Global Youth Unemployment: Ticking Time Bomb?

Jan 6, 2014
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Switching gears now. Unemployment for young people is another one of those contentious political issues as well as a burden for people living through it. Overall, the unemployment rate in the U.S. is just over 7 percent, but for younger workers it's much higher. For some young workers or would-be workers in sub-groups like black teens, unemployment is at depression levels. But what you might not know is that youth unemployment is a global concern.

Some 73 million young people were unemployed in 2013, according to the International Labor Organization - young people is defined as age 15 through 24 - and that could have significant consequences both now and in the future. Here to tell us more about this is Martina Gmur. She's senior director at the World Economic Forum. And she's joining us from Geneva, Switzerland. Martina Gmur, thank you so much for speaking with us.

MARTINA GMUR: Thanks for having me.

MARTIN: So I understand that there are two significant issues here and that they're somewhat different. In the developing world, there are just simply not enough jobs. But in more developed economies the issue is that a lot of young people are not able to find jobs that meet the level of skill and education that they already have. Do I have that right?

GMUR: Yeah, that's correct. Yes.

MARTIN: Which is the more significant problem in your view - or just explain the dimensions of the problem in each case?

GMUR: Well, I think both of them are equally problematic. And think of it also when you look in the long-term that structural unemployment is here to stay, and was one of the major issues that was highlighted also by our experts as something to look out for in the next 12 to 18 months. And, as you mentioned, the unemployment rate among the young is very high. It stands currently at 12.6 percent. It's a key issue.

If 1 out of 6 young people are unemployed globally, that's obviously a major issue. And it's also a major issue when you compare it to the older workers because young people are almost three times more likely to be unemployed than older people, which is key. And they're more vulnerable to changing economic conditions. So in South Africa, for example, when the economy slowed down, youth unemployment began to rise sooner than adult unemployment, so that's another aspect which is key. So over the next 15 years or so, to even just maintain the current employment rates in the developing world, we'd need 600 million jobs. That's a big, big number obviously.

MARTIN: Around the world - I know that a number of analysts use this term, ticking time bomb, to describe this phenomenon.

GMUR: Right.

MARTIN: First I wanted to ask you, why do they use that term? And what kinds of conversations are global leaders having about it? I mean, is there kind of a global understanding of the significance of this?

GMUR: Yeah, I think there is. You know, as I've mentioned, we've had our experts highlighting this as a major issue amongst the top issues. It's ranked number three, you know, in the ranks of climate change and other issues. So clearly they see this as a critical, critical issue to address. And the reason why it's, you know, a ticking time bomb is because it's a long-term issue. Some of the implications of this we won't see for the next decade or so, and particularly in countries or regions like Southern Europe where some of the unemployment rates amongst the youth are peaking well over half.

This is going to have major implications over time. And another facet here is also the underemployment, which is particularly striking in the Middle East and North Africa and even in certain parts of South Asia as well, where we see a lot of underemployment of youth, which has a long-term effect on the economy and definitely some negative implications on the growth of these countries and their GDP.

MARTIN: Are there areas in which leaders are taking specific measures to address this? I mean, you said that we need 600 million new...

GMUR: Yeah.

MARTIN: ...Jobs in the near future.

GMUR: Yeah.

MARTIN: It sounds like a huge number. Are there places where leaders are taking specific steps to address this that you could tell us about?

GMUR: Yeah, absolutely. I think there is two aspects to this - to this problem. One is the long-term aspect, as I mentioned, of the structural unemployment, which clearly needs to be addressed. And here I heard your previous speakers talk a little bit about the skills gap - the skills shortage I think - and this is certainly something that is really key. The skills mismatch currently needs to be addressed. And a lot of our companies and CEOs are very concerned with this issue.

And they are starting to rethink not only the labor market institutions, but also the traditional education systems - what does it mean for universities in the future and for apprenticeships in the future? And then there's a few more short-term solutions that people are working on in our circles. One of them is, as I mentioned just now, the apprenticeships. This is a proven approach to tackling youth unemployment. It's worked in countries like Austria and Denmark, who've very successfully been using apprenticeship to tackle this - also Germany. We've also seen a new area for green jobs emerging. You know, there's a huge potential for new jobs in that space as green jobs, as we look towards a more sustainable economy. And then of course entrepreneurship is another aspect that needs to be fostered across youth to help them and design frameworks where they can help build up, you know, entrepreneurial endeavors.

And we've done some work in this in Africa where we started a program called Startup Africa, which helps people, young people, develop entrepreneurial thinking and helping them to think through what it means to set up businesses.

MARTIN: Can I ask you to take a step back for just a minute and say part of the issue here is that there's a mismatch between young people acquiring skills and education at a faster rate than the economy can absorb those skills and education. How did this occur?

GMUR: Well, I think there's obviously always a number of reasons why, but business today faces a major shortage of talent with the appropriate skills. I think in a recent McKinsey report, they estimated that by 2020, developing countries could have 45 million jobs for workers with secondary educations that will go unfilled. So clearly there is a massive, you know, gap in terms of what people are educated in and what the job market's looking for.

And it's potentially also because the educational system maybe hasn't reformed fast enough to really look at what is needed in the current job market and what are the skills that are required. If you look at many of the educational institutions, there hasn't been a really big overhaul in some of their system in a long time. So this is something that really needs a big rethink.

MARTIN: Before we let you go - we have about a minute and a half left - you know, the new year is a time where many people set goals for themselves and also it's a good time to kind of think about the year ahead - is there a way in which you would want our listeners to be thinking about this issue as we go forward?

GMUR: Yeah, I think there is definitely a part of it which I would encourage the listeners to consider what they can do in their own organizations to encourage the shorter-term responses to youth unemployment because, as I've mentioned, the long-term implications are quite tragic and we've seen some of it in some countries already. And they're just a huge burden on the economies and on economic growth. So I would say see through what the organizations can do and sometimes it's quite simple - in just creating mentorship programs apprenticeships for youth to start understanding and building more soft skills and learning skills that they might not have learned in schools and really helping them sort of bridge that gap. And for companies to take on the role that maybe governments have in the past and to take a step forward and be proactive about it.

MARTIN: Martina Gmur is senior director at the World Economic Forum. She was kind enough to join us from Geneva in Switzerland. Martina Gmur, thank you so much for speaking with us. I hope you'll keep us informed about this important issue.

GMUR: Thank you for having me. Thank you. Transcript provided by NPR, Copyright NPR.