The Challenge of Youth Employment in Present-Day Uruguay - 2010-2014

The global economy has been struggling through an international crisis over the past four years, and a sustained recovery of developed economies remains a distant prospect. The European Union faces pressing fiscal and debt problems, particularly in certain countries, which are seriously hampering economic growth there. The situation in the United States is relatively similar, with a slumping economy and high unemployment rate (Almonte and Fajardo, 2011). The situation for emerging economies offers a complete contrast, however, with high rates of growth being registered in recent years and good prospects for expansion over the short term (Mordecki et al. 2011). In the region both Argentina and Brazil are exhibiting sustained high GDP growth rates combined with very low unemployment. In the past few years, the Uruguayan economy has been growing at rates above the historical average (6 per cent in 2011), while achieving the lowest unemployment rate in its history (5.7 per cent in January 2012). This combines with an increase in real salaries (5.8 per cent of annual growth as of February 2012) and a reduction in poverty (13.7 per cent in 2011) and extreme poverty (0.5 per cent in 2011). This growth has been fuelled4 by an increase in both internal and external demand, the latter as a result of growth by emerging economies (including Argentina and Brazil) and the rising price of commodities, and the former thanks to rising household incomes and foreign direct investment (Mordecki et al. 2011). The most notable risks are related to the fact that Uruguay is still a small and vulnerable economy that needs to catch up in terms of international integration.