Youth Employment and Sustaining Latin America’s Economic Recovery

full panel collage All panelists at the recent IAD, United Way, and GOYN on youth employment

On October 13, 2021, the Inter-American Dialogue, United Way and the Aspen Institute jointly convened a virtual event on “Youth Employment and Sustaining Latin America’s Economic Recovery.”

By some estimates, the Latin American and Caribbean region has lost 26 million jobs because of the Covid-19 pandemic, and new waves of contagion and slow vaccination rates have complicated the employment outlook for this year and likely well into 2022.

With many jobs typically done by young people being in the service and hospitality industries, economic shutdowns and travel restrictions have hit jobs for youth particularly hard. The youth employment rate dropped to just 33 percent in the region last year, according to data from the UN’s ECLAC.

And even before last year’s record-setting recession, youth employment presented a challenge for the region’s policymakers. Informality and inactivity rates affected nearly 110 million young people in Latin America and the Caribbean, according to an ILO report. Of those, 23 million neither studied nor worked, and more than 30 million only held informal employment.

In partnership with United Way and the Aspen Institute, the Inter-American Dialogue invited panelists to discuss ways address the youth employment challenge. 

Michael Shifter, the president of the Inter-American Dialogue, and Luis Javier Castro, a member of the Worldwide Board of Trustees at United Way and the founder and CEO of Mesoamérica Investments, offered welcome remarks.

The event featured speakers Gabriella Bighetti, executive director for Brazil at United Way, Maria Victoria Fazio, labor markets and social security specialist at the Inter-American Development Bank, and Ana Tacite, program manager at Instituto Coca-Cola Brasil. The conversation was moderated by Jamie McAuliffe, founding director of the Global Opportunity Youth Network at The Aspen Institute.

The event also featured a conversation among young people that was led by Bakhtawer Abbasi, program associate at the Aspen Institute Forum for Community Solutions, which included Diego Duque from Colombia, Pâmela Regina Machado de Souza from Brazil, and Carmen Soledad from Mexico.

Key Takeaways: 

  • The pandemic has been like a tsunami for labor markets in the region, one that has perhaps hit the region’s youth the hardest. By July 2020, 31 million jobs had been lost in the region, with people under 34 years old accounting for 60 percent of those losses. Young women account for a higher proportion of those affected. Among people aged 15 to 29, around 20 million young people in Latin America are without jobs and have neither education nor training prospects.
  • Labor regulations need to be updated to tackle informality and create better jobs for workers; education systems need to reevaluate what types of training and skills development are promoted; beyond technical training, young people need better skills for job readiness – including socio-emotional skills, employability training and entrepreneurship; mentors play an important role in the career development of a young person beyond the first job, a key factor for longer-term success in the workforce.
  • The solution to the youth employment challenge involves putting youth at the center of the discussion and engaging stakeholders across society such as employers, schools, governments, civil society, academia and NGOs.
  • Young people in the region want to be perceived as capable, talented and responsible leaders, but there are still many deep-rooted, structural problems facing them such as racism and sexism that are significant barriers to youth entering the workforce and advancing their careers.

Summary: 

The conversation began with an introduction from Shifter and Castro outlining the challenges that young people face in the labor market. In Latin America, 20 million people ages 15-29 are unemployed, without an education or without training. Nevertheless, Castro emphasized that it’s important to see youth as the biggest opportunity of the next decades, suggesting that it will require alliances to achieve collective impact, working with government, the private sector and educators through design thinking that listens to young people and incorporates their views and needs in the discussion.

panel collage
Panelists Jamie McAullife, Victoria Fazio, Ana Tacite and Gabriella Bighetti (clockwise)

McAuliffe framed the first panel by noting that while youth are often defined by their deficits, the Global Opportunity Youth Network (GOYN) takes an asset-based approach to the discussion of youth employment that emphasizes the opportunities and potential that lie with the younger generation.

He added that the current systems in place to shape the youth workforce, such as education systems and work systems, are often fragmented and disconnected from the actual demand for jobs. It is the goal of GOYN to build a network that focuses on place, collaboration, and community, and relies on strategically strengthening pre-existing youth employment assets and programs rather than introducing new models and solutions.

“So often in our world we define young people by their deficits–marginalized youth, vulnerable youth, disconnected youth–and a lot of us feel that that doesn’t emphasize the amazing contributions and opportunity that young people present to their communities, their families, to companies and to the future.”

Jamie McAuliffe

Fazio remarked on the labor market loss due to the pandemic, noting that by July 2020, 31 million jobs had been lost in the region, with young people under 34 accounting for 60 percent of those losses. The Covid-19 crisis revealed the preexisting problems in the region’s labor market, such as informality, high inactivity rates, lower salary trends and less hours worked overall. “What worries me most as a labor market specialist are indicators of increasing mental health issues and isolation, leading to weaker networking needed to find better jobs in the labor market, which can result in negative behavior among youth and long-term scar effects that are hard to overcome in career trajectories,” Fazio said.

According to Fazio, to create opportunities for young people, policymakers need to put transformation and inclusion at the forefront of economic recovery initiatives. The productive sector has to be strengthened and investments should be made in the talent force in Latin America in order to create better opportunities for employability. Fazio also added that labor regulations need to be updated to create better jobs for workers.

The IDB’s approach to creating opportunities specifically for young people calls for a reset in policy making to include young people in the decision-making process, as well as a reevaluation of what types of trainings and skills development should be promoted. Beyond technical skills training, young people need to be equipped with skills for job readiness – including socio-emotional skills, employability training and entrepreneurship training. Lastly, she emphasized the important role that mentors play in the career development of a young person.

“By July 2020, 31 million jobs had been lost in the region, with young people under 34 years old accounting for 60 percent of those losses.”

Maria Victoria Fazio

Tacite remarked on the timeliness of this issue, especially in Brazil, which currently has the largest population of youth in its history. However, the country’s so-called demographic dividend is nearing its end and the society will be transitioning to an older population.

Coca-Cola Brazil is working on three fronts to combat youth unemployment: 1.) to mobilize and inspire young people to look for opportunities; 2.) to have an intentional approach when connecting youth with employment opportunities; 3.) to strengthen inclusive practices in the economic system.

Coca Cola is a part of GOYN and works to collaborate with other organizations with an emphasize on spotlighting youth voices in these discussions. She emphasized inclusivity, mentorship, and including a youth perspective at every level of the employment process. Tacite closed by stating that there is a need to engage in every level in the employability ecosystems, from the recruiting processes to human resources management. For example, some employers require English language skills when advertising for positions that are not necessarily a requirement of fulfilling the job’s tasks, or they may specify advanced university degrees that are not necessarily applicable and may limit the number of diverse candidate applications.

In her remarks, Bighetti emphasized that investing in early childhood and youth wellbeing is critical to economic sustainability and deserves more attention. Moreover, employers need to be educated about the youth employment challenge – but beyond awareness, Bighetti noted that many companies simply do not know how to engage with youth. The solution to the complexity of youth employment will come from more collaboration between governments, civil society, companies, academia, and the youth themselves. It also involves recognizing the historical problems that contribute to the lack of opportunities for young people, such as structural racism and sexism. Moreover, the pandemic has added new challenges, such as hunger and mental health. She concluded that investing in young people is incredibly important because it will contribute to increasing a country’s overall productivity in the long term.

“The solution to the complexity of this issue will come from collaborative work among governments, civil society, companies, academia, and the youth themselves.”

Gabriella Bighetti

In the youth panel, speakers were asked to share their thoughts on the barriers facing youth today and what they would like to see for young people entering the workforce.

Soledad shared that what youth want is the recognition of young people as capable, talented and responsible leaders. She remarked that there are skills required by employers that traditional education systems do not provide and encouraged employers to find ways to help youth develop those skills. Viable paths must be created from internships and apprenticeships to stable, long-term employment, and employers should implement policies and provide flexibility to ease the burden on women entering the workforce. She concluded that all stakeholders in the employability ecosystem should have programs that promote youth participation in the labor market.

speaker collage of youth panel
Speakers Bahktawer Abbasi, Pâmela Regina,  Diego Duque and Carmen Soledad (clockwise)

Regina added to the conversation that there are still many deep-rooted, structural problems facing young people in Brazil. She wishes to see a decrease in inequality and increase in diversity in labor markets. She shared that young black people and young women face the specific challenges wrought by racism and sexism in the workplace. These structural issues are a significant barrier to youth entering the workforce that have been further exacerbated by the Covid-19 pandemic.

Duque emphasized that it is important for youth to be included in these conversations. He added that the pandemic has resulted in both short-term and long-term challenges for youth employment. In the short-term, there is now more competition for jobs, which favors applicants with more previous experience and more education. Long-term challenges that are a result of Covid include the education loss students have faced in the last 18 months, noting that the effects of this will be notable even five or ten years from now.

During the Q&A, audience members asked questions focused on the root causes of labor informality and potential solutions to the problem, as well as the disconnect between training and job availability.

Panelists remarked that the biggest factors driving informality are the design of social security and labor regulations, suggesting social protection systems should be detached from the labor market. Panelists also commented that employability agendas must focus on job placement to ensure jobs are available when the youth labor force is trained and ready to enter the workforce.

Watch the recording of the event here

 

 


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