The labour market situation of young people

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The labour market situation of The labour market situation of young peopleyoung people

Alessandra MolzAlessandra MolzEmployment and Skills Employment and Skills Development ProgrammeDevelopment Programme

The labour market situation of young people

Outline

• Youth employment: concepts and problems

• Changes in labour markets• Employment and labour market

policies• What can the unions do?

Youth employment:concepts and problems

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Concepts: youth

• youth– standard UN definition: 15-24 years old

• 15-19 = teenagers• 20-24 = young adults

– several countries use other age limits – youth, as a group, differ in many ways from

labour force participants in other age groups

– at the same time they are, within their group, as diverse as the overall population

– certain (dis)advantages exist in being young– some young people are worse off than others

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Concepts: youth

• disadvantaged youth– family background (socio-economic)– gender– location (e.g. urban vs. rural)– ethnic background, caste, religion– disability, health problems– language, literacy– Inadequate or lack of skills

some have more difficulties in entering, and staying, in the labour market

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Concepts: labour force, unemployment

employed• wage-employed• self-employed

unemployed

– including the– under-employed

• visible• invisible

Youth unemployment: Youth not working but

available for work and actively seeking it

Youth labour force:Employed and unemployed

youth

Labour forcethose above a specified age, who during a specified brief period, are either working, or available for work and seeking it

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Youth unemployment

youth being particularly affected• many school leavers among job seekers • time it takes to find a job• waiting for a better opportunity• first-time insertion hurdles: employability, lack of

work experience, lack of orientation, counselling and advise

• strict employment protection regulation favouring those already in employment

• employer preference for older workers • “last in first out”not all youth are affected by employment problems but, on the whole, youth appear to be more affected

than people in other age groups

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Concepts: employment problemsUnemployment is not the only employment problem

– unemployment– under-employment– unstable work– precarious

employment– free-lance work– temporary work – young entrepreneurs– work in the informal

economy– lack of social

protection

− low earnings, poverty

− hazardous work− low levels of

productivity− forced labour?− child labour?− denial of rights at

work− lack of “voice”,

representation− “Internship

/application generation”

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Common problem areas:

• Lack of jobs– weak overall demand for

labour– economic downturn,

financial crisis– structural and/or

technological changes– Jobless growth

• Low quality of jobs– low pay– Underemployment, low

skilled sector jobs– long hours / few hours– little job security:

temporary contract, no rights, no social protection

– Voice / representation

• Inadequate quality of labour supply– low levels / quality of

education and training– skills mismatch– lack of employability

• Ineffective (labour market) institutions– legislation, regulation– labour market

information– training, retraining– employment services– representative

organisations– social dialogue– investment climate

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Concepts: quality of work

Decent Work“the primary goal of the ILO today is to promote opportunities for women and men to obtain decent and productive work, in conditions of freedom, equity, security and human dignity”

• 4 strategic objectives:–Respect of labour standards and rights–Freely chosen, productive employment for women and men in conditions of equality–Social protection–Social dialogue

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Concepts: decent work

– full employment– stable employment– productive employment– rewarding employment– freely chosen employment– respect for rights at work– safe work– social security– voice, representation– social dialogue

In your country, do all young workers have access to these aspects of decent work?

Changes in labour markets

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Factors of change

• Globalisation of trade and production• Transition of economic models• Technological change• Organisational change• Family structures• Social values• Knowledge based economy

All these trends lead to continuous structural changes in national economies and affect both labour supply and labour demand. This, in turn, requires specific policy responses in a variety of

areas

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Changing labour markets

• Jobless growth• Sub contracting, outsourcing, offshore production or

services• Increasing instability of labour contracts: likely to

change employer (and type of job) 4-6 times in one’s professional life

• Increasing and more different types of self-employment• Flexibility in contract, working time, place (atypical

working arrangements)• Increasing instability of families, individualisation

processes• Changes in social protection schemes• Increasing precarious work• Demand for higher skills and employable skills• Increasingly new jobs in the service sector, esp. ICT• Informal economy

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- Youth unemployment remains at the same levels, twice as high as adult unemployment

- EU 15: Youth unemployment declined, new member states: increased

- Wage competition from low wage countries- Multinational companies (mergers) and massive lay-

offs- Jobless growth in the industry sector- Job growth in the service sector (labour intensive)- Youth UE erodes social protection- Flexible working arrangements on the rise- Increasing and new forms of self-employment- Semi-dependent workers (econ. dependent self-

employed)- Increasing temporary employment- Informal economy - Young migrant workers

Youth employment problems in the EU

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Youth employment problems in the EU

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Youth unemployment rates in Europe

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• Lack of data!• Disparities across the region• Unemployment in general is very high• Youth unemployment rate in SEE is 2,5 times higher

than in EU countries • Three to four times higher than adult employment

rate (relative disadvantage)• Higher among teenagers than among young adults• A great majority has no work experience at all• Differences in gender, educational levels, urban and

rural areas• Disadvantages for ethnic minorities and youth with

disabilities and youth from poor households• Skills mismatches• Enterprise restructuring: job destruction and

generation of few formal jobs• Employers: reluctance to hire first-time job seekers

Youth employment problems in the Balkans/South East Europe (SEE)

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Youth employment problems in the Balkans/South East Europe (SEE)

• Discouraged and idle youth (not studying, nor looking for a job)

• Large pools of jobless youth working in unprotected environments

• Low quality jobs: no protection by the labour code (no contract), no social protection, working in the “grey” economy

• Tendency to stay longer in education and delay job search

• Tendency towards emigration (EU), brain drain (low quality job in host countries, subject to human trafficking and exploitation)

• Informal sector, “working poor”• Higher youth labour market participation in service

sectors• Little self-employment among youth (barriers)

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Youth employment problems in Central and Eastern Europe

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Labour force surveys

B&H

BUL

CRO KOS ROM

SER

Unemployment rate (%)

---- 19,4

15,3 41,2 6,4 ----

Youth unemployment rate (%)

---- 38,4

41,1 69,2 18,4 ----

Ration of youth to adult unemployment rates

---- 2,2 3,6 2,1 3,9 ----

Youth labour force participation rate (%)

---- 32,9

39,6 24,7 59,5 ----

Share of youth in total unemployment (%)

---- 21,3

---- 40,6 36,5 ----

Share of youth unemployed with no work experience (%)

---- 74,0

---- 92,1 75,3 ----

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B&H BUL ROM SER

Youths (15-24)

No contract or no social contributions

---- 43,9 ---- 18,4

No contact ---- 17,8 2,8 13,9

No social contributions 51,2 41,1 ---- 10,8

Adults (25 +)

No contract or no social contributions

---- 22,5 ---- 7,9

No contract ---- 7,9 1,0 4,3

No social contributions 31,9 21,0 ---- 4,9

Low-quality wage employment in selected SEE countries, 2001 (percentage of overall wage employment)

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Labour force surveys

B&H

CRO KOS ROM SER

All ---- 41,1 69,2

18,4 ----

Male ---- 37,9 63,7

19,7 ----

Female ---- 45,0 78,8

16,6 ----

Higher education ---- ---- 39,8

22,1 ----

Second. education ---- ---- 62,8

18,1 ----

Primary or less ---- ---- 78,2

17,0 ----

Urban ---- ---- 55,0

28,0 ----

Rural ---- ---- 75,5

20,0 ----

Standard youth employment rates by socio-economic characteristic in SEE, circa 2001 (percentages)

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Benefits of halving youth unemployment

GDP in 2003

Estimated additional GDP (low estimate, billions)

Estimated additional GDP (upper estimate, billions

% increase in GDP (lower estimate)

% increase in GDP (upper estimate)

World

Industr. Econ.Transition econ.

49.870

26.656

3.111

2.173

1.136

205

3.477

1.818

329

4,4

4,3

6,6

7,0

6,8

10,6

Estimated increase in GDP if youth unemployment is halved

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Employment and labour market policies

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the labour market

production exchange utilisation

supply demand

a virtual space where the services of labour resources are exchanged, or, perhaps more

precisely, where, once agreement is reached on conditions, the promise of labour potential is made

and accepted

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factors affecting labour marketssupply• population

growth• changes in

labour force participation

• migration within and between countries

• the state of education and training

• structural over-supply

demand• economic/

financial crises

• changes in economic structure

• Technologi-cal change (ICT!)

• globalisation

affecting both

• failing institutions– e.g.

employment services

– lack of labour market information

• political instability, conflict

• natural disasters

• health crises

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Factors affecting youth employment

• demographics, migration • level of aggregate demand• employment-intensity of growth• economic performance, productivity• efficient and effective training and

education systems• enabling environments• policy space for pro-youth

employment policies at the national level

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Labour market policies

• Active labour market policies• Passive labour market policies• Labour market policies focus on the

imperfections and malfunctions on the labour market

• Measures meant to ensure an optimal allocation of labour resources, notably by preventing or correcting labour market failures, i.e. unwanted distortions or rigidities in the process of labour supply meeting demand

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Examples of active labour market policies for youth

• Labour market services - Public and private employment services:– Skills matching and

providing LMI– Career counseling– Advise and training for

actively seeking employment

• Training:– Increase employability– On-the-job / internships

(gaining job experiences)

– Better school-to-work transitions: focus on young people before they enter unemployment

– Education related first time job experiences

– Identify training needs

• Employment incentives– Reducing taxes,

subsidising social security costs, lump-sums

• Special measures for disabled

• Direct job creation– Jobs that benefit then

community and help acquire work experience and gain employability (subsidised employment and public works)

• Start-up incentives– Finance, advise,

counseling, management training, coaching, mentoring

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Lessons learned

• There are “one size fits all” solutions• Solutions to employment problems should

be linked to their root causes and be target-group specific

• No “stand-alone” measures, isolated measures have low impact

• Combinations / “packages” of target-group specific measures have the highest impact

• New types of work organisation - new challenges for active labour market policies

• Ex-ante interventions are better (and cheaper) than remedial action

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Employment policies

• according to the ILO (C122):

all measures aimed, directly or indirectly, at promoting full, productive and freely chosen employment for women and men

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Employment policies

• such as policies which contribute to:– sustainable economic growth– an equitable distribution of income– employment-intensive investment– knowledge and skills as needed– equal opportunities for all– a healthier labour force– greater employability and adaptability– enhanced entrepreneurship– the better functioning of labour markets

• e.g. the European Employment Strategy

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The Global Employment AgendaA paradigm for action:• Decent work is a productive factor • Pro-employment macroecnomic frameworks • Entrepreneurship and private investment to

boost aggregate demand• Improve productivity and opportunities of

the working poor • Ending discrimination in the labour market• Environmentally and socially sustainable

growth• Employability and adaptability Social dialogue to identify sectors that have

strong employment potential for the young Employment at the heart of social and

economic policies

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The Global Employment Agenda – 10 elements1. Promoting trade and investment for productive

employment and market access for developing countries

2. Promoting technological change for higher productivity and job creation and improved standards of living

3. Promoting sustainable development for sustainable livelihoods

4. Macroeconomic policy for growth and employment: a call for policy integration

5. Decent employment through entrepreneurship6. Employability and skills7. Active labour market policies for employment,

security in change, equity and poverty reduction8. Social protection as a productive factor9. Occupational safety and health: synergies between

security and productivity10. Productive employment for poverty reduction and

development

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Going beyond the scope of labour market policies

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what can the unions do?

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Institutions do matter

• Regulations, agreements, sets of rules and mechanisms or legal entity with physical structure and defined functions and mandate

• Governmental, non-governmental, multi-actor

• Collective agreement: collective bargaining, social dialogue

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Institutions to matter

• Institutions are a stabilising force in the face of continuous structural change

• They play an important role in creating the conditions in which private firms operate and can develop (esp. labour market institutions)

• They are important to help prevent massive social disruptions

• They help establishing long term policies (longer than legislative periods)

• They shape the behaviour of firms and workers and help to make labour markets function better

• Constant changes on the labour market require constant adaptation by institutions

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What can trade unions do?

• We are dealing with new and very different types of “workers”

• Many of them are not “employed” in the classic sense

• All of them want and need social protection

• All of them want and need some form of organisation to help them to represent their demands, attend their needs and defend their rights

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New “types” of workers

• Short term, precarious contracts/ temporary workers

• Part time workers• Teleworkers• Self-employed / free-lance workers• Semi-dependent workers• Un-protected workers• Unemployed “workers” /potential workers• Workers with educational / training needs in order

to retain a job• Male/ female workers• Workers with family responsibilities• Migrant workers• “Clandestine workers”• Workers in the informal economy• Small enterprise workers

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• Catering to new types of employment and new target groups: who’s in and who’s out?

• Study the employment situation of youth in your countries: what forms do exist? What problems do they have?

• What can unionisation offer them in terms of real benefits?

• Who are you catering to at the moment? Who is represented, who not? What are you offering to the different groups?

New tasks for the unions

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Identify the different situation and needs• Study the labour market situation of young

people in your countries, be aware of differences due to gender, educational and training levels, social status, technology changes “invisible” groups

• Be aware and adapt to the changes on the labour market

• Formulate your own proposals for employment and labour market policies, seek dialogue

• Focus on newly emerging sectors (ICT, service sector, non-manual high skills sector)

• Not only job creation, but also improving working conditions (quality of employment)

Catering to different groups: some ideas

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Catering to different groups: some ideas

• Organise new typologies of workers by seeking genuine representation and providing services

• Training providers: increase employability, provide technical training, life-long learning, active participation in reforming training systems

• Services for the self-employed, semi-dependent, part time workers, unemployed, precarious workers- Training- “Business development services” for micro-entrepreneurs

(technical assistance, managerial assistance, advise, formalisation of informal workers and enterprises)

- Legal counselling- Career counselling and advise for (first-time) job seekers- Advocacy- Policies to include them into social protection schemes

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Further reading

• “Global Employment Trends for Youth”, ILO Geneva, 2006

• “Employment in Europe 2006” European Commission, Luxemburg, 2006

• “Understanding youth labour market disadvantage: evidence from south-east Europe”, Alexandre Kolev, Catherine Saget, International Labour Review, Vol. 144 (2005), No. 2, ILO Geneva, 2005,

• “Tendencies of self-employment and semi-dependent work in the European Union”, UPTA – UGT- SPAIN, Madrid, 2006

• “Changing labour markets in Europe. The role of institutions and policies”, Peter Auer, ILO Geneva, 2001

• http://europa.eu/scadplus/leg/en/s02302.htm

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The labour market situation of young people

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