Youth unemployment is inevitable

Contrary to the excitement over high youth unemployment figures, we have come to accept that relatively high unemployment is natural, if not inevitable.

In the 1950s and 60s 2% unemployment was often seen as high. Now we see extraordinary figures of unemployment in the developing world and elsewhere. The difference is that in the 50s and 60s most governments put emphasis on creating full employment, and often came near to achieving this. In the last few decades it has become a much lower priority in government policy. Instead, controlling inflation has become the goal. We have seen this with the governments in South Africa and Brazil for example, running economic policies to contain inflation, serving to create a low growth, low employment regime. In many developing countries this state of affairs has come to be accepted as normal.

The neoliberal approach to economic policy won't solve the problem

With its profit-seeking logic, deregulation, and prioritisation on controling inflation, there is an inevitable tendency to create unemployment in capitalism. Youth are more likely to suffer because it is easier to stop hiring than to fire existing staff. We have been beaten into believing that inflation control is all that matters and so first we need to change our mindset. If you have the right economic policies, you can counter the inevitable trend towards high youth unemployment.

We are starting to see glimpses of the end of the neoliberal approach as countries in the developing world are turning away from policies that put excessive emphasise on inflation control. Of course policies need to be country-specific but, in general, there needs to be more focus on channeling resources into productive enterprise. To create more jobs and jobs that are meaningful, policies need to lower interest rates, extend government investment in public infrastructure and support training for young people.

Job creation doesn't always need to be left to the experts

Often job creation and labour policy is seen as the reserve of the experts. I would question who these experts are. If they are those that have been running policy and advising policymakers then their record on youth unemployment so far has been quite pathetic. Of course we need technical expertise to execute and design policy, but when it comes to getting details of the big picture right, namely emphasis on creating more meaningful jobs and protecting workers rights, these need to be set by the general public.

The employment figures don't tell the whole story

The employment figures in many developing countries are misleading. At the moment many so-called employed young people are actually engaged in very marginalised jobs in the informal sector. You see this for yourself when you come to a junction in a developing country and your car is swarmed by young people and children who try to sell you things. This isn't employment, it's a glorified form of begging. Job creation needs to be about creating meaningful work.

More education doesn't equal more employment

There is a naive view that giving more education to young people will help them get employed. This is a myth. Often the types of education available aren't useful for young people's employment in that particular labour market.

Developing countries need to invest not just in formal education but in skills training – either in a specific insitute or on the job. Companies won't necessarily do this of their own initiative so governments need to provide the incentive. They need to think harder about developing specific training policies rather than just lumping it with vaguely defined education policies. If they don't do this then they are going to continue to have an economy where qualified engineers drive taxis.

Entrepreneurship should not be left to the individual

Entrepreneurship is important but people often make the huge mistake of assuming it is an individual endeavour. The recipe is often to let people do whatever they want by deregulating the economy, lend them some finance and they will take care of themsleves. Today even that has become difficult because lots of microfinance companies are now charging extortionate interest rates. At best, the way we support entrepreneurship just lets young people survive and prosper at very low level.

If you want to set up your Samsungs and your Volkswagens of the developing world, entrepreneurship needs to be done collectively. Governments need to support this by providing good infrastructure, education, investing in science and research, and creating mechanisms for people to collectively create organisations.

Read more stories like this:

• Decent work for youths: it's not about us vs them

• An economist's answer to the youth employment crisis in Africa

• Youth entrepreneurship: your stories

Join the community of global development professionals and experts. Become a GDPN member to get more stories like this direct to your inbox