Addressing the youth employment universe demands working with objective data and empirical evidence in order to avoid falling into circular arguments that only fuel dangerous populist discourses.

By Martín Padulla

The American continent is known as the young continent. Latin America is even younger.

When analysing the almost 600 million regional inhabitants, we find out that around 70% of them are under 40 years old. In 1950, this analysis was made over 162 million inhabitants among whom 80% were under 40 years old. If we go forward to 2050, we can expect there will be 734 million inhabitants, 50% of them younger than 40 years old. In a century (1950-2050), life expectancy shall go from 52 years old to 81 years old. Latin America will still be young, but it will also demand an important productive effort from young people in order to take care of their own needs when they become elder grownups.

This is a context that may help us analyse the issue that affects young people nowadays; the issue that affects 108 million Latin-Americans.

By entering into this universe we may understand that 56 million of these youngsters work. They have managed to enter the labour market, though almost half of them have an informal job. Over 30 million youngsters study. Barely over 13 million work and study. And almost 22 million of them neither work nor study, they are part of the NEETs’ category.  NEETs comprehend around 20% of young people who are old enough to work. It is estimated that 4.6 million youths are the core group of excluded youngsters.

The thing that happens with our youngsters when they aim to enter the labour market is that, in certain cases they lack the skills demanded by the market, while in other cases they receive job offers that are far away from being decent work offers. On the one hand, the trap of employability. On the other hand, the scourge of informality.

Those who manage to enter the formal labour market, do so mainly through private employment agencies. These agencies enable young people to start working through a formal working contract, they grant them the possibility of training based on demand and enable a significant percentage of youngsters to keep on working in the user company through permanent contracts. These companies in Latin America, and in the rest of the world, address three major problems: employability, unemployment and informality.

A recent global study, developed by the International Confederation of Private Employment Agencies (CIETT), has shown that 82% of young agency workers are either satisfied or very satisfied with their jobs and 76% recommend agency work.

In Brazil, 85% of agency workers come from unemployment and a very small percentage go back into that situation. For the majority of these workers, it is the beginning of a career in a formal framework.

Despite all this evidence, we still see a small penetration of agency work in our labour markets: an average of 0.6%, while labour markets in developed countries have an average penetration rate of 2%.

Countries such as Argentina have shown for the past 15 years a rate that does not go higher than 0.4%.

When we analyse the Talent Competitiveness Index developed by Adecco, we see that, in general terms, our countries do not qualify properly due to the rigidity of their labour markets.

The study states that there are certain key recommendations to improve talent competitiveness in both, countries and companies:

1. There is need for training and development opportunities to complement formal education.

2. Talent development strategies should focus on the concept of labour capacities in order to satisfy business needs.

3. Trade, investment and labour mobility openness is a key element to achieve talent competitiveness.

In addition, it is necessary to develop structural reforms by:

1. Increasing the labour market’s flexibility, guaranteeing further rotation and access to jobs.

2. Simplifying labour regulations and bureaucracy.

3. Liberalizing the labour market: breaking down rules and barriers, reducing employment taxes in order to increase productivity and to improve competitiveness in the international scenery.

The so called Youth Employment is a strategic and transcendent issue for a “young” continent. As I have stated in other columns, the employability’s challenge defines productivity and competitiveness in our countries.

Is there a real concern over youth employment issues? Evidence shows that appropriate regulatory frameworks, such as ILO’s C181 on private employment agencies, elaborated by workers, employers and governments, directly address unemployment and informality, optimizing employability.

The only reason that explains why C181 has not been ratified in every country in the region yet, is the evident lack of sectorial clarity to communicate to every regional social actor the positive impact private employment agencies have on modernizing labour markets.

It is essential to work on objective information and empirical evidence in order to leave behind vacuous, circular arguments that, in certain cases, are only useful to fuel dangerous populisms.

This is the reliable way to design modern and inclusive labour markets.

About Martin Padulla

Managing Director of staffingamericalatina. Martin Padulla is Sociologist (USAL), MBA (UCA) and labour markets expert. He published “Flexible Work in South America” and “Regulatory framework for private employment agencies in Latin America” two books about the new realities of work in Latin America.

mpadulla@staffingamericalatina.com

About staffingamericalatina

It is the unique independent digital media specialized in Latin American´s labour markets.

Produce and spread contents, researches and developments about issues such us Employability, Youth Employment, Training for Employment, Decent Work, Private Employment Agencies, Active policies for employment, Teleworking, Public and private actions for the creation of decent work, Green Jobs and Corporate Social Responsibility.

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