Recent graduates hit hardest by persistent unemployment

For the thousands of young men and women who filled Tahrir Square nearly two years ago, youth unemployment was a huge issue. For many, their main demand was simple: an economy that would employ them.

But throughout the transition period, recent graduates have had an even more difficult time finding work. With an economy in limbo, a constitution yet to be drafted and a government fiscally on the ropes, the young and educated are facing a bleaker economic landscape than many ever imagined.
Youth unemployment in the country has worsened over the past decade. Recent figures from the Central Agency for Public Mobilization and Statistics indicate that 15 to 29-year-olds make up 77.5 percent of the unemployed, though they only account for 46 percent of the adult population.
The political turmoil of the past months has only made a bad problem worse. In 2011, the unemployment rate of youth aged 15 to 24 jumped by 20 percent, according to CAPMAS.
Young men were hit the hardest, with a 53 percent rise in one year only. And this year’s figures will likely only show the trend continuing: CAPMAS recently announced a 0.8 percent increase in the unemployment rate in the second quarter of 2012.
“The situation is really not helpful,” says Samy, a 24-year-old pharmacy school graduate.
Even with a diploma from a private university, he says he is far from well-off.
Unemployment is particularly prominent among educated people. People with some university background represent 32 percent of the unemployed, according to CAPMAS.
Samy had two dreams as a university freshman: He would either open his own pharmacy or work as a sales representative in an international pharmaceutical company. Today, these dreams seem very far away.
“You need connections to have an interview in an international company,” he says. “A friend of mine got a job at [GlaxoSmithKline] just because he knew somebody there.”
Opening a pharmacy is even more complicated.
“Paperwork takes one year to be completed, and the state forces you to pay the rent during that span without allowing you to have any activity,” he says.
It would be an enormous investment for a recent graduate with no personal savings.
“I cannot do it alone,” says Samy, who is hoping he can find a friend to share the costs and get financial support from his family.
But Samy also realizes his relative fortune, and is grateful for his pharmacy job with an LE800 monthly salary.
“At least I can find a job in my field,” he says.
Mohamed, 22, has not been so lucky. He graduated, having studied tourism, one year ago.
Since then, he has not been able to find any jobs in tourism, as the sector struggles to recover from the consequences of the political turmoil.
Coming from a low-middle income family that invested in his studies, he says he is in dire need of a job with a decent salary to help his family put food on the table.
In need of any sort of paycheck, Mohamed is looking for jobs in the call center industry.
“I would prefer to work in tourism, but call centers pay well,” he says.
He says the four-hour commute from his home in 10th of Ramadan City to the call center park in Maadi is no issue, if the job pays.
He has applied to several call center companies, but has not been accepted. He says he’s been told his English needs improvement.
Estimates put the number of graduates fighting for work at 700,000, with about 200,000 jobs available every year. As the job market shrinks, the number of graduates entering the job market has only increased.
According to CAPMAS, there were 37 percent more university graduates in 2010/11 than in 2001/02, making this generation the most educated in the country’s history.
This trend reflects the demographic boom that happened in Egypt in the 1990s, in addition to a rise in educational opportunities. According to the United Nations Development Programme, an Egyptian born in 1985 had more than 10 years of education, while an Egyptian born in 1950 had only five.
The government created six new state universities in the last decade alone, up to 18 from 12.
But while the government has been able to fulfill, to a degree, the Nasser-era dream of opening higher education to broad segments of society, it has not been able to match those graduates with well-paying jobs.
Historically, public jobs were the prime destination for the majority of young graduates. But this trend has dramatically changed in the last decade. According to a 2009 survey led by the Egyptian Central Agency for Organization and Administration, Egyptians aged 20 to 35 represented only 18 percent of all bureaucracy staff, while representing 48 percent of the working population.
The Egypt Labor Panel Survey of 2006, carried out by the Economic Research Forum and CAPMAS, found that about 20 percent of men and 50 percent of women born in 1978 could expect their first job to be a government one. Only 5 percent of males and 25 percent of females born in 1986 could expect the same.
This would not have posed a problem had the formal private sector made up for the government cutbacks. But it did not. According to the same survey, the proportion of the formal private sector hiring declined as well.
Instead, the economy saw an increase in private informal jobs offering a regular wage, unpaid family work and self-employment.
Thus, the informal sector has become the prime employer of young Egyptians.
Both Samy and Mohamed, a 24-year-old taxi driver, work in the informal sector. Mohamed, also a tourism graduate, could not find a job in his field of study after graduating.
He says he had no other choice but to get behind the wheel of a taxi.
Faced with such bitter prospects, many university students are anxious about their entry into the labor market.
Tarek, 23, is in his last year of business studies at the Modern Sciences and Arts University. He says his university has not supported him in finding a job.
“They do nothing to help us,” he says. “They recently created a service to help freshmen find internships, but there is nobody who can help us write our resumes or prepare for interviews.”
Maha Guindi is the director of career advising and placement services at the American University in Cairo, the only university in the country to offer career services.
“Many young people in this country are well-educated, but they lack advice and employability skills. They need to be empowered in order to make the right choice for their future,” says Guindi.
Founded 20 years ago, the center offers self-assessment tests, internship programs, professional conferences, job fairs, resume and interview workshops, and an online job offers database. The university is working with other universities to establish their own centers.
Ain Shams University hopes to have its own career center by 2015.
“In order to reduce unemployment, universities need to better match the industry needs,” Guindi says.
Improving public higher education quality, though, is unlikely to happen as the government cuts back education spending to deal with a growing budget deficit. As subsidies and low tax revenues weigh on the budget, education spending has dropped from 17 percent of budget expenses in 2001/02 to 10.8 percent in 2011/12, according to the Finance Ministry and CAPMAS.
The Global Competitiveness Report of 2012/13 put Egypt in 109th place out of 144 countries in higher education and training, and 142nd place in labor market efficiency. To resolve this issue, UNDP has suggested that the government establish a national employment strategy, pairing universities with public, private and civil society actors.
But in the meantime, many recent graduates have decided they might fare better outside of Egypt.
Tarek has decided he wants to finish his training abroad, but he’s still looking for funds.
Samy also wants to leave Egypt. His only way to save enough to open his own pharmacy is to work for some years in another country. Canada, he says, seems like a good option.

This piece was originally published in Egypt Independent's weekly print edition.

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