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Global Youth Unemployment, Income Inequality Rising
World Economy

Global Youth Unemployment, Income Inequality Rising

The world’s youth unemployment rate may be “six or seven times” what the International Labor Organization’s (ILO) latest figures state, according to a global youth advocacy group.
The ILO recently released its 2015 World Employment and Social Outlook (WESO) report, and presented the findings to the United Nations, IPS reported Sunday.
One of the report’s major findings is the worldwide unemployment rate among 15 to 24-year-olds of 13 percent, or 74 million youths, is set to rise.
William Reese, CEO of the International Youth Foundation, thinks that figure is significantly underestimated.
“I’m not surprised by that number, because it is probably much higher than they state. We’ve seen reports of over 70 million young people unemployed, but the real number is probably six or seven times that,” Reese said.
 “Those statistics are typically assessing people who are looking for jobs, so if you’re not looking for work, you’re technically not unemployed. People in poor countries are often under-employed or underpaid,” Reese told IPS.

Statistics
“Unemployment statistics don’t take that into consideration. People in poor countries do work; if they didn’t, they would die. But in poorer countries, data is even worse.”
The WESO report warns the effects of the 2008 global economic crisis are still heavily impacting nations worldwide, especially developing economies.
The report outlines a widening income and wealth inequality, as well as sluggish economic growth, but while overall global unemployment is steady, youth unemployment is tipped to increase in coming years.
“Youth, especially young women, continue to be disproportionately affected by unemployment,” the report states, saying the 2014 youth unemployment rate was almost three times higher than the overall unemployment rate.

Slow Economic Growth
Ekkehard Ernst, chief of the ILO’s Job Friendly Macroeconomic Policies Team, told IPS slow economic growth was to blame for expected spikes in youth jobless rates.
“Growth is too slow to make a difference in job creation,” Ernst said. “Economies take much longer to recover after a financial crisis than a normal recession. It makes a difference to growth acceleration.”
Global growth has risen slowly for the last two years, from 2.2 percent in 2012 to 2.3 percent in 2013 and 2.5 percent in 2014, but is still well below the pre-crisis levels of around four percent.
Reese said a mismatch of skills was also to blame for rising youth unemployment.

Less Skills
“There are job openings, but companies can’t find people with the right skills. Schools are not asking what the business community needs today. They are teaching what businesses might have wanted five years ago,” Reese said.
“There are more college-educated unemployed in some parts of the world, than high school-educated unemployed. Sometimes, kids today don’t come in with the disposition to work hard or be a team player.”
The ILO reports youth unemployment was especially problematic in Europe, with rates of up to 52 percent in Greece and Spain. The ILO predicts between 2014 and 2019, youth unemployment will rise by up to eight percent in parts of Europe, South America and Africa.
In 2014, global unemployment stood at 201 million people, 1.2 million higher than 2013. That number is expected to rise to 212 million by 2019.
“We’re seeing a huge number of unemployed. The global unemployment rate is around six percent and that won’t shrink any time soon,” Ernst said.
He said, however, that rising unemployment was not necessarily a sign of a poor economic climate. He said rising unemployment in many Asian countries, especially in economies such as China and India, was a sign of a modernizing economy, as workers move from stable yet low-paying jobs in rural areas to seek higher paying jobs in urban centres.
“This type of unemployment is a rebalancing of the economy. Asian countries will see an increase in unemployment as they develop, which is a normal process of development,” Ernst said.
“New technology requires jobs be shuffled from one industry to another. China is so big, if they have a higher unemployment rate then that will affect world unemployment figures.
“People are moving from low-income agricultural jobs, to middle-income jobs in manufacturing, and then onto higher incomes in the service industry.”
Rising unemployment and sluggish economic growth is predicted to further widen income and wealth inequality worldwide; the richest 10 percent of the world will hold 30 to 40 percent of total income, while the poorest 10 percent will earn as little as two percent.

 

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