Bloomberg has reported on how Asia’s fast-growing economies for decades have offered millions of young people the chance to do better than their parents. However, this path to upward mobility is now at risk as youth unemployment soars in a region home to a majority of the world’s 15- to 24-year-olds.
These young people (who are just at the start of their working lives) are losing jobs at a faster rate than older generations. This is due to almost half being clustered in the four economic sectors hurt most by the COVID pandemic, including wholesale and retail trade, manufacturing, business services and accommodations and food service.
According to the World Bank, the COVID shock is creating a class of “new poor” across East Asia and the Pacific with an additional 38 million people expected to be living in poverty. Bloomberg also quoted another expert who warned that the crisis will strain relations with older generations, put young people’s mental health at risk and is shaping up to be worse than any previous jobs crisis.
To potentially make matters worst, the labor market that emerges from the COVID crisis will likely mark an acceleration toward the gig economy. However, many won’t thrive in such an economy where informal work with no contracts is the norm and headline unemployment rates capture only some of the damage.
Bloomberg did note that some sectors like technology are still hunting for young people – offering a glimmer of hope for the young generation. Yet highly specialized skills are crucial in such sectors with one tech executive being quoted as saying:
“The IT industry is booming. Young workers, even university graduates, may earn less for a decade or even longer.”