How Policymakers Can Boost Youth Employment
The International Labor Organization (ILO) estimates that nearly 75 million young people are unemployed in the world today. This number has increased by more than 4 million since the financial crisis of 2008-9, and the outlook for the medium term is worsening. The global youth unemployment rate is 12.7 percent in 2012, and the ILO projects that it is likely to rise to 12.9 percent by 2017.2
The sheer magnitude of the youth employment challenge has been gradually penetrating people’s awareness over the last decade, and raising the profile of the issue for governments and policymakers. Increasingly there is a realization that the level of youth unemployment is not simply a mirror of the business cycle, but a persistent structural issue that has distinct causes and requires distinct solutions that cut across fiscal, labor, social security, and education policies.
The sources of structural change in the economy are well known: they are driven by advances in technology and communication, the globalization of production, inexpensive and easy access to information, and changes in the organization of work. What may be less well understood is the way these changes have transformed the sources of economic value – for enterprises and for individuals – in a fundamental way.
The new talent-based economy presents tremendous opportunities for personal, enterprise, and national growth and development. But its more intensive and rapidly evolving skills requirements have raised the bar for new workers. Traditional school-to-work channels, skills training models, and career paths that build on access to entry-level work, no longer function as well as they used to in channeling young people toward sustainable careers. And the very efficiency of the new economy means that it is not guaranteed to create enough jobs for all the young people who want to work.
The danger is that without aggressive, pro-active job creation and youth employment strategies ¡V the kind we haven¡¦t seen in the past -- we are looking at job scarcity, social tensions, and a lost generation of young people in both the developed and developing world.
ManpowerGroup is deeply concerned about the consequences of youth unemployment. The issue intersects our own business operations at three levels: in our efforts to provide recruitment solutions for our employer clients, to find jobs for our applicants, and to build employability and address skills shortages through workforce development initiatives. We believe that new and more aggressive strategies, supported by states but implemented through multi-stakeholder partnerships, are required to empower more young people to succeed in the new economy. Positive interventions should focus on several key areas:
- Jobs: ensuring that enough good jobs exist for young people who seek them;
- Skills: teaching young people how to identify opportunities, align their interests with market needs, and acquire relevant skills that will let them succeed in sustainable careers;
- Experience: overcoming practical barriers to initial workforce entry by young people; and
- Impact: identifying interventions that work, and scaling them up so that their impact matches the magnitude of the challenge, while their cost matches available funding.
Earlier this year, ManpowerGroup issued a paper on what businesses can do to help improve the employment outlook for young people.4 We urged employers to “lean forward,” to make more effort to tap the unique energy and perspective of young people, and to help create the skilled workforce that they will depend upon in the future. We encouraged businesses to partner more closely with educators and trainers to build “real world” experience into academic and vocational programs, and to take direct initiatives to hire, train, and mentor young people.
But businesses cannot do the job alone. In this paper, we want to address the broader enabling environment -- policies and programs, financial and civil society resources – that will help improve the employment outlook for young people and enable more effective assistance to youth who are struggling. We want to address key actors, especially policymakers and educators, who can take a broad view of the youth employability challenge and exercise leadership in bringing successful approaches to scale.
We have based this paper not only on our direct business experience, but also on research and interviews engaging a wide range of experts in youth development, from the public, private, academic, NGO, and international organization sectors; we identify them individually in our Acknowledgements. We want to thank them for sharing their time and expertise in discussing a tremendous range of ideas, challenges, and innovative solutions.