Promoting Decent Work and Sustainable Development for Youth — Y20 China 2016

By Mr Tim De Meyer, Director, ILO Country Office for China and Mongolia

Statement | Shanghai, China | 28 July 2016
Tim De Meyer at Y20 2016.
Good morning, I am Tim De Meyer, ILO Country Director for China and Mongolia. Let me first of all thank our generous hosts of Y20 China – the ACYF, Fudan University, the China Youth Daily and the Shanghai Youth Federation. Thank you for the hospitality we enjoyed last night. Coming from the ILO, I am going to talk a bit about the youth employment situation, which we are following quite closely.

The theme of the Y20 this year “Youth Innovation for Our Shared Vision” Innovation, of course has been the overarching theme of China’s G20 Presidency, just as it is the leading theme of China’s 13th 5YP. Innovation refers to unprecedented challenges and opportunities, to the need to “step out of the business as usual” and to engage in a transformation that will largely be in the hands of young people. In global terms, this is the first generation that has the chance to eradicate poverty and the last generation that can stop the irreversible effects of climate change. In China, this is the generation that is called upon to make the great productivity leap forward: today, 10 % of China’s population is over 65, but by 2050 that will be 30 % - an increase the size of the population of Indonesia.

Two weeks ago, the G20 labour ministers agreed in Beijing that “productive employment and decent work are the foundation of the livelihoods of people across the world”. Simply put, it is both pointless and impossible to pursue strong, sustainable and inclusive growth if we do not give people the means to productively contribute to and reap fair reward from economic growth – if we do not create opportunities for “decent work”.

The 2030 Development Agenda has set ambitious targets for youth in relation to work. (1) substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship. (2) By 2020, substantially reduce the proportion of youth not in employment, education or training. (3) By 2025, by 2025 end child labour in all its forms. (4) By 2020, develop and operationalize a global strategy for youth employment.

The job difficulties which young people are facing today result in no small measure from the 2008 global financial crisis. For those who have seen the movie “Wall Street – Money Never Sleeps”, you may remember the scene where Michael Douglas addresses the “ninja generation”: “No income, no jobs, no assets – you have a lot to look forward to.”
Decent work for youth is not a luxury but a choice we have to make if we are to rid the world of poverty and inequality and safeguard the peace and security that underpin our human civilization.

Employment growth across the world varies considerably, and so does youth employment growth, driven by a range of demographic and economic trends. In the next 5 years, employment for adults is set to rise 1.38 per cent per annum, whereas youth employment will decrease 0.27 per cent annually. Youth employment will grow much slower than total employment in all regions, particularly in Eastern Asia. These declining trends are largely due to China’s “new normal” of medium/high growth and a stagnant global economy. If global demand wanes further, it will become more difficult for young people to access jobs.

Young people often face a difficult transition from education into work, carrying risks of skills deterioration and discouragement. Evidence from a recent ILO survey shows that roughly one fourth of youth population aged between 15 and 29 years’ old are not in employment, education or training (we call them the “NEET” group). Many of them have been pushed to inactivity by the lack of employment opportunities. Moreover, the NEET rate is higher for women than men. The gender gap results from cultural factors that have influenced educational attainment, access to productive inputs, political representation, household bargaining power and economic recognition of care work, all factors that keep women marginalized from the labour force.

Ratio of youth to adult unemployment remains close to 3 to 1, which means young people are much more likely to be unemployed than adults. In 2016, youth account for 21 per cent of world’s population and more than 15 per cent of the world’s labour force, but over 35 per cent of unemployed population globally.

Particularly in emerging economies, youth unemployment rates are higher, because young people often lack the right qualifications for their job. The skill mismatch caused by underdeveloped or undervalued vocational education becomes a major obstacle for youth to get employed.

Between 1991 and 2015, the LFPR for adults has remained constant, but that for young men has declined by 13.3 % and for young women by 16.6 %. The tendency for more youth to engage in secondary and tertiary education is a main determinant of the declining youth LFPRs. Between 2000 and 2014, the share of people enrolled in upper-secondary education increased by nearly 20 % - on average. The other reasons for inactivity include engagement in household duties and discouragement with the prospects of finding work.

Gender gaps in the labour market for both adults and youth are not only detrimental at an individual level, but also distortion to growth and obstacles to reducing inequality and poverty.

More than one third of youth live in extreme or moderate poverty despite having a job. Poor quality jobs are often informal in nature. In Argentina, Brazil, South Africa and Turkey informal workers account for some 40 per cent of employed youth, but 20 per cent of working adults.

Poor quality jobs come with low pay, very long, unsafe and unhealthy working conditions and limited access to social security or health services. Young people not having a job may be a concern for social stability, but young people having a poor quality job is a concern for inequality and long-term economic growth.

Youth are consistently exhibiting a higher working poverty rate than their adult counterparts. In 2016, an estimated 16.8 per cent of employed youth in emerging and developing countries were living below the extreme poverty threshold (i.e. living on less than US$1.90 per capita per day) – this compares to around 10.6 per cent of employed adults.

High working poverty rates among youth in developed countries largely reflects their higher probability of involuntarily being in temporary or part-time employment relationships. These forms of employment are often associated with wage penalties, limited access to training, slow career advancement and lower social protection. This undermines youth prospects in the labour market and their income potential. In developed countries in 2014, an average of one youth out of four was in temporary employment against 9 per cent of adults. In the same year, 28.1 per cent of young workers had a part-time employment contract against 15.9 per cent of adult workers.

Young people often leave school and enter the workforce with qualifications that do not match the needs of employers. This misalignment hinders personal competitiveness and fails to maximize the potential of young people. With a large underqualified workforce, developing economies are exposed to weaker productivity growth and a slower structural transition to higher value added activities.

Labour market policies are needed to ease school-to-work transition. Qualification mismatches could be reduced by greater access to quality technical and vocational education and training.

Social unrest can occur for a range of reasons, including inequality and political polarization. However, socio-economic factors, particularly youth unemployment and adverse macroeconomic conditions, are important determinants. Countries experiencing heightened unrest largely attribute this to the poor labour market situation of young people.

Policy developments and recommendations

Job-rich growth for youth employment: Macroeconomic and structural policies play an essential role to generate job opportunities. Critical here is coordinating fiscal, economic and social protection policies and place decent work at the heart of national development strategies.

Employability for work and productivity: Solving the skill mismatch requires better governance in the education and training sector and greater partnership among government, industry, education and training providers. Innovative programmes to make technical and vocation education and training more attractive to young people as a pathway to productive employment are also important. Developing countries with very low enrolment rates in TVET need to invest more in this form of education to prepare their youth labour force for participation in industrial development and technological upgrading.

Labour market policies to ease school-to-work transition: Labour market policies help match labour supply with labour demand and thereby easing the transition of young people to work – but only when vacancies exist. For young people, labour market information and job-search assistance are the most effective support to searching jobs. Quality apprenticeships are another means of easing young persons into the labour market, while addressing the skills mismatch.

Conducive environment for youth entrepreneurship: G20 members agreed that entrepreneurship is an important driver of innovation, job creation and growth in both high income and emerging economies and has the potential to strengthen a job-rich recovery. Policy measures should be developed to support entrepreneurs in their preparatory and preliminary stages of entrepreneurial activities, and assist self-employed people to cope with challenges of running a business and sustain their employment (e.g. KAB). On the other hand, governments can also support entrepreneurs to fulfil their obligations as employers and make efforts to formalize businesses; and provide appropriate social protection for entrepreneurs and bring their workers also into the social security system.

Involving youth in social dialogues: The representation and voice of young working women and men remain limited in many countries where legal framework restricts freedom of association and meaningful collective bargaining. G20 members are committed to ensuring full respect for the fundamental principles and rights at work and recognize the important role of social dialogue as a key component of decent work.

Protecting and promoting the rights of young people: Governments need to ensure compliance with labour standards on wages, working hours, working conditions and occupational safety and health. It is recognized that the efforts on compliance can form a key element of strategies to foster more innovative and productive workplaces.

In addition, measures need to include the protection of young domestic workers, young migrant workers and other vulnerable young workers from potential abuses and discrimination.

In conclusion, the Y20 as an engagement group has a duty to remind G20 Leaders that strong, sustainable and inclusive growth will be delivered by the young people of today. The Leaders can help by heeding a call for decent jobs for young people. Decent jobs can be in the factories, the hospitals or even the homes of tomorrow or they can flow from the dreams of young entrepreneurs. But decent jobs will need every support, encouragement and protection they can get from Leaders.