Unemployment among youth getting worse: ILO

The jobless rate among young people will get even worse globally as the spillover of the euro crisis spreads from advanced to emerging economies, according to the 'Global Employment Outlook: Bleak Labour Market Prospects for Youth'.

In South Asia, youth unemployment rates are forecast to rise from 9.6 per cent this year to 9.8 per cent in 2017, said the International Labour Organisation (ILO)'s report launched today.

The ILO called on governments and social partners for action on youth employment 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.

It has also asked 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.

The ILO has also asked governments to adopt fiscally sustainable and targeted measures like 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 ensuring equal treatment to young workers.

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.

"It leads to discouragement and rising NEET rates ('neither in employment, education or training') among young people," said lead author and chief of ILO’s Employment Trends Unit Ekkehard Ernst.

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

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

"Ironically, only in developed economies are youth unemployment rates expected to fall in the coming years but it follows the largest increase in youth unemployment among all regions since the start of the crisis,” said Ernst.

Much of the 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. The discouraged youth are not counted among the unemployed.

The ILO’s report stated that the projected decline in youth unemployment in the developed economies is not expected to be enough to pull the global rate downwards as the global youth unemployment rate will reach 12.9 per cent by 2017 –– up by 0.2 percentage points from the forecasts for 2012.

Similarly, 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 few years and might even rise further in some parts of these regions, it said, adding that youth unemployment rates are forecast to rise from 9.5 per cent this year to 10.4 per cent in 2017 in East Asia, while little change is projected in Latin America and the Caribbean and in Sub-Saharan Africa.