The employment situation of young people in Latin America and the Caribbean is critical, dynamic and segmented

A.        It is critical because average unemployment among young people is, in all countries of the region, much higher than average unemployment overall. In fact, in Latin America and the Caribbean the youth unemployment rate is twice the overall unemployment rate and three times the rate for adults; in some countries it is as high as five times the rate for adults over age 45. What is more, young people account for about 50% of all unemployed workers in nearly every country in the region. The situation is especially critical in certain countries, where unemployment among 15- to 24-year-olds circa 1999 reached levels of 29.5% (Panama) and 27.9% (Uruguay and Venezuela), according to ILO data. The same source indicated that the situation was particularly serious among 15- to 19-year-olds, whose unemployment rates were 37% in Colombia, 35.9% in Argentina and 29.2% in Chile. While open urban unemployment in 1998 was 7.2% in Chile and 10.2% in Uruguay, youth unemployment was 20.8% (15- to 19-year-olds) and 15.1% (20- to 24-year-olds) in Chile and 25.1% (15- to 24-year-olds) in Uruguay. These gaps were also observed circa 1997 in the OECD countries, where youth unemployment was about 13.4%, compared to 5.9% for adults.

This is aggravated by the fact that over the past decade (1990-1999), 7 out of every 10 jobs created in Latin America were in the informal sector, while average unemployment is now higher than it was 10 years ago (to an extreme degree in countries such as Colombia and Argentina). All of this means that employment has become harder to find and that most new jobs are of lower quality and are more unstable, more insecure and lower-paying. Lastly, a young person, on average, requires a longer period of time to find a job than an unemployed adult. If we consider all these issues together, we find ourselves facing a critical youth employment situation in Latin America.

In Latin America, young people today are more educated than their parents were. They have greater knowledge and higher consumer expectations as a result of their exposure to the cultural industry, and they have taken in the promises of development propagated by political figures, the family and the schools. On the other hand, the rate of youth unemployment is two or three times higher than the rate for the rest of the population. Young people have assimilated implicit promises of social mobility and a place in society, given the fact that they are more educated than their parents, but at the same time they come up against a situation in which their real work opportunities are more limited and do not correspond to the fund of knowledge they have accumulated during childhood and adolescence. They are treated as children by adults (politicians, entrepreneurs and the media), and a cultural bias often stigmatizes them as potentially violent, drug-consuming and morally weak – to the extent that this bias often becomes a self-fulfilling prophecy. Faced with difficulties in assuming a role in production, young people become more likely to operate on the fringes of, or even against, the existing institutional structure. It is no coincidence that young people have headed the increase in urban violence over the last decade. In some countries, including Mexico, Venezuela, Colombia and Brazil, the media industry developed vigorously and both the coverage and the achievements of the school system soared over that period, but trends in youth employment and quality of life for new generations were radically different. Steeply rising levels of violence in Latin American cities in the 1980s and early 1990s (with these very countries - Mexico, Venezuela, Colombia and Brazil - heading the list) were symptomatic of these problems.

B.         It is dynamic because the relationship between educational achievements and requirements in the work environment is changing rapidly as those requirements shift in response to changes in technology and in national economies’ areas of specialization and linkages with the global system; because the ratio of young women to men in the economically active population is changing; because the reforms being made to increase labour flexibility are increasing the vulnerability of workers, especially those who are first entering this new institutional framework; because young people’s expectations are very dynamic and easily influenced by cultural changes; and because, for the young people now joining the economically active population, the new production patterns have moved away from the concept of stability and long-term employment.

C.        It is segmented because more highly educated young people have a better employment outlook in terms of income, working conditions, social status and mobility, technological competitiveness and job satisfaction. In all the countries of Latin America, except Cuba and to a lesser degree Uruguay, there is a very strong correlation between educational achievement and the income level of students’ families, which reproduces existing disparities in the future. This situation is compounded by the fact that in the “new economy”, access to employment for young people tends to be polarized. On the one hand, there is a privileged group of computer-literate young people who become professionals on a “fast track” career path or successful entrepreneurs who have a greater command than adults of the new skills required in the information society (the use of virtual networks and adaptation to deregulated flexible markets); while on the other hand, there is a large number of young people who hold insecure, low-level jobs in the informal sector or who are employed in the formal sector in low-skill positions where wage levels are declining in comparative terms. Lastly, there is segmentation by gender (Latin American women continue to have lower incomes than men with the same level of education and skills), by area (rural youths in Latin America have far fewer opportunities than urban youths for the simple reason that they do not live near modernized enclaves) and by network (young people from middle- and high-income urban families have greater access to good jobs through family contacts, classmates and friends in business or in the State technocracy).

The segmentation of unemployment is clearly biased by income group and educational level. By analysing youth unemployment according to household income level, ECLAC has shown that, between 1990 and 1997, the ratio between typical unemployment rates in the poorest and the richest quartiles steadily increased in 8 of the 12 Latin American countries studied. In Honduras in 1997, the unemployment rate for the first income quartile was 13.1 times higher than the rate for the fourth quartile (the highest income level); this gap was also very wide in Argentina (9.5) and Bolivia (8.3).  In Brazil, circa 1997, youth unemployment was 10.1% in the fourth quartile, compared to 22.7% in the first quartile. In Chile the rates were 5.8% and 25.8%, respectively, and in Bolivia they were 2.0% and 16.5%, respectively. In Argentina, the open unemployment rate for young people from poor households in urban areas rose from 40.0% to 55.4% between 1990 and 1997, while the rate for the country’s youth population as a whole was 24.3% in 1997.  Similar gaps were observed in Colombia and Panama. 

At the same time, unemployment among young people not attending school is more severe among those from low-income households. According to ECLAC sources, in Brazil unemployment among young people not in school rose by 8 percentage points between 1990 and 1997, owing primarily to the lack of growth in young women’s employment, while in Argentina, unemployment among young people not in school and belonging to poor households rose by more than 15 points over the same period. In Mexico this group saw a 3% rise in unemployment during that time.

Lastly, the segmentation resulting from the correlation between education levels and working conditions also reveals three problematic groups in the Latin American countries. First, there are adolescents and young people who work and who cannot continue their education (representing about two thirds of those who have managed to find jobs), most of whom work to contribute to household income. The second group consists of young people who neither work nor attend school. While this group has shrunk since the early 1990s, it continues to account for 12% to 40% of young people in poor households, and 2% to 10% of those in higher-income households. The third group consists of young people who have left school with less than 10 years of education (meaning that they have very little chance of earning incomes that represent upward social mobility). This group has also become smaller, but young people in this category continue to represent between 20% and 50% of the total -in the lowest-income quartile, this proportion ranges from 38% to 82% in different countries.