The youth jobs crisis, which first became apparent in China, points to major economic and social problems that governments and businesses need to address.
Last year, unemployment, poor job prospects and a general lack of economic opportunities drove youth onto the streets in Kenya, Peru, Nepal, Indonesia and the Philippines.
This year, concerns about youth unemployment have fueled protests in South Africa and Morocco. In India, he helped give birth to the Cockroach Janata Party, a movement that began as a satirical social media project but quickly gained national attention.
China’s youth unemployment problem
Youth unemployment refers to the share of youth, typically aged 15 to 24, who are actively looking for work but cannot find it. This rate is usually higher than overall unemployment because young people have less experience and networking opportunities, but the gap is widening in a growing number of countries.
China became an early example of this problem as university enrollments and graduation numbers grew faster than job creation, contributing to anxiety, lengthy job searches, and underemployment during a period of weak economic growth.
In May, the official unemployment rate among urban youth aged 16 to 24 in China was 15.6%, according to Reuters news agency based on data from the National Bureau of Statistics.
While this represents the lowest level in 11 months, it is more than three times the overall unemployment rate of about 5%. From 2023 onwards, Chinese youth unemployment figures do not include millions of university students, making comparisons with older data difficult.
Is AI reshaping entry-level job opportunities?
China is not the only country with a sense of weak growth, slow upward mobility or inter-generational inequality.
In other countries, technology, sluggish recruitment and increasing competition have also weakened the link between a university degree and a secure white-collar career.
Apart from the increasing number of graduates, another factor reducing confidence is the fear that artificial intelligence (AI) could become a destroyer of entry-level jobs on a large scale. Experts are not yet clear about its effect.
“In the UK, new postings for graduate jobs have declined faster than for non-graduate jobs, and many of these roles are less exposed to AI,” said Golo Henske, associate professor of applied economics at University College London.
Their research shows that “while companies have rapidly adopted AI, employment of 15 to 24-year-olds has grown more slowly, while prime-age employment has remained stagnant.” But for now, the AI impact is small compared to the regular business cycle.
Sarah Elder, youth employment expert at the Geneva-based International Labor Organization (ILO), agrees. AI may be one of the current drivers of stagnation in youth employment, but she sees other factors as more important.
Elder says that right now, economies are not dynamic and job creation is not keeping pace with the number of youth seeking jobs.
“This is then compounded by a trend for employers to raise hiring criteria in a way that makes it more difficult for young people with less job experience to get their foot in the door,” Elder said.
Where and what types of jobs are affected?
Without these entry-level jobs, young people will never get the experience they need to land better jobs. The results could be lower consumption, lower home ownership rates and delayed family formation – not to mention widespread despair.
There is currently no widespread jobs crisis for young people across Europe, says Henske, who specializes in education, labor markets and human resources.
Since 2022, the share of youth deprived of employment, education or training has increased in a handful of European countries such as Austria and Germany and declined in much of Southern Europe.
“Youth unemployment is nothing new for Europe,” Henske said. “This was severe after the financial crisis, and the biggest improvements since then have been in the countries that struggled most then.”
But the ILO found that youth unemployment rates will increase between 2023 and 2025 in eight out of 11 regions of the world, namely East Asia, North America (US and Canada), Southeast Asia and the Pacific.
Opportunities for youth have diminished, especially in the manufacturing, construction and service sectors.
“Jobs for youth in high-skilled knowledge-based technical sectors such as science, engineering, health and information and communications technologies have fared better, seeing sustained growth in most countries,” Elder said.
What can be done about entry level jobs?
In Germany, a survey this spring by consultancy EY found that students are much less optimistic about finding a suitable job after graduation than two years ago. Job security is now their top priority even before salary while choosing an employer.
There is a lot of scope for improvement. Policymakers and employers will need to make larger investments to create good jobs and “support young people’s school-to-work transition,” Elder said.
Golo Henske is cautious about blaming the skills of young people. “It is very unlikely that today’s graduates are less capable than those who left education a few years ago, and the skills that employers want have not changed overnight.”
Henske concluded, “More than anything, what will help is economic growth.”
Edited by: Andreas Becker