The COVID-19 pandemic has significantly affected young people’s employment. According to a recent report by the International Labor Organization (ILO), one in six people under the age of 30 are currently unemployed, and those who have kept their jobs have experienced a cut in their income due to a reduction in working hours.
Data from the National Institute of Statistics and Census (INEC) indicate that as of December 2019, 37% of Ecuador’s unemployed are young people aged 15-24, while 29% are young people between 25 and 34 years old. In addition to this, seven out of ten young people are currently working in the informal economy; that is, they lack access to benefits such as social security, paid vacations, sick and parental leaves, among others.
Furthermore, according to the ILO’s report, 46.7% of the employed population in the country are in the informal sector of the economy. Hence, it is of utmost importance to work towards their transition to decent working conditions; to improve their quality of life, to guarantee an inclusive, sustainable economic growth, and thus, fulfill the Sustainable Development Goals and 2030 Agenda promoted by the United Nations System.
In this context, and through the Joint Fund for Sustainable Development Goals’ funding initiative, the International Labor Organization (ILO), the United Nations Development Programme (UNDP) and UN Women developed the project "Expanding the Social Protection System to Young Men and Women in the Informal Economy", which seeks to extend social security coverage to young people between the ages of 18 and 29, and improve their access to better job opportunities.
The Joint Program also aims at encouraging the transition of young workers to formality through vocational and technical training, financial education tools and the design of a financial inclusion strategy, as well as the design of local care services and awareness raising campaigns on the rights to access social protection.
The Program has the support and is working together with the Vice Presidency of the Republic, the Ecuadorian Institute of Social Security (IESS), the Ministry of Labor, the Ministry of Economic and Social Inclusion (MIES) and the Ministry of Foreign Affairs and Human Mobility, and attempts to build a comprehensive strategy to protect the vulnerable youth.
On this International Youth Day it is necessary to bear in mind that unemployment figures worldwide have soared, mainly as the result of the pandemic and that this phenomenon has affected young people the most. Particularly, in Ecuador, between the months of May and June 2020, the latest official national unemployment rate has increased to 13.3% (up from 3.8% in December 2019), with the effect of the pandemic being stronger in women (15.15%) than men (11.6%).
Furthermore, the ILO’s report indicates that as of December of 2019, 57 out of every 100 young people between the ages of 18 and 29 were working, six out of every 100 were unemployed and 37 out of 100 were inactive. This situation is no longer the case as underemployment (at the national level) has increased to 34.5% and adequate employment has fallen from 38.8% to 16.7% as a percentage of the working-age population. As a result, many young workers have turned to the informal economy to earn some income to support their families.
Why young workers are affected the most?
Youth access to social protection is still low in Ecuador. As of July 2020, there were 3.4 million people in the Ecuadorian social security system. Among them, 690.869 are people between 18 and 29 years old; that is, young people represent only 20.24% of the total social security system. In terms of gender, 11.56% of young contributors are men and 8.68% are women.
Furthermore, recent data from the Ecuadorian Social Security Institute (IESS) indicate that from March to June of this year 270,638 workers have exited the social security system, out of which 108,232 were people between 21 and 30 years of age. Businesses foreclosures, massive layoffs and the lack of new job opportunities are some of the reasons that help explain young workers’ current situation.
A common phenomenon in Ecuador, as in many developing countries, is that young workers enter the labor market at a disadvantage, which is explained by several factors. Firstly, young workers tend to lack experience, which is a disincentive for firms to hire them over an older candidate with some work experience. Additionally, young people’s socio-economic background exacerbates this occurrence; that is, young workers who come from a less privileged background or have family members who already work in the informal economy have a higher probability of ending up in a similar situation. Another factor, somewhat related to the previous one, is the lack of access to the financial system. Young people who are excluded from the formal financial system will also tend to have a higher propensity to be in informal employment. Lastly, skills mismatch between what firms seek and what young workers offer will also tend to worsen young people’s situation.
Building public policies to strengthen social protection for the informal youth.
The United Nations Framework for Cooperation for Sustainable Development in Ecuador 2019-2022, as well as the ILO’s 2020-2021 Action Plan for Ecuador, establish that in order to address informality, the Government must promote the development of public policies coordinated with local governments and with greater participation of workers' and employers' organizations.
In view of this, comprehensive social protection strategies to close the inequality gap and help young workers transition towards decent work are in need. Through the Joint Program, the UN’s support to the Government has become catalytic in the achievement the Sustainable Development Goals under the premise of Leaving No One Behind. To this end, it is vital that the National Government, civil society organizations and workers and employers' associations work together and participate in national dialogue spaces.
The expected results of the Social Protection JP aim at increasing young men and women’s access to better employment opportunities and dignified living conditions, as well as their inclusion in the social protection system, while promoting gender equality and the achievement of the Sustainable Development Goals.