Latin America Advisor

A Daily Publication of The Dialogue

How Has Youth Unemployment Affected Latin America?

Q: Unemployment in the OECD countries averaged 18.9 percent last year, The Wall Street Journal reported Aug. 10, and youth are three times more likely to be unemployed than older workers in Latin America and the Caribbean, according to the International Labor Association. Meanwhile, protests calling for education reform in Chile have erupted in violence and clashes with the police in scenes that mirrored youth-driven turmoil in Britain. Is there a direct correlation between youth unemployment and the social unrest? What accounts for such high levels of youth unemployment and what effect has it had on the region? What measures, if any, should be taken to promote youth employment? A: Jonas Prising, president for the Americas at ManpowerGroup: "Youth unemployment is a pressing issue globally, and particularly in Latin America, where 15 to 30 percent of young people are unemployed, two to three times the rate of adult unemployment in the region. With this significant employment disparity, youth are losing hope of finding jobs, and many have stopped searching for work altogether. Without action, we risk creating a 'lost generation,' where lifetime income and participation in society is significantly diminished. The current scenario robs young people of the chance to acquire the skills needed in the rapidly changing workforce and results in an even greater reliance on society or family in the long term. The divide between those that have opportunities to participate in the workforce and those that do not is growing, and this social bifurcation is greatest among the youngest job seekers. It impacts our economies and our societies. With the rapid transfer of information that technology allows, they see how others live and the opportunities afforded to them, and this increasing gap creates disillusionment and tension. The recent waves of unrest in areas of the world may be in part a strong reaction from a generation that has little hope and sees no way to change their fate. We can create opportunities for youth by incentivizing entrepreneurship within the public and private sectors, along with providing the required tools and training to ensure they acquire the skills they need to make themselves more appealing to employers. We have seen examples of initiatives that have shown promise, but the scale of the issue will require a dedicated and focused effort to succeed." A: Mark Lopes, deputy assistant administrator in the Bureau for Latin America and the Caribbean at the U.S. Agency for International Development: "When you ask someone in a poor community in Latin America or the Caribbean why young people get off track, you typically hear, 'Kids join gangs and cause trouble because there are no jobs and no better options.' On the surface, they are exactly right. While the causes of unemployment and crime are varied and complex, the core challenge of 'give me a better option' still exists. President Obama recognized this in his March speech in Santiago, Chile when he said, '...we'll never break the grip of the cartels and the gangs unless we also address the social and economic forces that fuel criminality. We need to reach at-risk youth before they turn to drugs and crime.' USAID is emphasizing programs that address the root social and economic causes of crime. But, instead of a floodlight approach to prevention, we are moving toward a spotlight approach, where experience tells us that programs that are targeted, practical and have the right follow-through have the best chance of having a long-term impact. For example, our workforce development programs in Central America are designed to teach 'job-ready' skills in demand now by the private sector-and then we work with local businesses to place young people in market-based jobs. Job creation is a big a deal both at home and abroad, and USAID has found that a few resources can go a long way to help create jobs, as well as stability-both of which are in the interests of everyone in the hemisphere." A: William S. Reese, president and CEO of the International Youth Foundation: "Whether they take place in London, Cairo or Santiago, youth-led protests and even violence can be explained, in large part, by looking at the local unemployment and underemployment rates among these countries' young people. Global youth unemployment is rising across the globe-with young people three times more likely than adults to be unemployed. Without jobs, youth are increasingly marginalized and frustrated, and have little stake in the future. Latin America is no different. More than 100 million young people across the region are neither working nor in school. While the underlying reasons vary, they often point to inadequate preparation for youth to enter the local job market. In the Americas, up to half the students finishing secondary school reportedly lack the essential work readiness skills for decent 21st century jobs. Much progress, however, is being made in the region to address these challenges. One program, supported by the Multilateral Investment Fund and USAID, has provided training to over 70,000 at risk youth and placed 55 percent of them in decent jobs, with another 25 percent returning to school. Through its work in Latin America and the Caribbean over the past decade, the International Youth Federation has developed a number of successful strategies to expand economic opportunities among disadvantaged youth. These include: building multi-sector partnerships committed to improving youth job prospects; supporting market-driven approaches to job training; preparing youth with a range of competencies, including life skills; investing in job creation through youth entrepreneurship; taking successful programs to scale; and promoting and disseminating best practices in workforce development." A: Hans-Joachim Voth, research professor of economics at the Universitat Pompeu Fabra in Barcelona: "Economists' research over the last 20 years has shown that there are three major ingredients for unrest-ethnic heterogeneity, unemployment and budget cuts. Given the massive immigration into Europe in the last decade (much of it illegal), the high rates of youth unemployment and the scale of budget cuts necessary for a sustainable debt position, it is at least possible that unrest will escalate in the future. There is a good chance of a vicious cycle, with social instability and more uncertainty about the political environment leading to lower investment, less growth and yet more unemployment. The right policy mix to deal with this danger involves, first, reducing immigration to very low levels, second, the pursuit of careful expenditure policies in good times, and third, more emphasis on tax increases rather than expenditure cuts."

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