ILO states global youth jobs crisis isn't improving

The International Labour Organization recently released its annual Global Employment Trends report, it's a great snapshot of the state of labour markets around the globe. There are a lot of references to the plight of unemployed young people and the findings are profoundly disturbing. The report is quite blunt, stating that "A continuation of current trends risks further undermining the already dim prospects and aspirations of the world's youth, sowing the seeds for continued social unrest and further weakening global economic prospects."

This post is going to cover off the main points in Chapter 2 and Chapter 3 (which contains a regional labour market synopsis) of ILO report about the situation relating to the global youth labour market. Then we'll examine Chapter 4 which contains the public policy responses that the ILO suggests to address the continuing global jobs crisis.

There's not much by way of a silver lining in the report. 75 million young people remain out of work globally, which translates into an unemployment rate of 12.7% (a jump from 11.7% in 2007). The hardest hit regions for youth unemployment are in developing and emerging economies. That being said, in the wake of the recession the largest declines in youth employment occurred in the advanced industrialized economics with the unemployment rate jumping from 12.5% to 17.9% over this period; particularly, youth in the European Union were perhaps hardest hit. Another troubling indicator is that youth now comprise 23.5% of the world's working poor with many young people who are working get by on part-time positions and temporary contracts (this would seem to confirm Guy Standing's thesis about the development of a global precariat class).

With recent events such as Occupy Wall Street, the Arab Spring and the British riots it's unsurprising the ILO suggests that the continuing deterioration of the youth labour market will drive distrust of the current political and economic order - which is code for social stability. Beyond these concerns there is an underlying theme in the report that suggests that high youth unemployment is extremely damaging to long-term prospects for labour market and economic growth; furthermore, there also the issue of economic scarring arising from long-term unemployment that can have corrosive effects of the span of a life-course.

The ILO lays out a number of public policy responses that could be deployed to address the jobs crisis in the final chapter of the report. Overall the ILO supports continuing stimulus spending to bolster job creation as there has been a poor economic recovery in advanced industrialized economies that can be partially traced back to initial stimulus measures in the immediate wake of the 2008 crash that targeted the financial sector rather than the real economy.

The ILO suggest four main policy responses: global policy coordination to use monetary policy responses in a coordinated fashion to prevent further deterioration of global economic conditions; repair and regulation of the financial system, the ILO argues that reforms increasing safety margins in domestic and stricter rules on the flow of global capital are necessary; additional stimulus that targets the real economy is needed to address faltering employment creation and the ensuing weak income growth; and, finally the report warns about the dangers from austerity measures in the face of looming demographic pressures posed by an aging population.

That's all. For some additional context about the situation facing young people in Canada, take a look at my recent post about the youth labour market prospects in Canada for 2012 or my recent interview with Tom Zizys about Ontario's labour market. Below I've posted a video where Ekkehard Ernst, Chief of the ILO's Employment Trends Unit, discusses the implications arising from the report, see: