He is a 28-year-old Egyptian with a degree in sociology. He graduated six years ago and has since had three jobs as a waiter in various Cairo coffee shops and restaurants. He wants to marry but can’t convince his sweetheart’s parents he is ready, given his employment situation. He lives with his parents, both government employees who will soon retire with government pensions. He, on the other hand, can only dream of a job that would guarantee him a pension.
Ragui Assaad is a professor at the Humphrey School of Public Affairs at the University of Minnesota.
Millions of educated youth like this find themselves shut out of the middle class because of an inability to convert their education into the kind of decent job their parents found a generation ago. Even as access to education has expanded dramatically in the region, the quality of employment for educated workers has deteriorated markedly. I’d argue that the gap between what these young people expected for their education and what they have achieved is the main source of the anger and frustration driving the Arab uprisings.
A generation ago, a young person with a college degree was virtually guaranteed a place in the middle class, mostly by means of a public sector job. An Egyptian college graduate entering the labor force in 1980 had a 70-percent chance of landing a job in the public sector. That chance had fallen to 35 percent by 2012. The decline in public sector employment opportunities was only partly made up by the growth of decent jobs in the private sector. Again, in Egypt, a young college graduate in 1980 had a mere 15-percent chance of getting a formal job in the private sector. That chance had gone up to only 25 percent in 2012.
A formal job is one that complies with labor laws and regulations and provides a modicum of social protection. The remaining 40 percent who failed to obtain either public or private formal jobs in 2012 were relegated to the informal economy, with few opportunities to move to a decent job thereafter. The job prospects of high school graduates, who now make up nearly 40 percent of Egyptian youth, have deteriorated even more than those of college graduates over the past 30 years.
Based on the experience of their parents’ generation, youth who obtain high school and college degrees in the Middle East today have come to expect that their education will set them on a path to a middle-class existence. But not only have public sector jobs become very scarce, the few formal jobs that are available in the private sector appear to go to the well connected and privileged.
The success of college and even high school graduates to obtain decent jobs a generation ago was not a testament to the dynamism of the region’s economies at that time. It resulted instead from an implicit contract struck between authoritarian rulers and their middle-class citizens in the post-independence era—an arrangement that has come to be known in political science as the authoritarian bargain. The terms of this contract are that the rulers guarantee access to subsidized goods and services and to secure lifetime jobs in the public sector for those who achieve a minimum level of education, in return for acquiescence to authoritarian rule. The rulers’ side of the bargain was financed by the funds accruing to them from oil and gas resources or from aid from oil-rich countries and other patrons.
Bulging youth populations in the region, coupled with rapidly rising educational attainment, and falling oil prices in the 1980s and ’90s, have made this authoritarian bargain increasingly untenable. Authoritarian rulers began to delay and then deny educated newcomers the opportunity to obtain the highly prized public sector jobs without increasing opportunities for political participation. The situation in the Middle East contrasts sharply with that of Central and Eastern Europe, which also experienced a restructuring away from the public sector. While the reforms in those regions severely taxed older workers, who experienced wholesale layoffs from secure public sector jobs, they provided valuable new opportunities for young workers in the emerging private sectors. In contrast, the authoritarian governments of the Middle East strove to protect insiders and old timers by preserving their jobs and entitlements and shifted the entire burden of adjustment onto young people.
At the same time, their purported shift to market-based economies failed to create dynamic, globally competitive private sectors. What emerged instead were weak private sectors, dependent on state largesse and dominated by cronies. The failure of these private sectors to assume the mantle of job creation meant that the growing number of educated new entrants who could no longer be accommodated in the public sector were increasingly relegated to precarious jobs in the informal economy.
It is therefore not surprising that young people in the region today are increasingly skeptical of market-led, Western-oriented economies. Many of them perceive their future welfare as tied instead to the continued expansion of the state sector and the good jobs it engenders. While such a state-centric vision of development could have been feasible in a world of high oil prices and abundant oil resources, it appears to be increasingly far-fetched in much of today’s Middle East—and a recipe for continued unrest.
For the Future of Work, a special project from the Center for Advanced Study in the Behavioral Sciences at Stanford University, business and labor leaders, social scientists, technology visionaries, activists, and journalists weigh in on the most consequential changes in the workplace, and what anxieties and possibilities they might produce.