The labour market situation of young people

1. The labour market situation of young people Alessandra Molz Employment and Skills Development Programme

2. Outline • Youth employment: concepts and problems • Changes in labour markets • Employment and labour market policies • What can the unions do?

3. Youth employment: • concepts and problems

4. 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

5. Concepts: youth some have more difficulties in entering, and staying, in the labour market • 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

6. employed wage-employed self-employed unemployed including the under-employed visible invisible Concepts: labour force, unemployment Labour force those above a specified age, who during a specified brief period, are either working, or available for work and seeking it Youth labour force: Employed and unemployed youth Youth unemployment: Youth not working but available for work and actively seeking it

7. 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

8. Concepts: employment problems Unemployment is not the only employment problem • 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” • unemployment • under-employment • unstable work • precarious employment • free-lance work • temporary work • young entrepreneurs • work in the informal economy • lack of social protection

9. Common problem areas: • 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 • 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

10. 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

11. 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?

12. Changes in labour markets

13. 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

14. 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

15. Youth employment problems in the EU • 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

16. Youth employment problems in the EU

17. Youth unemployment rates in Europe

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

19. 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)

20. Youth employment problems in Central and Eastern Europe

21. Youth employment problems in Central and Eastern Europe

22. Youth employment problems in Central and Eastern Europe Low-quality wage employment in selected SEE countries, 2001 (percentage of overall wage employment)

23. Youth employment problems in Central and Eastern Europe Standard youth employment rates by socio-economic characteristic in SEE, circa 2001 (percentages)

24. Benefits of halving youth unemployment Estimated increase in GDP if youth unemployment is halved

25. Employment and labour market policies

26. supplydemand the labour market production exchange utilisation 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

27. factors affecting labour markets 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 supply • population growth • changes in labour force participation • migration within and between countries • the state of education and training • structural over-supply

28. 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

29. 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

30. Examples of active labour market policies for youth • 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 • 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

31. 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

32. 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

33. 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

34. The Global Employment Agenda A 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

35. The Global Employment Agenda – 10 elements • Promoting trade and investment for productive employment and market access for developing countries • Promoting technological change for higher productivity and job creation and improved standards of living • Promoting sustainable development for sustainable livelihoods • Macroeconomic policy for growth and employment: a call for policy integration • Decent employment through entrepreneurship • Employability and skills • Active labour market policies for employment, security in change, equity and poverty reduction • Social protection as a productive factor • Occupational safety and health: synergies between security and productivity • Productive employment for poverty reduction and development

36. Going beyond the scope of labour market policies

37. what can the unions do?

38. 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

39. 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

40. 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

41. 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

42. New tasks for the unions • 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?

43. Catering to different groups: some ideas 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)

44. 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

45. 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