Large youth unemployment rates of the last two decades in Latin America require urgent disruptions

11, February

By Martin Padulla for staffingamericalatina   Youth unemployment in Latin America has reached the highest ...

By Martin Padulla for staffingamericalatina

 

Youth unemployment in Latin America has reached the highest percentage of the last two decades. This information was taken from a report recently presented by the International Labor Organization (ILO) in Lima, Peru.

The unemployment rate in the young population reaches almost 20% and largely explains a climate of convulsion, discouragement and frustration in the streets of several cities in the region.

Youth employment has contracted in 11 countries (Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, El Salvador, Mexico, Paraguay, Peru and Uruguay) that represent 90% of the workforce in the region.

Also, 6 out of 10 youth jobs are informal. And many organizations do not find the talent they need. For years I have described this situation as a “perfect storm.”

Juan Hunt, Interim Regional Director of the ILO, in this new report stated that “opportunities for access to decent and productive employment, with fair wages, with social inclusion, with social protection and labor rights are key to responding to social requests and for guaranteeing that  the benefits of growth will reach everyone and to guarantee  governance ”

The international organization has alerted almost 4 years ago in its World Employment and Social Outlook Report that only 26% of the world’s active economic population has a permanent contract full-time or indefinitely. There are several emerging forms of work. The morphology of work has changed and the difficulty in classifying it has increased.

The various specific forms of work are the norm, the standard. Although there is no reliable data, the region is no exception as regards to the low relative percentage of employees under the typical labor relationship of the twentieth century. However there is varied empirical evidence about the significant deficit in the modernization of regulatory frameworks. Several countries in the region unsuccessfully intend to address these new realities with categories from the past.

Platform work, gig economy, entrepreneurial ecosystem, technological change, climate change, demographic change, work life balance, long-term learning, project work, temporary jobs, remote jobs and a set of innumerable gray areas that in labor matters present the Fourth Industrial Revolution are not contemplated in many countries of the region whose labor markets are under regulatory frameworks that were conceived during the first half of the last century.

Given the basic difficulty in establishing whether a particular setting corresponds to an employee, a self-employed person or the need to establish a new category, it is worth asking whether in some countries it is necessary to make reforms  in an integral way to modernize labor markets.

The unacceptable rates of youth unemployment in Latin America can only be reduced from an integrated system that connects various ways of acquiring knowledge and skills that complement (and in some cases replace?) the formal education system with various forms of work. These, without exception, must provide portable and flexible rights for workers with access to services according to the need of the 21st century.

Private employment services are at the forefront of this concept by promoting private-public articulation and active employment policies. They should be established in all the countries of the region through the ratification of ILO Convention 181 and they should collaborate more actively in the inclusion by the formation of competences based on demand under various formats and the administration of various contracts of work so that they meet the requests of organizations and workers. The governments of the region have in them potential strategic allies to accelerate this process such as Parliaments, and the obligation to design new regulatory environments.

In several countries of the region, the direct tax burden on a salary is excessive, the diversity of available contracts is very limited, the costs associated with the decoupling are very high and the level of conflict follows the same line. This state of affairs discourages the formal hiring of young people and promotes informality.

The labor system in these countries must be changed, not reformed and also must include disruptions, exclusions / discrimination, educational deficit, skills gap, pension system according to the reality of the 21st century, expectations changes, among other dimensions.

Youth unemployment is an indicator of the degree of development of the region. It is necessary to work urgently on concreting actions that tend to reverse this scenario of youth exclusion and frustration that in some cases can lead to violence and governance problems.

Perhaps that scandalous 20% leads us to rethink the region we want for the next decade. Perhaps this is the foothold for sustainable development in the 21st century.