70% of young people in Latin America will work in the service sector by 2030

By 2030, seven out of 10 young Latin Americans are expected to be working in the services sector. This shift represents an increase of over 10% compared to current figures, signaling a trend that will be a severe blow to agricultural and manufacturing sectors. This transformation is driven by technological, demographic, and environmental factors, according to a study by the Economic Commission for Latin America and the Caribbean (ECLAC) and Ayuda en Acción, released in late November. The report, titled Prospective Study of Youth Employment in Latin America: Education and Training for Work as a Key Axis, suggests that while this sector shift could provide short-term employment opportunities, in the medium term, without public policies, there could be increased job insecurity and even greater overcrowding in cities. In five years, only one in 10 young people will be working in rural areas, according to the report.

The study paints a very unbalanced picture. In 16 countries across the region, more than 1.2 million young people will leave the agriculture sector, nearly 640,000 will depart from manufacturing, and more than 1.8 million will enter the service sector, which is characterized by low qualifications and often temporary employment. Andrés Espejo, consultant for the social development division of ECLAC, notes that these figures could grow due to intensified internal migration driven by climate change and shifting migration patterns within the region. Climate disasters such as hurricanes, earthquakes, and rising sea levels are increasingly displacing people from vulnerable areas.

“It is a concern that has been around for more than 50 years,” he says via video call. “Young people are increasingly migrating and not returning to their territories. Although the states are concerned, they are not moving as fast as the problem. The cities are going to become much more overcrowded.” In 2001, young people in agriculture accounted for around 16% of the workforce. Today, that figure is less than 10%, and it is expected to drop further to 8.2%, according to Espejo’s calculations. “For them to return or not leave in the first place, there needs to be an attractive offer. And there isn’t,” he adds.

This concern is shared by Julieth Sevillano, a 21-year-old forestry engineer from Tumaco, in southwestern Colombia. After graduating, Sevillano chose to stay in her community to start a cocoa farming project. However, she has witnessed many colleagues and friends leave rural areas. “Sadly, it is very evident that the differences in finding work here and in the city are very clear,” she admits. Despite this, she remains hopeful that her efforts will eventually pay off. “This sector is highly undervalued, but it is the only one that guarantees independence and food sovereignty,” she says. “Agriculture is the future of the world, but my generation is turning its back on it because they believe it doesn’t make money.”

Espejo insists that what could truly make the future job market precarious for young people is not necessarily the service sector, but the lack of public policies to adapt to this new reality. “Tourism, for instance, doesn’t inherently lead to precarious work. It requires few credentials to enter, which is why it is expanding. But what is precarious is the informality of those surviving off tourism, such as street vendors, rather than those employed in hotels.”

Precariousness is a long-standing issue for young people in the region. According to 2022 data, more than 20% of workers aged 15 to 29 earn wages below the poverty line, while 37% receive salaries lower than the national minimum wage. This situation is a significant concern for Matías Figueroa, director of European programs and knowledge management at Ayuda en Acción.

“This shift in the model could exacerbate inequality in the region,” he explains. “There are already many outstanding issues in Latin America. We need to start looking at rural areas from an inclusive perspective and establish digital inclusion once and for all. This is a transcendent factor even in accessing remote opportunities that would allow people to stay in their territories, as well as access to broader educational opportunities.”

Figueroa suggests that one way to prevent cities from becoming over-strained is by strengthening and ensuring basic services in rural areas, such as healthcare and transportation. “If rural areas had basic services, people would think twice before leaving,” he says.

The gap becomes even more pronounced when looking at the regional map. Half of young workers in Latin America and the Caribbean are employed informally, a figure that rises to around 75% in rural areas. In this region, one in four young people between the ages of 18 and 24 neither studies nor works. Figueroa points out that universal policies must be “sensitive to differences.” “There is no single type of youth; you cannot govern for a homogeneous or common youth,” he insists. For Figueroa, public policies are now facing a challenge they have never encountered before: dealing with illicit economies. “That’s where young people who are not integrated into society end up when the state excludes them... We need to think seriously about how to avoid this other exodus.”

To tackle these challenges, Espejo and Figueroa are calling on governments to focus on five key areas: formalizing youth employment, creating quality jobs in technology and sustainable energy, reducing gender disparities, strengthening labor information systems, and investing in education and training. “Investing in youth is not only the most socially just thing to do, it is also the smartest thing for the future of the region,” Espejo says. “It’s essential that youth-focused policies include the participation of young people in decision-making and in the formulation of policies that directly affect them.”

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