people.
I
Disruptive Change
Millions of people lost their jobs with the development of steam power. Their positions were considered permanent, lifelong employment in agriculture and traditional sectors of economies. Then the industrial revolution began. People were replaced by machines. The reactions in many societies were negative and sometimes violent with the burning of factories and destruction of machinery. The established order was being disrupted, but change continued, and countries attempting to control change fell behind.
During the 1980s, Honduras and other countries from Latin America, the Caribbean, Asia, and Africa entered the apparel industry to compete in the world market and disrupted the international market for clothing. This resulted in new employment opportunities in Honduras, but factories were closed in the United States and Europe and a lot of people lost their jobs. Honduras now competes with South America, Europe, Africa, Asia, and the U.S. in apparel markets based on international standards. Honduras is one of the top ten coffee producers in the world and competes with producers from Central America, South America, Asia, and Africa with coffee prices affected by the weather, production levels and the quality of coffee from around the world.
Disruptive changes contributed to economic growth, reduced costs for consumer goods, and provided new employment opportunities, but people had to adapt to new realities and learn new skills. Today, the world is changing more rapidly with the digital age. Local businesses compete with business chains, mega-stores, regional and international distributors, and more people are shopping on the internet in an increasingly competitive world. Small businesses and industries with low volume sales must become more innovative and customer focused to survive.
Automated industries and businesses resulted in reductions in employment initially, but new opportunities became available as services and businesses adapted to change. New opportunities for employment are available in industry, agriculture, aquaculture, science, info-technology, robotics and mechatronics. Sales, services and professions also provide new opportunities when people become more innovative for reaching more customers, but people need to be willing to continue learning throughout their lives and young people must be prepared for competing in the world economy.
Education and Employment
In 1980, a little more than half of the children from Honduras were graduating from primary school. Completing the 4th to the 6th grade with basic reading, writing and math skills was sufficient for many people to find employment. Primary school graduates had more options for employment and could continue their studies in secondary education or vocational training programs.
The demand for high school and vocational training graduates was increasing. The Director of Technical Education at the Ministry of Education reported that all of the graduates from the Ministry of Education´s technical high schools received offers for employment in the year 1982.¹ The National Technical Training Institute (Instituto Nacional de Formación Profesional: INFOP), the Advisory Center for Human Resource Development (Centro Asesor para el Desarrollo de los Recursos Humanos de Honduras: CADERH), and other sources recorded similar trends.² Job placement rates of 85% to 95% were common and employers were waiting for more graduates in areas of high demand.
By the year 2010 only a minority of the graduates from technical high schools (41%) and vocational training centers (43%) were employed, and many did not find employment in the area of their studies. Interviews with graduates, however, revealed that all of the graduates working in other areas or continuing their studies wanted to find work in areas related to their technical preparation. Table 1 summarizes job placement rates for graduates of technical training programs from 2010 to 2017.
Table 1
Employment of Graduates from Technical High Schools and Vocational Training Centers
*Self-employed included with total employment.
**Vocational training centers associated with CADERH and INFOP providing training in traditional areas.
***Training programs in new areas with more emphasis on self-employment.
Sources: Rolando Sierra Fonseca and Ned Van Steenwyk, La Oferta y Demanda de la Educación Técnica y la Formación Profesional en Honduras (GIZ, 2011) for 2010-2011; Centro Asesor para el Desarrollo de los Recursos Humanos de Honduras (CADERH) for 2014-2017.
Table 1 shows how the job market for graduates from technical high schools and training programs changed. Job placement rates of 85% to 95% for graduates during the 1970s to 1990s dropped to only a minority finding employment by the year 2010, with only 16% of the high school graduates and 25% from vocational training programs finding work in the technical area for which they were trained.³ Changes in technologies, production systems, and sales strategies were disruptive. Employers struggled to keep up and remain competitive, a growing young work-force was looking for employment, but many young people were not prepared for changes in the job market.
From 2014 to 2017, the German Development Agency (GIZ) worked with INFOP, the training centers associated with CADERH, and other programs to introduce new areas of training with more emphasis on preparing people for self-employment.⁴ This helped boost employment for graduates, but job placement rates for vocational and technical education graduates are much lower than previous decades, and the high percentage of graduates from 2014 to 2017 who are not working or studying (40%) is a complicated problem that needs attention (Table 1).
Population and Employment
Population changes are slow and annual differences might not seem very important. Significant changes in the distribution of populations by age groups are observed over decades and can become disruptive for labor markets and economies. Table 2 summarizes the growth of the population and employment in Honduras from 1995 to 2017.
Table 2
Population and Employment: 1995-2017
Notes: The percentage of the Economically Active Population (EAP) and people employed are based on the total population; percentages for unemployment and underemployment are in relation to the EAP.
*The EAP is the population over 10 years of age employed or seeking employment.
**Underemployment includes visible and invisible underemployment. The visibly underemployed are working less than 36 hours a week and would like to work more. The invisible underemployed are working 36 hours a week or more and have incomes below the minimum wage.
Sources: Total population and other data for the year 1995 from the Dirección General de Estadística y Censos del Ministerio de Planificación, Coordinación y Presupuesto; 1999 from the Dirección General de Estadística y Censos de la Secretaría de Industria y Comercio; and 2001-2017 from the Instituto Nacional de Estadística (INE), Encuestas Permanentes de Hogares de Propósitos Múltiples.
Table 2 shows the economically active population (EAP) increasing by 118% from 1995 to 2017, nearly twice as fast as the population (63%). This should be a positive trend, but underemployment increased by 339% and unemployment by 249% from 1995 to 2017. Increasing numbers of young people reaching working age have been associated with accelerated economic growth for some countries, but the benefits of a growing young work-force are lost and a large young work-force becomes a problem when there are not enough opportunities for employment.
Little attention was given to the need for better employment opportunities in Honduras when the young working age population began growing more rapidly. In the year 2017, there were more than 700,000 young people 19 to 24 years of age in the EAP or dropped out of the labor market after losing hope of finding employment. They have more years of education than their parents, but have the highest rates of unemployment and underemployment; more than 500,000 (72%) are unemployed, underemployed, or labor market dropouts. Employment opportunities did not increase at the rate needed to reduce unemployment and underemployment from 1995 to 2017, resulting in 62% of the EAP (2.5 million people) unemployed, underemployed, or dropping out of the labor market after losing hope of finding employment in 2017.⁵
Population Projections
Table 3 summarizes population projections from 2015 to 2050. The most important changes will be the growth of the working age population 15 to 64 years of age by nearly 3.5 million and the older population by 1.2 million. The young population of 0-14 years of age will be increasing by only 92,000 children from 2015 to 2050, for an average increase of 2,630 annually, with a need for about 100 additional teachers a year for primary schools. Another important change is with the dependency rate. The dependency rate is the relationship of the working age population (15 to 64 years of age) with dependents (0-14 and 65+). Table 3 shows the dependency rate falling from 65% in the year 2015 to 55% in 2025, and reaching 52% from 2040 to 2045 before it begins rising again by 2050.
Table 3
Population Projections: 2015-2050
* The dependency rate is the relationship of the working age population with the dependent population of 0-14 and 65+ years of age: (population 0 to 14 and 65 and older / working age population of 15 to 64 years of age = dependency rate).
**Average number of children per woman.
Sources: INE, Comisión Económica para América Latina y el Caribe (CEPAL), Centro Latinoamericano y Caribeño de Demografía (CELADE), Población 2015-2050; and United Nations, World Population Prospects: 2015 and 2017 Revisions.
Table 3 summarizes changes in the distribution of the population affecting the education system, labor market, and economy. The population is projected to increase by about 56% from 2015 to 2050, but the most significant changes in the distribution of the population will not be with increases in children. The school age population will be increasing by only 3% during 35 years, with an increase of less than one tenth of a percentage point (0.09%) a year.
The big change will be with the working age population increasing by about 3.5 million people and the older population by 1.2 million. The projections for the year 2100 are also interesting with a total population of about 12 million people, children 0-14 will represent only 14% of the population, as compared to 40% at the beginning of the century, 34% in 2015, 29% by 2025, and 23% for 2050; and people 60 years of age and older will account for 37% of the population by the end of the century.⁶
The increasing demand for employment is not a recent trend, nor is it only associated with more young people entering the labor market over a short period of time. From 1995 to 1999, for example, the EAP 30 years of age and younger was increasing rapidly. About 235,000 young men and women entered the EAP from 1995 to 1999, but the EAP 31 years of age and older also increased by a similar number, and this will continue with more people of all ages seeking employment.
