Herald Sunday Edition

Youth unemployment: Causes, effects and solutions

— December 8, 2019 459 comments

Introduction: The speed at which the number of unemployed graduates rises is a serious political, economic and social problem in Ethiopia. It constitutes an impending danger and malice to the country in general and to the families of graduates in particular. Youth unemployment could create tensions and hatred between ethnic groups and those who have amassed wealth illegally. It could also cause communal clashes and the rise of youth groups ready for robbery and social unrest that negatively affect the security of lives and properties.

I think the “extended family system” in Ethiopia has absorbed the brunt of the problem of youth unemployment. The family of the unemployed youth has immensely invested in the development of the child though all stages of life. But, this investment in education has no return for the family and for the society at large. Similarly, investment in education using tax payers’ money, with the instrumentality of the government, is wasted if graduates remained unemployed. Productive use of resources committed to education should have been used in relation to the human resources requirement of the economy as a whole and to the needs of economic sectors in particular.

The intent of this article is not to reveal to the readers the size of unemployment, particularly urban unemployment in statistical mode. The purpose is to reveal the need for creating labor market that serves better to mitigate the problem, if not eliminate it. It is recommended that the government should invest on technical education that inculcates “self-reliance and self-employment,” in the youth. Instead of the tradition of job-seeking, the youth should be enabled to acquire employable skills through vocational training.

In Ethiopia, it should be expected that both individuals and government at all levels should collaborate in a productive manner that ensures that the unemployed youth would contribute to stability and democracy. Though chronic unemployment among the youth is obvious, they should be encouraged to “re-train” themselves in employable skills as their counterparts do in the developed world. But, this skill should be determined by the relevant authorities based on analysis of skills market. It is a great waste of resources for Ethiopia to invest in skill development for which there is no market.

Situation of the unemployed: The situation of the unemployed youth in urban areas is a threat to urban dwellers in Ethiopia. Where there are no jobs, streets are littered with youth hawkers and robbers. They also infest markets, shops, human settlements without any restraint. One might expect the youth skilled in IT to shift their attention to cybercrime, which is a horror for the financial and banking sectors. Unfortunately, this is an evil use of modern technological skills, which should have been applied for further technological promotions. Admittedly, IT is the domain of the youth, which should have been channeled towards economic advancement as we see it in the developed and emerging countries.

Politically speaking, we cannot underestimate the capability of the unemployed youth to undermine our infant democratic practice. As pointed out by Adepegba and his colleagues, 2011, the unemployed youth constitute a serious threat if engaged by the political class for clandestine activities.

The International Labor Organization (ILO) defines the unemployed as those that are “economically active population who are without work but available for and seeking work.” These include people who have lost their jobs and those who have voluntarily left work. Unemployment exists when members of the “labor force wish to work but cannot get jobs.”

Governments should be able to create viable institutions which will encourage the youths towards job creation rather than job-seeking. Youth unemployment could be taken as youths with diverse background, willing and able to work, but cannot find the type of job that they are trained for. The youth, at first, will be happy to work in their area of expertise. However, when the supply of labor exceeds the demand for labor, they may be forced to take any job. In the absence of sufficient employment opportunities, young people may be forced to engage in casual work. They may also engage in “unethical livelihood,” such as robbery, cheating and drag dealing, thus leading to “youth underemployment.”

Major categories of unemployment: There are different kinds of unemployment which we have to address for the purpose of taking appropriate and relevant policy measures. These are:

a) Frictional unemployment: This is caused by industrial frictions in which jobs may

b) Residual unemployment: This is caused by personal factors such as old age, physical or mental disability, poor work attitude and inadequate training.

c) Technological unemployment: It is caused by changes in the techniques of production. Technological changes are taking place constantly, leading to the increased mechanization of the production process.

This naturally results in the displacement of labor thereby causing unemployment.

Some causes of urban youth unemployment: The major causes of youth unemployment are identified to be the following:

1) Rural-urban migration: This is normally explained in terms of push-pull factors. The push factors are the pressure resulting from excess labor in the rural areas. This is due to the existence of serious underemployment arising from the seasonal nature of rural activities. Also, the lack of infrastructural facilities makes rural life unattractive. This forces the unemployed youth to move to the urban centers with the hope of securing employment in industries. The pull factors consist of concentration of social amenities in the urban centers that attract the rural youth. This meant that the rural areas are neglected in the allocation of social amenities and economic opportunities.

In the case of Ethiopia, youth migration to Addis Ababa takes place stage by stage. The youth migrate first to the nearest regional town. If they fail to find jobs here, they move to the next town, after which they end up in the capital city. It is a precondition for the migrant youth to find relatives in these towns or in Addis for accommodation.

2) Rapid population growth: With increase in the rural population, farm land is becoming scarce. The rural family suffers from the burden of dependents and from scarcity of arable land for crop production to maintain the family members. This family is not fully supported with the latest technological inputs that enhance agricultural productivity. Moreover, the rural areas are overcrowded with school graduates, who seek urban employment.

The high rural population growth rate has resulted in the rapid growth of the rural labor force, which is far outstripping the supply of rural jobs. The effect of accelerated growth of population on Ethiopia’s unemployment problem is multifaceted. It affects the supply side through a high and rapid increase in the labor force relative to the absorptive capacity of the rural sector.

3) Low standard of education: It is observed that the average Ethiopian graduate does not have employable skill. He/she does not possess the skills needed by the employers in the formal sector. It is costly for employers to engage fresh graduates that will not help their firms to produce profitably. The goal of every enterprise is to make profit. Lack of proper skills required by employers is attributable to the educational system.

4) Lack of entrepreneurship: Most tertiary education lack entrepreneurial contents that would have enabled graduates to become job creators rather than job seekers. Moreover, entrepreneurs have been constrained by lack of access to capital to establish their own new businesses after graduation.

Low employment opportunities for young graduates create political and social problems. They tend to be violent as they are not able to play a useful role in the society.

 5) The rapid expansion of the educational system: This leads to an increase in the supply of graduates above the corresponding demand for them. This results in youth unemployment. Both public and private universities that are mushrooming at all levels and in all regional states indicate that there is strong demand for higher education in Ethiopia. But, there has been a lack of employment opportunities for the varieties of graduates from these universities. This situation reflects the reality that the Ethiopian economy could not absorb a large number of graduates. It also indicated that the educational and training system does not address the skill requirement of the economy.

6) Shortage of infrastructure: This reality is negatively affecting existing and future investment in Ethiopia. The government has been trying to overcome the shortage of infrastructure in the country. However, the cost of operation of power, for example, has become high and rising for investors. Several levies, taxation and inefficient public service combined with the power and water crises have made the “cost of doing business” very exorbitant.

These multiple problems may lead to the closure or relocation of industries to favorable economic zones. This forces the laying off workers with multiple political, economic and social consequences. All these exacerbate the problem of youth unemployment.

7. Corruption: This cancer is spreading through the entire social structure of Ethiopia. It has robbed the country of the opportunity to develop a vibrant economic base. Funds meant for development projects have been misappropriated, diverted, or embezzled and stashed away in foreign banks. Some incompetent and corrupt bureaucrats and administrators in the public enterprise have liquidated these firms. The collaboration of the political elites, local and foreign contractors have inflated “contract payments” to rob the country of its revenues. This destroyed the vibrant economy that would have created jobs for the youth.

In the past 27 years, political leaders, government officials and their close associates preyed on the nation’s wealth, by using resources, utilities, financial institutions for their personal gains. They crippled the economy and exacerbated unemployment. This led to abject poverty, hunger and frustration among the youth.

Some effects of unemployment: Some of the effects of unemployment in Ethiopia include the following elements. 1) Inequality of income: This is one of the effects of unemployment in the country. Wealth is concentrated in the hands of a few individuals, causing inequality. As a result, a large segment of the people suffered from abject poverty. It is expected that inequality of income and poverty lead to unemployment and increase in violent crimes. This is a consequence of failure of the government to address socio-economic issues facing the nation. In regions where people are divided along ethnic lines due to political interests, unemployment and poverty become rampant and dangerous, leading to unequal treatment of citizens.

2) Decline in standard of living: Though this depends largely on family income, it is seriously affected by insecurity, tension and conflict. Access to shelter, education and health care, nutrition are drastically reduced which ultimately led to reduction in life span.

Despite reported growth in the GDP, it is not reflected in the social welfare, security and employment of the youth. This creates frustration among the youth.

3) Crisis in the tourism sector: This sector may be affected by the overall economic crisis in the country. A slight political and social tremor affects it. This sector should be protected to attract tourists. As a major source of foreign exchange and provider of employment it deserves the attention of the concerned agency of the government. But, the intensified ethnic conflicts cause a reduction in the flow tourists to Ethiopia. It is expected that the aviation sector also suffers from low tourist turnout. Other service sectors such as hotels, transport and souvenir shops are seriously affected if tourism is on the decline.

4) Job insecurity: job security is a situation whereby one can have access to the type of job he or she is trained to do, which gives an individual job satisfaction. Those who are job insecure consist of the older unemployed who have lost their jobs through retrenchment, redundancy, or bankruptcy. It also includes the younger unemployed, most of who have never been employed at all. All these are bound to suffer from job insecurity that leads to loss of self-respect as citizens.

Some solutions to the youth unemployment:

a) Encourage private investment: The government should create socioeconomic and political environment that encourage the private investors. It should also provide infrastructure to facilitate an industrial climate that promotes private investors. These investors create additional jobs that absorb the unemployed youth. In this respect, the creation of development centers will massively equip the youth with useful trade and entrepreneurial skills.

b) Encourage agriculture, valleys development and rural infrastructure: agricultural production and processing is a major employment generating activity. Valley development, supported by malaria eradication and banking facilities, has great potential for attracting investors. Infrastructure development attracts investment to the rural sector. Preparation of arable land is a precondition for rural investment. Investors may engage in agro-processing enterprises that are major providers of employment for both skilled and unskilled rural youth. They also produce commodities for local and external markets. They supply local markets with food and inputs for processing industries. They earn foreign exchange by exporting processed outputs such as cotton, coffee, sesame, skins, flowers, and related produces. It is, therefore, imperative to encourage investors in the agro-processing firms that create employment for the youth.

c) Encourage labor-intensive technology: Employment creation for the youth depends on the employment strategy the country adopts. The use of labor intensive technology facilitates the creation of jobs for the unemployed. But, care is taken not to disrupt technologies that are capital-intensive in their nature. One strategy should not discourage the proper application of the other.

d) Joint ventures: Ethiopia is endowed with strategic natural and mineral resources that are not fully discovered and utilized. This requires knowledge of their availability using IT. Exploration and development of these resources needs massive investment. This needs economic strategy that facilitates joint-ventures with the developed and emerging countries. Such endeavors will result in the creation of jobs for the youth.

e) Encourage foreign direct investment (FDI): Vibrant economies attract FDI, which may engage in medium and heavy industries that require massive investment. But, FDI presupposes the existence of politically and socially secure environment conducive to economic development. Foreign investors depend on the ability of the government to maintain law and order. Technologists and employees in FDI firms desire secure environment in which they could work productively. The cost of insurance rises where economic security is not guaranteed.

The encouragement of FDI generates immense opportunity of employment for the youth.

f) Attract remittance: Ethiopians working abroad are eager to remit part of their income to support their dependents in the country. Economic diplomacy should be used intelligently to build the confidence of Ethiopians working abroad so that they send their money to their dependents through the formal financial channels. This increases the foreign exchange needed for importing means of production that create employment for the youth.

g) Real-estate development: Ethiopia is a country with huge potentials for urbanization. Regional and sub-regional towns are flourishing following agro-industrial and rural development. These towns will be crowded with workers engaged in agro-industries and service sectors. Wherever there is economic development, service workers come into the picture with all kinds of problems, including housing shortage. Real-estate owners should be encouraged to attend to these problems by providing low-cost houses. The real-estates have the great potential to create jobs for the rural youth.

h) Peace advocacy: Ethiopia should work hard to retain peace among the youth by creating jobs. Such efforts may be supported by the international organizations that will complement and strengthen the peace efforts of the government.

The Ethiopian Herald Sunday December 8/2019

BY GETACHEW MINAS

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