Why Asia will need 23 million new jobs each year

SIXTY PER CENT of the world’s young people live in Asia, where unemployment is already high and rising. In the poorer countries, one in four who should be enrolled in the lowest level of education are not enrolled. And while new jobs are emerging in the digital age, many youngsters do not have the digital skills required . . .

ASIAN COUNTRIES require 23 million additional jobs each year if they are to ensure that new entrants to the job market are employed. It is an impossible task, because the number of young people unemployed (in a region where 60 per cent of the world’s youth live) is already high and rising.
Many of the 700 million people aged between 15 and 29 in Asia can only find work in the informal sector, without benefits or job security.
Valentina Barucci, a technical officer at the Youth Employment Division with the International Labour Organisation, says the poorer the country, the higher the number of youngsters working in the informal sector.
She says active labour market policy is critical. Research shows that where governments have active labour policies, young people spend less time in unemployment.
Governments need to enshrine in their statutes the rights of young people to work, and to have a system of labour inspection to protect them from exploitation in the workforce because of their age and inexperience.
The key issues in youth unemployment are macroeconomics, education, training and a lack employment service schemes.
Without formal employment services, she says, young people find jobs through family connections and social networks, perpetuating their disadvantage. They need access to contacts who can help them get real jobs.
Barucci says that, in the poorest countries, one in four young people who should be enrolled in the lowest level of education are not. In contrast, the upper middle income and high-income Asian countries have a high level of young people who complete higher education.
Education is the key to securing jobs. Young people need to acquire the skills to work and they can be trained only if they have numeracy and literacy skills, she says.
Asia should adopt the approach used in some European countries to have vocational and technical training alongside the education system. Well set up apprenticeship schemes provide the stepping-stone to employment.
The difference, Barucci says, between formal and informal employment is that, in formal employment, the worker has the benefit of job security. “We have a recent ILO report which brought together 20 national studies — five of which are in Asia.  The studies showed that three-quarters of youth work in the informal sector. That problem is especially relevant to young people.”
In the higher income countries, graduates are unable to find employment and the reason is a mismatch of their skills. “Often they face a situation where their skills are not needed on the labour market.  And this shows that skills mismatch is one of the major challenges we face in Asia today. Even if they have a diploma it does not mean that there is a job opportunity waiting for them. “
Barucci says studies have found that the problem of skills mismatch affects 50 per cent of young workers. They are found to be either under-educated or over-educated for the jobs they are doing.
In East Asia, she says, the global financial crisis exacerbated youth unemployment. Younger workers were among the first to lose their jobs when companies shed staff. As a result, more young people have slipped into the informal sector. Worldwide, the ILO estimates that 73 million youths are unemployed, with three times that number under-employed.
The digital age should come as a boon to young people, whose adoption rate of new technologies is far higher than other age groups throughout the world.
But for many, unless they have the education, they are unable to develop digital skills that will give them an edge in the many new industries spawned by the digital economy.
The International Telecommunication Union in a report published in 2014 says digital solutions have an important role to play in national strategies to overcome youth unemployment.
It says that many young people are not learning the digital skills that have become essential in virtually every market segment. But the good news, it adds, is that there is an explosion of new online learning opportunities for them to get the skills they need.
At the time of the launch, ITU Secretary-
General, Hamadoun I. Toure, said the ongoing information and communication technology revolution is transforming existing sectors and fuelling new business creation — such as the apps economy — which did not exist a few years ago.
He said demand for both basic and more advanced ICT skills cuts across all sectors — from agriculture and construction to education and service industries to ICT jobs themselves, in both developing and developed countries.
Equipping young people with digital skills opens doors to a range of jobs and business
opportunities, he said. The ITU shares the view of the ILO that the entrepreneurs among the young should be encouraged because entrepreneurship is an increasingly-recognised alternative to waged employment.
The problem of jobs, or lack of jobs, is not confined to youth, of course. In its World Employment and Social Outlook 2015, the ILO says employment growth has stalled at a rate of around 1.4 per cent annually since 2011.
In the developed economies and the European Union, employment growth since 2008 has averaged only 0.1 per cent annually, compared with 0.9 per cent between 2000 ad 2007.
The report estimated lost wages around the world at a total of US$1.218 trillion — equivalent to about 1.2 per cent of total annual global output and about 2.0 per cent of total consumption. In addition, slower wage growth has had a substantial impact on the aggregate wage bill.
Because of the multiplier effects of increased wages, higher consumption and increased investment levels, closing the global jobs gap would add an estimated US$3.7 trillion to global GDP, it says.
One quarter of workers worldwide are estimated to have a stable employment relationship. In its analysis of data covering 84 per cent of the global workforce, the ILO found that three-quarters of workers are employed on temporary or short-term contracts, in informal jobs, often with any contract, under own account arrangements, or in unpaid family jobs.
It notes that even among wage and salaried workers, less than half are working on a permanent contract. As a result, income inequality is increasing or remains high in the majority of countries.