What about us? Youth (un)employment in times of COVID-19

The youth workforce is particularly vulnerable to the economic crisis caused by the Coronavirus outbreak. Here is what we can do to provide decent and sustainable jobs for young adults

By Samia Kassid

The COVID-19 crisis has turned from a global health crisis into a severe economic crisis. The policy responses taken to fight the pandemic have resulted in economic shutdown, leaving millions out of work, with young people, women and less-skilled people worst affected.

Today there are 1.8 billion people in the world between the ages of 15 and 35 — a quarter of the global population. This is largest generation of youth and young people the world has ever known. Young adults are the backbone of every society, providing energy, ideas and investment potential.

The global recession is expected to result in the loss of five to 25 million jobs, and it will be young adults and young people that are most vulnerable to unemployment. Across the world, young working people will be the first to lose their jobs, or will have to resort to lower quality, less paid, insecure or unsafe jobs.

Youth workforce vulnerability

Young workers: According to the International Labour Organisation, just under half a billion (429 million) young workers worldwide are employed; three-quarters in informal work[1]; one quarter in formal work. And of these young workers, 126 million already live in extreme (13%) or in moderate poverty (17%). Rates of extreme working poverty and informal work status are especially high in sub-Saharan Africa, the Arab States, and Southern Asia.

Young students: Over half a billion (510 million) young adults and young people are in education.

Young NEET: A quarter of a billion (267 million) young adults are officially classified as youth NEET. These young adults are not in employment, education or training. Before COVID-19, one in five young adults were NEET, two-thirds of them (181 million) young women. Youth NEETs are not gaining experience in the labour market, receiving income from work, nor developing their skills through formal education.

The Organisation for Economic Cooperation and Development estimates that the high number of Youth NEETs results in economic losses of USD 360 to 605 billion per year for OECD countries equivalent to 0.9% to 1.5% of Gross Domestic Product.

Youth unemployment: Global youth unemployment rate is three times higher than for adults (OECD, 2018 data). At 13.6 %, with considerable regional variation, 9% in Northern America and sub-Saharan Africa to 30% in Northern Africa, these young adults and other young adults will be hardest hit by the current global recession. And the young women that make up over half of the youth unemployed, will find it harder than ever to close the gender gap.

Due to the Covid-19 crises, we are speeding up digitalisation. Remote work as well as online shopping, artificial intelligence and automatisation will experience a boom.

Learning from past crisis

The youth labour market is highly sensitive to economic cycles and in times of economic crisis youth employment is hit more strongly by economic shocks than adult employment. Young workers are often “first out”. During the 2008 crisis, one in ten jobs in Europe held by workers under 30 were lost. In Spain, Greece and Ireland, half of working young people lost their jobs between 2007 and 2014.

Twelve years after that recession and despite economic recovery across the OECD, youth employment rate stagnated since 2010 and never recovered to pre-2008 crisis levels. Economic crises force young people into long-term unemployment, inactivity and discouragement which affects their long-term career prospects. What hope now for our young citizens?

COVID-19 crisis is reshaping the world of work and speeding the digital transformation

The impacts of the pandemic on youth labour market outcomes will be severe in developed, emerging and developing countries. Economies with high rates of informal employment are particularly vulnerable to shocks. The lockdowns and the spread of the virus mean millions of young people lack social protection, income benefit in case of sickness, and are at risk through inadequate access to universal health care.

Even though all economic sectors are affected by the pandemic, labour-intensive sectors with millions of low-paid and low-skilled young workers have been most dramatically affected. Young people in developing and developed countries make up the majority of workers in the wholesale and retail trade, accommodation, and food services sectors, and these have been hit hardest.

The weak economic situation in many countries pre-crisis is expected to deteriorate further, leaving tens of thousands of young people as NEETs in the short term.

Besides the increase in lay-offs and upsurge in temporary contracts, for those in work, their working conditions are likely to get worse, leaving many with precarious earnings or no income at all. The International Labour Organisation estimates a decline in working hours by 6.7% for all full-time workers globally; again, the under-30s and young women will be worst hit.

Covid-19 is forcing economies and companies to speed their digital transformation to meet the sudden boom in home working and online shopping. The crisis is also driving expansion of artificial intelligence and automatisation. With new online tools like video conferences now in wide-use, global business trips are set to decline post-crisis, with a significant knock on effect on jobs in administrative support, events, travel and transport. An increase in temporary and part-time jobs is forecast, with little stability and benefits as companies become reluctant to return to full-time employment models.

Sustainable future socio-economic progress with flourishing economies and societies need a vibrant, empowered and employed youth at their heart.

Decent and sustainable Youth employment must be at the forefront of global policy action

The rise of new technologies, globalisation, rapid changes in the world of work, the 2008 economic crisis, automatisation, and now COVID-19 have disrupted labour markets across the world in a seismic way for youth and their chances of decent, long term and meaningful employment.

Many jobs will disappear and the new jobs that are created will leave many young people behind. Those with lower skills will join the swelling numbers of Youth NEET or will find themselves in insecure jobs, with lower paid working conditions.

The increasing demand for digital skills is not only a prerequisite to enter the information technology sector; these skills are also needed in non-technical roles, such as customer services, health and social care. A closer interlinkage between the education and labour sectors becomes more important.

The economic shutdown provides a significant opportunity to redesign economies to fight climate change and environmental degradation and instead invest in decarbonised, sustainable and green economies. Some cities like Los Angeles (USA), regions (Scotland), and the EU have made progress towards implementing a Green New Deal, putting the environmental and clean tech jobs at the heart of the recovery.

Investing in young people means providing decent and sustainable jobs for young adults. Sustainable future socio-economic progress with flourishing economies and societies need a vibrant, empowered and employed youth at their heart.

The World Future Council shares good global policies for youth employment

At the World Future Council, we have investigated and recognised laws and policies from around the world that foster enabling work environments for youth, and help young adults adapt to market requirements. In 2019 we detailed a number of outstanding policies:

Scotland’s Developing the Young Workforce (DYW) tackles youth unemployment and improves the skills of young people to help them enter the labour market, by bringing together educators, employers, civil society, youth organisations, and local authorities to reshape the education curriculum and expand the apprenticeship programme.

Rwanda’s YouthConnekt connects youth to private sector and government employment and entrepreneurship opportunities, strengthens their civic engagement and leadership and has reached thousands of young Rwandans between 16 and 34 years old, raising awareness on employment, entrepreneurship and ICT. The policy serves as a model across Africa and supports the pan African initiative to create 10 million jobs for African young people.

South Africa’s Expanded Public Works Programmedemonstrates successfully how a labour market policy can provide poverty and income relief through temporary work for the unemployed. Temporary labour-intensive employment opportunities are created in public infrastructure and services of high social, cultural, and environmental value. Several initiatives on training aim to create 5.6 million jobs for the South African (youth) workforce by 2024.

COVID-19 has shown us just how fragile and globalised our economies and societies are. Poverty and income inequality will severely limit opportunities for youth employment in the post-COVID world. Investing in young people for decent and sustainable jobs must be put at the forefront of policy action so we can build resilient nations with equal, inclusive and sustainable economies and societies that respect nature and care for future generations.

[1]Workers in the informal economy are engaged in economic activities, enterprises, jobs, that are not regulated, well-paid, valued or protected by the state and society.