population. And so that could also address the asymmetric unemployment problem that youth face.

I think the big issue, though, is that youth don't have a lot of political voice. They don't have a lot of power. They're excluded from traditional bargaining situations. They have very low rates of unionization. And so they're often ignored in terms of policy formulation or they're seen as, you know, being tossed a small bone in terms of the overall employment challenge that many countries face.

NOOR: So you mentioned Mohamed Bouazizi, who helped spark the Arab Spring in Tunisia. And since the Arab Spring started, we've seen global protests, waves of protest across the world ever since then, now spreading to Brazil, Turkey, and elsewhere. How much of these global protests have been fueled by these same policies, this hopelessness that a lot of youth face?

HEINTZ: Well, I think there's a real feeling of growing exclusion from the global economy, especially among the young population, a lack of attention to these concerns, the fact that, you know, the Wall Street firms get bailed out while youth unemployment, youth issues are totally sidelined in the discussion, or programs that have supported youth in the past are now being cut.

And in terms of global youth unemployment issues, in the United States, for instance, the unemployment rate among youth--this is 16 to 24 years old--is about 16.2 percent. So it's about twice the national average for the U.S. If you look at countries like Greece and Spain that have been really hard hit by the austerity programs, youth unemployment is over 50 percent. So the level of exclusion these days is very extreme. And I think that's fueling a lot of frustration, and it's fueling political mobilization, although the political mobilization doesn't seem to be necessarily shifting policy yet.

NOOR: And finally, are there examples of forward-looking policies that countries have adopted that have actually improved youth employment?

HEINTZ: Yeah, there's a whole number of, you know, piecemeal on-the-ground programs and interventions that have taken place. There's youth entrepreneurship programs in countries in sub-Saharan Africa that try to get you to develop their own small-scale businesses. There's employment subsidy schemes in many countries that give employers an incentive to try to hire youth. There's a whole range of skills-building type of programs. So there's a whole kind of laundry list of programs out there. And different countries try different things.

But what I think is lacking is a coherent, systematic set of policies, a holistic approach to actually tackle this challenge, because it's gotten very, very extreme, and there's not a lot of movement in this area.

NOOR: James Heintz, thank you so much for joining us.

HEINTZ: Thank you.

NOOR: Thank you for joining us on The Real News Network.


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