[Global HR Forum 2012] The Social Challenge of Job Creation: Africa's Youth and Women

THE SOCIAL CHALLENGE OF JOB CREATION: AFRICA’S YOUTH AND WOMEN

GLOBAL HR FORUM 2012

Mmantsetsa Marope (Ph.D)

UNESCO Director: Basic Learning and Skills Development Seoul: Korea

October 2012 1

Global Progress in Job Creation

Until the global financial crisis, the long term trend in job creation was overall positive

Earnings also improved over the long term

Developing countries witnessed a decline in poverty • In purchasing power parity, the proportion of people living

on less than US$1.25 per day declined from 52% in 1981 to 22% in 2008 or from 1.94 billion to 1.29 billion

The global financial crisis had a major setback on the gains made in employment creation especially in advanced economies

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Fig 1: Trends in employment rates 1995-2009

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Africa Europe Latin America and Carib.

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Enormity of the Global Job Creation Challenge

Worldwide about 3 billion people are working but only half of them have

salaried jobs

Income insecurity co-exists with long hours of multiple forms of work

Nearly half of the developing countries’ unemployed work long hours in the informal sector ranging from farms to local industry with little to no earnings

The unsalaried workers mostly lack skills required to take up opportunities in highly paying “jobs” or just work

Unsalaried workers are mostly rural women, youth and the unskilled

An estimated 200 million people are unemployed and are actively seeking jobs

75 million of them are youth below the age of 25

2 billion people of working-age are neither working nor actively seeking jobs an unknown proportion may desire a job

In particular, women and youth face enormous difficulties in entering the labor force

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Enormity of the Global Job Creation Challenge

The world’s population of 15 to 24 year olds reached over 1 billion in 2010

outpacing the world’s economies’ capacity to create jobs that meet their demand for employment

One in six of the world’s population are youth and 1 in every 8 of them are unemployed

Youth are three times more likely to be unemployed than adults An estimated 152 million young people (a third of all young workers) earn

less than 1.25 per day Some 621 million youth suffer multiple disengagement (school, training,

jobs, not job seekers and sometimes family). Just to keep the ratio of employment to working age population constant

there’ should be around 600 million more jobs in 2020 than there were in 2005 (15 years)

Because of the growing young population most of these jobs have to be created in Asia and Subs-Saharan Africa

21 million people are victims of forced labor 115 million children work in hazardous environments

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Job Creation: Progress and Potential in Africa

Between 2000 and 2008, Africa created 73 million jobs

The global economic downturn had adverse effects on employment, albeit not as severe as for the developed world

Volatility notwithstanding, Africa strongly rebound from the global downturn with GDP growth of 4.7% in 2011 (see Figure 2) and 5.6% excluding RSA’s over 1/3 of the region’s GDP

Growth is forecast at 5.2% by 2014, creating further potential for job creation, nearly twice the global rate of 2.7% • possible risk with the European economic downturn

• risks with weakening external demand given factor dependent growth

In 2012, African countries accounted for 16 of the 29 world’s fastest growing economies

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Leavers of Africa’s Positive Growth and Outlook

Strong growth is attributable to

• Macroeconomic stability

• Increasing political stability and improving investment climate

• More open economies

• Global demand for natural resource-based primary products

However, there are serious vulnerabilities to factor driven growth • Unstable demand

• Unstable supply—exogenous factors

• Depletion

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Figure 3: Africa’s Development Remains Least Competitive & Vulnerable

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African countries constitute 66% of the least competitive whose development is still factor driven 18% of countries whose development is efficiency driven 0% of countries whose development is innovation driven

Urgency for Africa’s Transition to K&TIE

Knowledge, technology and the interaction

thereof have progressively become key drivers of growth

Even natural resource-based industries have

progressively translated into knowledge-intensive natural resource-based industries

Knowledge and technology application could

extend the range and value of products from natural resources thus improving profitability

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Africa’s Impressive Growth Is Mostly Jobless

Between 2000 and 2008 Africa’s working population (15-64) grew by 25% from 443 million to 550 million or 13 million a year

The 73 million new jobs were therefore created against 107 million increase in the working-age population

If this trend continue, the labor force will reach 1 billion by 2040, surpassing China and India

Annually, 10 million people enter Sub-Saharan Africa’s labor markets.

Coping with this inflow will require a 50% increase in the number of jobs or an employment growth of 2.7%.

To translate growth into job creation, Africa will require deliberate and concerted policy interventions

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Creating Jobs for Africa’s Youth is Even More Daunting

Only 16 million of the 73million jobs created were for youth

This is disproportionately low, considering that two-thirds of the population under 25 years of age

200 million people in Africa are aged between 15 and 24 and the number is expected to double by 2045. • Youth present tremendous potential that can be leveraged or wasted

Youth in many low income countries face insecure jobs and low pay

With better educated youth, Africa’s MICS face the educated unemployed phenomenon

Youth unemployment is highest in MICS (in 2009 North Africa 23.4% and South Africa 44.6% in 2010, Namibia 54.6 % in 2008, Lesotho, 29% in 2008, Mauritius, 19.4% in 2010). • Youth comprise 2/5 of the working age population but 3/5 of the unemployed

• 49% working youth live on less than US$1.25 a day and 73% on less than US$ 2 per day*

• 79% of rural youth relative to 61% of urban youth are in vulnerable employment

• 72% of these rural youth have no or incomplete primary education

• Child labor is a good precursor of unskilled and unemployed youth…most child laborers are in the rural agriculture sector.

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Job Creation Challenge is Deeper for Africa’s Women

Women comprise 80 percent of Sub-Saharan Africa’s non-wage earners

All things being equal (education, experience, the sector, age) women earn far less than men • Enormous implications associated with the foregone benefits of

women’s income

Women’s have less than 50% participation in the labor market in contrasts to 80% for men

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Figure 5: Women are More Prone to Vulnerable Employment

Another issue is the quality of employment: good job vs. vulnerable employment.

Globally and more so in Africa, women are more likely to be unemployed than men

Employed women are most likely to be in vulnerable employment.

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Low Job Creation has Enormous and Diverse Costs for Africa

Long spells of unemployment can lead to the erosion of capabilities through disuse and implied costs of re-capacitating the labor force

Diminished future prospects of unemployment and low productivity

Reduced productivity which is the basis for sustainable growth. As growth supports further job creation…a vicious cycle of low productivity, slow growth, sluggish job creations

Sustained structural and individual poverty

Depressed economic and social development

Depressed innovation, creativity and technology and knowledge diffusion, especially for jobs that could have been created through FDIs with strong forward and backward linkages

Low demand for high level skills and technology and knowledge intensity in production that associated with appropriate FDIs, the resultant loss of labor force incentives for life-long-learning and low competitiveness

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Low Job Creation has Enormous and Diverse Costs for Africa

low earnings, wellbeing, quality of life for individuals and collectives, happiness, self-esteem and pride that comes with being a contributing beneficiary and benefactor

particularly low wellbeing for families (including poor health, nutrition, education) associated with women’s unemployment and the implied cost to the State

sustained gender inequalities where women tend to be among the most excluded from job opportunities and/or have low earnings

regressive redistribution of wealth instead of using earnings from productive work as a sustainable and regenerative redistribution mechanism

sustaining of social inequality, loss of opportunities for shared growth and inclusive development

lost opportunity to positively channel youth intelligence, creativity, vibrancy and energy and the risk of misdirecting energies to destructive non-productive behaviors

sustained poverty, deepening inequities in social and economic development

deepening social tensions and even political and social instability that often follow high inequalities and exclusive and the further erosion of environments that are conducive to growth and social development

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Potential Measures to Reduce the Cost of Low Job Creation

Government should sustain policies that ensure macroeconomic and political stability as well as good governance which are basal to enabling investment climate and enhanced FDI in-flows

Deepen and diversify support mechanisms for private sector development as a key engine of growth and of job creation

Strategically balance “opportunistic FDIs” with FDIs that over the long term, can raise demand for high skills, knowledge and technology application in value added productivity • Globalization and ICTs ease multiple location of elements of a product chain

with developing regions often receiving the lowest end of the value chain and the associated low demand for the skill, knowledge and technology application in productivity

Because growth can be jobless, accompany growth policies deliberate job creation policies that – reduce labor market distortions and rigidities – promote jobs that best support development in a particular country context – promote jobs that reduce vulnerability and protect employers – promote jobs that protect the environment and support green economies – improve opportunities to expand and diversify the value chain of Africa’s

natural resources and thus increase profitability – intensify human capital accumulations

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Potential Measures to Reduce the Cost of Low Job Creation

As a key driver of growth and job creation (especially for women, youth, rural dwellers and the unskilled) the informal sector warrants policy direction

Yet finding the right balance of regulation and taxation and providing incentives for expansion and formalization of informal activities is a challenge. • Forcing compliance with official regulations and taxation could drive it

further underground or out of existence.

Improve education and training opportunities for those engaged in the informal sector and promote sustainable financing for skills development

Strengthening traditional apprenticeships

Strengthen RPL systems

Strengthen the complementarity of training with other small business services

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A Special Word on Africa’s Human Capital Accumulation

By far, sluggish human capital accumulation is one of Africa’s binding constraints to growth, to improving employability and in the long run to job creation • Highly skilled workers raise demand for unskilled labor (skilled and

unskilled labor are complementary).

Specific to education and training, Africa suffers a triple disadvantage of low and inequitable access, poor and inequitable quality and ineffective learning, and doubtful development relevance

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Figure 7: Africa’s High Illiteracy Rates = Weak Base for Human Capital Accumulation

21 Source: UNESCO, UIS data 2000 to 2010

Figure 8: Low Access to Education = Slow Human Capital Accumulation

22 Source: UNESCO, UIS data 2000 to 2010

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Poor & Inequitable Education Quality and Ineffective Learning = Low Base for Human Capital Accumulation

International sassements:

The 2007 TIMSS…in eighteen middle income countries including Botswana, Egypt, Saudi Arabia, Morocco, Algeria, Colombia, the average student mathematics performance was below the low international benchmark • In Ghana, only 17% of 16-year-olds scored above the low international

benchmark • The average student in El Salvador, Ghana ,Indonesia and Morocco

performed equal to or lower than the poorest-performing 10% of students in higher-performing countries( Rep. of Korea, UK..)

For the 2006 PIRLS, the vast majority of grade 4s: • in developed countries performed at or above the intermediate international

benchmark • in participating Africa’s middle income countries—South Africa and Morocco—

and even wealthy Arab States—Kuwait and Qatar—had not acquired basic reading skills

The third SACMEQ (2007) shows that: • After 5 to 6 years of schooling, over a third of learners in Malawi and Zambia

had not acquired basic literacy skills and therefore could not read fluently

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Poor & Inequitable Education Quality and Ineffective Learning = Low Base for Human Capital Accumulation

In Kenya, 17% of grade 3 students in North Eastern Province could read a story in Kiswahili set for grade 2 students, while in Coast province the proportion was more than twice as high*

In Kenya, half of the poorest children in grade 3 could read a standard grade 2 Kiswahili text, compared with about three-quarters of the richest students.

Although Namibia and South Africa have more or less the same average achievement, children from the wealthiest South African households are ten times as likely as children from the poorest households to score well on reading**

The wealth differential in South Africa is more than double the comparable wealth differential in test scores for Namibia**

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Education and Training System Inadequately Responsive

Mismatch of skills supply and demand is most evident in high vacancy rates that coexist with unmet demand for skills especially in Africa’s MICs • ILO studies and others show that it is not unusual to have

high vacancy rates co-existing with unmet demand for jobs

• Youth often find that they do not have the skills employers want

• Youth also often lack the ‘market places’ that match their demand for jobs to available jobs

• Most education and training systems lack career counseling programs

Competencies acquired through education and training don’t always respond to available opportunities especially in rural settings

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Measures Specific to Education and Training

Equitably expand early learning opportunities as an indispensable base for equity and effective learning

Eradicate basic illiteracy

Improve employability through equitably expansion of access to high quality and development responsive education and training opportunities • Institute policies that deliberately target youth, women and rural

dwellers

Strengthen life-long-learning systems

Strengthen partnerships with the demand side of skills

Intensify private sector involvement in determining education and training policies and programs and in ensuring relevance to labor market and world of work

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Thank You