ILO REPORT | Youth unemployment is on the rise. Here are the skills they should have to survive

November 23, 2017 - 8:36 PM
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A worker at a semiconductor plant in Laguna. File photo by Bernard Testa, Interaksyon

MANILA – Unemployment among Filipino youth is expected to rise, even as they are forced to grapple with how new technology affects the kinds of jobs that will be available in the future. They will need skills such as problem-solving, critical thinking, and creativity.

This is according to a new report by the International Labour Organization (ILO), titled “Global Employment Trends for Youth 2017: Paths to a better working future”.

The youth unemployment rate for Southeast Asia and the Pacific is seen to rise from 11.7 percent in 2016 to 12 percent in 2017, and to 12.2 percent in 2018.

ILO warned that “new automation and digital technologies pose further challenges, though their impact will be uneven across countries, sectors, younger, and older workers.”

What has been dubbed the Fourth Industrial Revolution “will affect different people in different ways.” Developing countries continue to rely on low-skilled and low-waged workers, but in developed countries, “robots and automation technologies for manufacturing and services are… (more) concentrated.”

But, ILO reminded, “as technologies evolve, costs will likely decrease and diffusion increase, reducing the comparative advantage of low-cost labor.” This has implications for young workers entering the labor market.

What are the sectors where young workers are likely to find opportunities?

Based on trends from the last decade, the report observed the following prominent growth sectors for young workers:

– financial services;
– trade, hotels, and restaurants;
– transport and storage, information and communications; and
– health services, including care work and social work activities.

But, stressed ILO, “future job prospects… will depend on how technological change evolves in these sectors.”

“It is easiest to automate manual and cognitive tasks that consist of routine and repetitive steps. Machines are, however, still less able to perform non-routine, non-repetitive, more complex cognitive and social tasks that require skills such as problem-solving, critical thinking, and creativity,” ILO stressed.

Particularly for the Philippines, being one of the top destinations for business-process outsourcing, ILO noted, “BPO providers continue to grow through movement towards higher-value, more specialized, knowledge-based services. Future development will hinge on continued capacity building in specialized skills in, for example, engineering, finance, and health.”

Quality of jobs

The report also noted that the youth are three times as likely as adults to be unemployed. When they do find work, its quality remains a concern.

“In emerging and developing countries, 16.7 percent of young workers live on income below the extreme poverty threshold of USD1.90 a day [a little less than P100], partly because they often start their working lives in the informal economy,” ILO said.

“Three out of four employed young women and men are in informal employment, compared to three in five for adults. In developing countries, this ratio is as high as 19 out of 20 for young women and men,” it added.

Meanwhile, about 22 percent of youth are neither in employment nor in education or training. Most of them are female.

In emerging and developing countries, many young men and even more young women are “inactive” and don’t participate in the labor force or in education. This is different from the case in developed countries, where around half of the youth who are neither in employment nor in education or training are unemployed, but available and looking for employment.

On a global level, and as expected, it is faster for tertiary graduates to start their careers (8.5 months) as compared to primary school graduates (22.2 months) and secondary graduates (14.3 months).

Many young people also work while studying. From 2012 to 2016, a quarter of those still in school were working or had worked at some point. They make the transition to work faster, compared to their peers who focused only on their studies.

Nevertheless, “young workers who grew up as ‘digital natives’ should be well-placed to adapt to new jobs and continuous change,” ILO said.

Less secure forms of work

In a “new world of work,” the report said, there are jobs that did not exist in the past.

“On average, young workers are now better educated than previous generations. In addition, having grown up in an environment that is more open to technology, they are better placed than adults to reap opportunities arising from the current wave of technological change, and can more easily adapt to new jobs and digital disruptions. Young workers have more advantages in computer use than older workers, and… data suggests young workers are better equipped to solve problems in technology-rich environments than older workers,” ILO said.

It also observed that while previous generations of workers may have looked for jobs “for life”, young people today are “starting their working lives with short-term work arrangements.”

But this signals “a clear move towards less secure forms of work.”

“In low and lower middle-income countries, this growth of young employees has led to more casual wage employment, while in upper middle-income countries there has been growth in temporary, casual and gig work,” ILO said.

It added, “In high-income countries, one in three young workers does not have an employment contract. In upper middle-income countries, it is one in two, and in low and lower middle-income countries, three out of four young workers have no contract.”

Nevertheless, young workers may experience better work-life balance compared to their older counterparts.

“In high-income countries, a rapidly increasing proportion of the labor force is in internet-related employment… In many developing and emerging countries, this trend is being encouraged because of its potential to provide job opportunities for young people,” ILO said.

But some of these new jobs come with “lower wages, fewer opportunities for training, and limited access to social protection and other work-related benefits.”

In a press release, ILO added that the youth employment challenge is not just about job creation, but also about the quality of work and decent jobs for youth.

“Addressing these persistent labor market and social challenges faced by young women and men is crucial, not only for achieving sustainable and inclusive growth but also for the future of work and societal cohesion,” said ILO Deputy Director-General for Policy Deborah Greenfield.