As leaders and young people around the world are acutely aware, youth unemployment levels are already disturbingly high and the problem is getting worse, says Roy Muller, lead partner, Human and Social Services for KPMG in South Africa.
In South Africa, the unemployment rate among youth increased from 32,7% to 36,1% between 2008 and 2014; in the post recessionary period, the unemployment rate has been consistently higher among youth than among adults by more than 20%age points. This is according to a report released by Statistics South Africa, which examined in detail various aspects of the situation faced by youth aged 15 to 34 years in the South African labour market.
An exploding youth population and lag in job growth (demand) are key causes. Other factors such as the global financial crisis, the 2009 Eurozone crisis, and longer term trends in global trade, technology, and competition, have also played a key role in this critical issue.
A complex issue of epic proportions
Out of 1,2-billion youth aged 15 to 24, 30% are not in employment, education, or training (NEETs). This translates to 357,7-million young people.
* 341-million are in developing countries, and 220-million are in Asia.
* 12,5% or 75-million are unemployed (looking for work).
Every year, it is estimated that over 120-million adolescents reach 16 years of age and are looking to enter the labour market. This is a global concern:
* In Namibia, Saudi Arabia and South Africa, nearly nine out of every ten youth is outside of the labour force.
* But this is not an issue just for developing countries. Greece and Spain had youth unemployment rates of over 50% in 2012.
Barack Obama has said, “At some point we’ve got to modulate our approach to ensure that we don’t just lose a generation who may never recover.”
Across the world, governments, employers, and civil society organisations have recognised the need to take action on this problem and are currently pursuing a wide menu of supply and demand policy and programme options. The supply interventions include improving the quality of skills and attributes of those seeking work and the demand includes increasing the provision of quality jobs for young people. Action can be taken simultaneously on both.
Measures such as improving general skills within the education system, providing apprenticeships, creating employer incentives and encouraging entrepreneurship can play a part. Regardless of the direction, one thing is clear: these parties must work together to create meaningful change.
Similarly, governments can take action to encourage increased hiring of youth by offering employment guarantees or reducing the costs and risks to employers of hiring young workers.
The South African government is implementing a number of initiatives across policy domains and sectors to counter this trend. For example, government-funded public works initiatives have targeted youth participation by setting quotas (for example 40% for the Expanded Public Works Programme, a funding initiative to increase the amount of service jobs across all sectors of government. Introduction of the youth employment tax incentive which in its first month recorded 56 000 beneficiaries.
While these tactics are effective means, they must be considered in light of available public funding, which continues to constrain governments.
“Findings suggest that youth guarantees can be effective in achieving the primary objective of ensuring a smooth transition of young people into the labour market. They can play an important role in keeping young people connected to the labour market or in education, thereby preventing the scarring effects arising from long-term unemployment, including those related to negative wage effects.”
Young people can also directly contribute to addressing the challenge. In Burundi, for example, 94% of jobs for young people come from the informal private sector (for example, agriculture, trades and sole traders). These jobs are often not sustainable, temporary and don’t provide a liveable wage and worse, they hide the true level of unemployment. In response, young people created Burundi 3.0, a mobile phone service that makes it easier for young people to find work by providing daily job alerts. This is just one example of young entrepreneurs not just creating jobs for themselves but also helping others with their job search.