Reduced Prospects for Young Saudis

Last week, The New York Times reported that young people in Saudi Arabia are having a tough time finding jobs. The Saudi government has long been a major employer of its citizens but now is forced to spend less lavishly as the price of oil declines. I had a foretaste of this situation 15 years ago, when I was doing research in the Kingdom.

In 1999, I was engaged by King Fahd University of Petroleum and Minerals to develop a computer-based system for career assessment and information. Eight years before, Saudi Arabia had financed the first Gulf War to the tune of $50 billion. But the Kingdom was not recouping its investment, because the price of oil had been on a generally downward slope ever since the end of that war, and in the previous year the inflation-adjusted price had reached an all-time low. Students at the technology-oriented college paid no tuition and were actually receiving stipends. Therefore, the government was eager to find a way to get students to declare a major that they could complete reasonably fast rather than change majors several times and delay graduation.

I drew on my experience as one of the developers of the SIGI PLUS system at Educational Testing Service in writing my proposal for the system.  Like SIGI PLUS, the Career Oasis system would use work-related values as one of the ways students could identify potentially suitable occupations. But it seemed likely that the SIGI PLUS set of work-related values, which had worked well with American and Australian students, might not be a good fit in the Kingdom. So, as part of the development plans, I included on-site research into the values of Saudi students.

With a committee of faculty and staff, I worked out a set of values to test, based mostly on the content model of O*NET, the career information database developed for the U.S. Department of Labor. For these values, the O*NET database provided ratings for hundreds of occupations. But we decided to add a value that might be important to people growing up in the conservative Islamic culture of the Kingdom. After some discussion we defined the value as “not being in situations that break with norms, customs, or traditions,” and eventually we settled on the name “Conventionality.”

I had a very lively discussion with the committee about whether, in the Saudi context, the value “Conventionality” occupied a conceptual space different from the O*NET-derived “Moral Values.” The latter was defined by O*NET as “not being pressured to do things that go against your sense of right and wrong.” Contributing to the controversy was the fact that the only Arabic words we could settle on to translate “right” and “wrong” were the religious terms “halal” and “haram.” In the end, we decided to let my research clarify whether students perceived a difference, and in fact they did give different levels of support to these two values. On questionnaires that asked the students to weight the importance of the values, they gave Moral Values considerably higher weightings than Conventionality.

What is particularly interesting, however, in light of last week’s Times article, is what the students’ highest-weighted values said about their career ambitions. I surveyed two types of students: those in the orientation year at the (all-male) university, and the children of faculty and staff in the (all-male) high school within the university compound. Here are the top 10 values of the high school students:

Rank	Value	Mean Weight	Standard Deviation
1	Social Status	4.8	1.0
2	Achievement	4.7	1.0
3	Advancement	4.6	0.9
4	High Income	4.6	0.8
5	Moral Values	4.5	1.2
6	Security	4.5	1.0
7	Co-workers	4.2	1.2
8	Creativity	4.1	1.3
9	Social Service	4.1	1.5
10	Conventionality	4.1	1.6

And here are the top 10 of the orientation-year college students:

Rank	Value	Mean Weight	Standard Deviation
1	Moral Values	4.6	0.9
2	Achievement	4.6	0.8
3	Social Status	4.6	0.9
4	Security	4.5	0.9
5	Creativity	4.4	0.9
6	Advancement	4.4	1.1
7	High Income	4.3	1.0
8	On-the-job Training	4.0	1.0
8	Working Conditions	4.0	1.4
10	Conventionality	3.9	1.3

What I concluded from these responses was that—apart from the fairly high ranking of Creativity for both groups—the job that seemed to best fit their preferences was the well-paid, not-very-demanding job of a government functionary. “All they want is a diploma and a job in government,” comments a political science professor at King Saud University quoted in Saudi Arabia: Its People, Past, Religion, Fault Lines--and Future, by Karen Elliott House (Vintage, 2012).

At the time, I had doubts about how well the students’ values could be satisfied by the opportunities available to them. Now, 15 years after I completed my research, one of the main points of the Times article is that although “70 percent of working Saudis are employed by the government,” this kind of job is now much less available to young people than it has been in the past. “With oil revenues crashing and the numbers of young people reaching the work force growing by the day, those jobs have become harder to get as the government cuts costs and pushes Saudis toward the private sector, where job security and salaries are lower on average.”

This economic trend raises troubling questions about the future stability of the Kingdom. Seventy percent of the population is under age 30, and 250,000 reach working age each year. Some workplace conventions are changing–it is now easier for women to enter the work force—but at the same time, it is questionable whether young people have developed a better work ethic than the older generation. As a result, some private-sector employers have resisted the government’s pressure to hire Saudis rather than guest workers.

The social contract that underpins the Kingdom is that the rule of the royal family will not be questioned so long as they enforce a very conservative strain of Islam and keep the citizenry economically secure. The Islamic State now holds out an example of a different model for an Islamic society, and the Kingdom now is draining its deep reserves of cash to prop up the economy. If the values of young Saudis increasingly go unfulfilled, what will become of this key American ally?

Recession, Austerity, and a Clouded Crystal Ball

Every recession is caused by a different set of economic forces, and therefore every recession hurts a different set of workers. The collapse of the dot-com bubble at the beginning of the last decade resulted in many job cuts in computer occupations, whereas construction jobs mostly escaped mass layoffs. Conversely, when the housing bubble burst four years ago, construction jobs suffered much more than high-tech jobs. This is why identifying occupations with a lot of job security is a hazardous pursuit.

I was reminded of this hazard by two Yale economists who blogged today on The New York Times website. They start by asking, “Why is the recovery from this recession different from recoveries from past recessions?” The culprit, they find, is layoffs and reduced hiring by local governments: “Going back as long as the data have been collected (1955), with the one exception of the 1981 recession, local government employment continued to grow almost every month regardless of what the economy threw at it. But since the latest recession began, local government employment has fallen by 3 percent, and is still falling. In the equivalent period following the 1990 and 2001 recessions, local government employment grew 7.7 and 5.2 percent. Even following the 1981 recession, by this stage local government employment was up by 1.4 percent.” They note that state governments have also cut back on their workforces, but the effect is smaller because state government workforces were less than half the size of local government workforces to begin with.

The Yale economists estimate that if state and local governments were hiring as they did in the previous two recoveries, “they would have added 1.4 million to 1.9 million jobs and overall unemployment would be 7.0 to 7.3 percent instead of 8.2 percent.” The Yale economists use the term “hidden austerity program” to describe these job cuts by state and local governments, comparing them to the policies that European nations are pursuing—policies that are delaying Europe’s recovery and possibly propelling it toward a double-dip recession.

In the light of these comments, it’s interesting to note that last week the presidential candidate Mitt Romney said, “[President Obama] says we need more firemen, more policemen, more teachers. Did he not get the message in Wisconsin? American people did. It’s time for us to cut back on government and help the American people.” It’s difficult for me to understand how job cuts help the American people or why Europe is the model we should follow.

Politicians get to make policy (if they get elected); we who write about future job security in various careers have to deal with the consequences of those policies. In fairness to politicians, I should add that the cutbacks in state and local government jobs may not be entirely the work of Tea Party pressure on policy makers. The Yale economists speculate that the magnitude of the latest recession may have overwhelmed the ability of governments to save jobs as they have in the past through “creative accounting and shifting in capital expenditures.” Of course, the magnitude of this recession was also difficult to foresee.

When I wrote 150 Best Jobs for a Secure Future, I identified seven sectors of the economy that have a history of job security, and one of those was government. At the time, as the Yale economists point out, this seemed like a safe bet based on decades of economic history. Hindsight tells a different story.

Fortunately, most of the occupations with large public-sector workforces also find lots of employment in the private sector, so they remain promising career goals. For example, Registered Nurses, Financial Examiners, Computer Network Architects, and Management Analysts were among the top government-sector occupations that I recommended. They also have rosy outlooks in the private sector.