Diners return to a restaurant in Sydney, Australia. BAI XUEFEI/XINHUA
The long shadow cast over the global labor market by the coronavirus pandemic has made young people in Asia particularly vulnerable when it comes to job security.
In the coming months, or even the next one to two years, this group faces a gloomy employment outlook.
Since the start of the outbreak, one-in-six people in the 18-29 age group have stopped working, according to a report released on Aug 11 by the International Labor Organization, or ILO.
In addition, young workers in employment before the pandemic reported that their working hours have been cut by an average of 23 percent, which for two-in-five of them meant reduced income.
In June, an ILO analysis found the Asia-Pacific region accounted for about 80 percent of the global reduction in working hours in the first quarter of this year. Worldwide, the loss of working hours in the fourth quarter could be as high as 11.9 percent, or 240 million full-time jobs.
Ian Lee, Asia-Pacific CEO of global human resources service provider Adecco Group, said: “A lot of companies are facing many uncertainties. Across the Asia-Pacific region, there is some form of conservatism in terms of hiring people.”
The International Monetary Fund has forecast that only a small number of economies in Asia-Pacific will grow by about 1 percent this year, including China’s. Zhang Tao, IMF deputy managing director, said in July that most economies in the region are expected to contract, including South Korea’s by about 2 percent, India’s by 4.5 percent and Japan’s by 5.8 percent.
Amid the fallout from the pandemic, many companies have frozen recruitment, asked employees to take unpaid leave, or laid off workers to cut costs.
Lee said, “People are not so aggressive in terms of hiring, especially if you are a new graduate from university.”
In Australia, the jobless rate reached a 22-year high of 7.5 percent in July, up from 7.4 percent in June, marking the first time that more than 1 million Australians had been out of work, according to government data released on Aug 13. The unemployment rate for those in the 15-24 age group stood at 16.3 percent.
In South Korea, the employment rate declined for the fifth consecutive month in July, marking the longest fall since 2009, when it fell for eight months as a result of the global financial crisis. While the expanded jobless rate, which provides a more accurate indication of labor market conditions, reached 13.8 percent, the figure for those in the 15-29 age group was nearly double at 25.6 percent, according to Statistics Korea. Both figures are the highest since such data was first compiled in 2015.
In Japan, the job availability ratio in May stood at 1.20, down from 1.32 in April, the steepest month-to-month fall since January 1972, when a record 0.20 was recorded following the global oil crisis. The jobless rate stood at 2.8 percent in June, compared with 2.9 percent in May, but the figure for both months for the 15-24 and 25-34 age groups stood at 4 percent.
In China, recruitment in the second quarter fell by 9.89 percent, while the number of job seekers rose by 25.82 percent, according to online recruitment platform Zhaopin. In a report on the living conditions of Chinese white-collar workers, employees in their 20s reported more cases of salary reductions than senior members of staff.
“Getting rid of the youngest level of people in an organization is not going to cost much,” Lee said, explaining why such workers tend to be more vulnerable than other age groups in the current job market.
As many young employees are still at the learning stage, they are viewed as contributing less than senior colleagues, Lee said.
He added that examples of companies laying off recently recruited younger employees “can be seen almost everywhere right now. They get rid of the younger ones first.”
The sectors hardest-hit by the pandemic include retail and travel, Lee said, while healthcare, e-commerce and digitization-related businesses are still doing relatively well.
Production resumes at a clothing factory in Bangladesh. XINHUA
Felix Yip, associate director of the Centre for Human Resources Strategy and Development at Hong Kong Baptist University, said that in addition to full-time jobs, university graduates need to face the fact that the pandemic has drastically reduced internship opportunities.
Yip said this situation will persist for the next three to six months, and that economic recovery will take a long time. With businesses now tightly connected globally, easing pandemic controls in one country or region is not sufficient to restore the whole world to health, especially when the number of infections in countries such as the United States is still high, he said.
Many developing countries in Asia rely on doing business with developed nations, Yip said, adding that unlike China, not all nations in the region have sufficiently strong domestic consumption to boost their economies.
” (Young people) will have to wait,” he said, suggesting that instead of trying to secure full-time employment, graduates consider taking up casual work or short-term jobs to gain work experience.
Kashif Mansoor, a research scholar at the Centre for Development Studies in Trivandrum in the Indian state of Kerala, said events such as the Great Depression of 1929 and the 2008 global financial crisis exposed the vulnerability of young people in the labor market.
This group is also likely to be working part-time, seasonally, or in jobs with less security, Mansoor said, adding that many such employees have been affected in sectors ravaged by the pandemic.
Even before the outbreak, the unemployment rate among young people in India was 17.8 percent, compared with the overall rate of 6.1 percent, according to the Periodic Labor Force Survey 2017-18 undertaken by the country’s National Sample Survey Office.
In addition, people in the 15-29 age group comprise one-third of domestic migrants in India, Mansoor said, citing a World Bank report that estimated that nearly 40 million such migrants have been affected by the nationwide lockdown.
India, Asia’s third-largest economy, imposed the lockdown on March 25, and the country remains under partial confinement due to the rising number of COVID-19 cases. As of Aug 13, the number of infections from the disease stood at nearly 2.4 million, with more than 47,000 deaths.
The Indian government has taken measures to stimulate the economy and employment, including a special stimulus package worth $267 billion, or 10 percent of the country’s GDP, and other employment subsidies.
“Many of the government’s proposals are credit-focused or aimed at easing liquidity concerns for many affected sectors,” Mansoor said. “The government needs to boost demand in the economy. This can be done by providing cash and other forms of support to the poorest families … and by restarting the completely-stalled economy.”
Lee, from Adecco, said many countries in Asia have launched job support programs for younger workers.
“China is subsidizing companies to basically improve the recruitment of younger people through employment stabilization subsidies,” he said. “In Singapore, if a company is employing fresh graduates from college or university, it can (apply for subsidies) of up to 75 percent of their salary for up to six months.”
Some governments are providing training for the jobless and for younger people in work.
However, improving the youth employment rate is not just a task for governments, Lee said. Dealing with the situation in the long term will require joint efforts from governments, the private sector and schools, he noted.
“Just think how long it is going to take to make the entire population immune from this infection (with vaccines) … We probably need to be thinking two to three years before things can potentially get back to normal,” Lee said.
He expects more young people to lose their jobs in Asia in the next one to two years. “The situation is going to get worse before it gets better,” he added.
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