Idle youth in PH could cause national crisis - World Bank

By Cai U. Ordinario, BusinessMirror

Posted at May 09 2014 07:57 AM | Updated as of May 09 2014 03:57 PM

MANILA -- Youth inactivity could soon become a "national crisis" for the Philippines, as the World Bank noted that the number of idle young people in the country is already among the highest in the region.

In its ''East Asia Pacific at Work: Employment, Enterprise and Well-Being'' report, the World Bank said scores of young Filipinos are at risk of being unemployed throughout their working lives because of youth inactivity.

“Every young person must find initial employment with limited search skills and little work experience; youth unemployment is a higher risk than unemployment for other age groups. To the extent that unemployment, extended periods of search for work, or underemployment can have long-term, negative consequences on the future labor-market prospects of young people, there is greater cause for concern,” the report stated.

Truman Packard, one of the report’s lead authors, said the “idle” youth included those ages 15 to 24, who are neither employed, in school, nor in skills training.

Packard said youth inactivity is considered “a national crisis” in countries like Greece and Italy because of their high level of youth unemployment.

The Philippines is already in the level of Greece and Italy when it comes to youth inactivity, he said.

Packard said that being at risk of unemployment throughout their working lives is an effect of scarring. This occurs when young members of the labor force are unable to find jobs, be educated, or acquire work-related skills at an early age.

Apart from being at risk of being unemployed throughout their lives, the unemployed youth are also likely to suffer lower wages and labor productivity.

The report added that young unemployed members of the labor force are also more likely to be self-employed, or have contingent (nonpermanent) employment. These workers are also prone to being employed in the informal sector, where incomes are low and employment terms are not fixed.

“Youth unemployment is a problem; youth inactivity is a more pressing problem. There are about 40 or 50 countries that show 15- to 24-year-olds, women and men who are neither in school, in work, nor in training. [Data] indicate the higher levels of the countries in East Asia and the Pacific. Indonesia, the Philippines, Fiji, Vanuatu, all stand out as places with high levels of youth inactivity, as high as levels in Greece and in Italy, where this is considered a national crisis,” Packard said.

In January 2014 the country’s unemployment rate increased to 7.5 percent, from 7.1 percent in January 2013. Almost half, or 48.2 percent, of the unemployed are between 15 and 24 years old.

However, data showed that the unemployment rate in the age group 15 to 24 declined from 49.3 percent in January 2013.

Further, almost half of the country’s unemployed, or around 45.4 percent, were high-school graduates. This was lower than the 47 percent posted in January 2013.