Youth unemployment to double this year

Youth unemployment in Bangladesh may more than double in 2020 if the country takes six months to contain the coronavirus pandemic, which has caused economic output and demand to fall drastically, said a new report.

In 2019, the youth unemployment rate was 11.9 per cent and it is expected to go up to 20.5 per cent this year in the case of a three-month short containment scenario and 24.8 per cent in the case of a six-month-long containment, said the report titled 'Tackling the Covid-19 youth employment crisis in Asia and the Pacific'. 

The report, which was jointly published by the Asian Development Bank and the International Labour Organisation, is based on two scenarios:  one in which the spread of the virus is contained within three months and the other within six months.

The jobs losses are for the whole of 2020 and are full-time equivalents.

The report said 11.17 lakh youth would lose jobs in Bangladesh in case of a short containment. The number would go up to 16.75 lakh if the country takes six months to curb the deadly virus. 

Agriculture, retail trade, hotels and restaurants, inland transport, other services, construction and textiles sectors would account for 75.9 per cent of the job losses in Bangladesh.

In South Asia, countries like Pakistan and Nepal would also see their youth unemployment double because of the pandemic.

In 2019, Pakistan had a youth unemployment rate of 8.9 per cent, which is projected to go up to 21.5 per cent in case a long containment.

Similarly, youth unemployment in Nepal would go up to 4.8 per cent in case of a short containment and 6.1 per cent in case of a long containment, from 2.3 per cent in 2019.

India's youth unemployment rate would jump to 32.5 per cent in case of a long containment, from 23.3 per cent a year ago.

Sri Lanka's youth unemployment would climb to 32.5 per cent and 37.5 per cent in short and long containment scenarios respectively, up from 21.1 per cent in 2019.

Youth unemployment was high relative to the overall unemployment even before the pandemic, said Zahid Hussain, a former lead economist of the World Bank Dhaka office.

The widespread and deep disruption caused by the pandemic to economic activities in manufacturing and services has exacerbated the pre-existing condition.

The pandemic also disrupted education, which, in turn, affected the future labour market entry and employment prospects of the youth.

The already high number of youths not in employment, education and training must also have increased significantly, he said. 

"Activity levels are recovering with the reopening, but employment and income recovery have so far been slow and fragile."

Sectors such as banking and fast-moving consumer goods that used to provide quality jobs to educated youth are struggling because of the recession despite the reopening. 

"Productivity and confidence will remain suppressed as long as the fear of contracting the virus remains alive and well in the minds of consumers and investors.  This is the biggest barrier to restoring youth employment to the pre-coronavirus levels."

The government has taken a few initiatives to support self-employment of youth by setting up a start-up fund, but it is allegedly not implementing well, according to the economist.

COVID-19 has created a demand for specific types of skills in health, pharmaceuticals, hygiene products and e-commerce.  But there is a skill mismatch. 

"The unemployed educated youth lack these skills. The government can help these youth reskill themselves through its technical training centres all over the country," Hussain said, adding that the government must do everything it possibly can to help the unemployed youth help themselves. 

The ILO-ADB said as containment measures have continued to be in force after three months in many countries, despite some relaxation, the short containment results are best viewed as a lower bound of job losses.

They may be most realistic for countries that have avoided a serious outbreak such as Cambodia, Thailand and Vietnam.

Bangladesh enforced a strict lockdown to stop the spread of the virus between 26 March and 30 May.

It relaxed the restrictions in June to save livelihoods and the economy although the virus has not come under control yet. Rather, the caseload is expanding at a constant rate every day.

The report said the coronavirus disease pandemic has triggered a massive disruption of labour markets that have had disproportionate impacts on youth employment.

Through lockdowns and travel restrictions, demand has slumped and many businesses have been forced to close or cut back operations, with serious impacts on workers.

Nearly 220 million young workers (15–24 years) in the region are particularly vulnerable given their short tenure on the job, their employment in especially hard-hit sectors and their tendency to earn livelihoods in insecure informal jobs.

Young people's employment prospects in Asia and the Pacific are severely challenged as a result of the pandemic.

Youth will be hit harder than adults in the immediate crisis and also will bear higher longer-term economic and social costs, the report said. 

At the onset of the crisis, nearly half of young workers in the region were employed in the four sectors destined to be hardest hit by the recession, the report said.

These sectors -- wholesale and retail trade and repair, manufacturing, rental and business services, and accommodation and food services -- employed nearly half of all young people (more than 100 million) working in Asia and the Pacific at the onset of the crisis.

Young women are overrepresented in three of the four highly impacted sectors, particularly in accommodation and food services. Job loss among youth will continue throughout 2020 and could result in youth unemployment rates doubling.

Between 10 million and 15 million youth jobs (full-time equivalent) may be lost across 13 countries in Asia and the Pacific in 2020.

These estimates are based on the expected fall in output and consequent decrease in labour demand for the year relative to a non-pandemic scenario.

To address the youth employment crisis, governments in the region urgently need to adopt large-scale and targeted responses, centred on comprehensive labour market policies, including wage subsidies and public employment programmes, and minimising the impacts on young students of disrupting their education and training, the ILO-ADB report said. 

Effective COVID-19 mitigation measures will ensure that the poorest and most vulnerable youth are reached and that young people are meaningfully engaged in policy and social dialogue. 

"Prioritising youth employment and maximising youth productivity in the COVID-19 recovery process will improve Asia and the Pacific's prospects for inclusive and sustainable growth, demographic transition and social stability."