I READ with interest a recent article written by James Chai titled “It is the worst time to be young”.
As an “older millennial” who graduated in 2009, in the midst of the global financial crisis, this certainly resonated with me. I vividly remember the advice given to me: “Just take whatever job that was offered to you”, “Low salary is better than no salary!”, or “Further your study to stay in school a bit longer”.
Unfortunately, the latter is not an option everyone can afford. As we face the Covid-19 crisis today, I can’t help but wonder what it means for my younger compatriots out there.
Even in pre-Covid19 days, young people in Malaysia are already struggling. Today, our youth are more highly educated than ever, but our economic model has not caught up. We have a mismatch of graduates and the high-skilled jobs available. On average, Malaysia produces 173,457 graduates, but only 98,514 high-skilled jobs annually.
Our economic model suppresses wages. Reliance on migrant workers has made our labour costs cheap. In the School-to-Work-Transition Survey (SWTS) done by Khazanah Research Institute (KRI), graduates are said to be willing to accept a salary of as low as RM1,555 per month.
A third of those interviewed engaged in the informal sector – although we are not able to ascertain if this is by choice or by necessity, it is most likely the latter, given the tough job market conditions.
Yet, a misconception on the value of higher education qualifications has caused many to blindly pursue degrees, incurring huge student loan debt.
Meanwhile, technical and vocational education and training (TVET) education, which has the potential of training many skilled workers for the country, is being seen as a “second class” option, only fit for the academically challenged and not being taken seriously as a career pathway.
Young people are struggling, financially. Worse, they are a highly educated class with unmatched aspirations in their life.
The same KRI survey also found that 76% of single and young respondents working full-time and living in Kuala Lumpur earns below RM2,700 per month, which is the minimum amount estimated by Bank Negara Malaysia (BNM) for a single adult living in Klang Valley to lead a dignified life.
As if things are not bad enough, in come this unprecedented Covid-19 pandemic, which has caused our economy to grind to almost a stand-still. The young graduates will be the ones that are worst hit.
As evidenced by the last global financial crisis, young people are often the most sensitive towards economic turbulence and youth unemployment rate is already three times higher than adults in Malaysia.
As James pointed out, rather bleakly, studies has shown that these “crisis cohort” suffers the long-term impact of their “unlucky draw” – it can take up to 10 years to catch up on their salary scale even after the recession is over, which can lead to other “knock on effects” such as depression, delay in setting up a family, poorer health, etc.
Indeed, things are not looking good. The International Monetary Fund (IMF) said that the “Great Lockdown” is the worst since the Great Depression, and we can only expect economic recovery in 2021, if not later.
We were told repeatedly that things will not be the same again and we must embrace the “new normal”, although no one can tell us clearly what that means.
Could one see any silver linings amid these dark clouds? I would think so, and will attempt to provide a more positive twist to our predicament.
In every crisis, there’s opportunity. Just as the last global financial crisis is a game changer is changing the way we think about our economy and society, this Covid-19 crisis should do, too.
The crisis has created winners and losers in the economy, and the availability of jobs will change according to sectors. Some sectors might go down, but some will benefit.
From a policy perspective, our economy will do well to gain from a shift towards a more knowledge-based economy that will finally get us out of the middle-income trap and propel us into a high-income society.
In a way, the crisis has accelerated the process of economic transformation. We are suddenly forced to speed up the uptake of digitalisation and technology, which for various reasons, has been met with resistance to change by the industries before Covid-19.
Automation will also be an impending phenomena, if the industries are properly incentivised to do so. It is of course, a double-edged sword from a job perspective, as it threatens to replace jobs. It is therefore important for the young workforce to upskill and reskill, and to aim for jobs that will not be easily replaced by robots.
The question is, how are we to help this “Generasi Covid-19”, who are going to face an uphill challenge in kick-starting their career?
Thus far, the government has announced a six-month deferment of repayment of the PTPTN student loan, the Bantuan Prihatin Nasional (BPN) handout of RM800 for singles earning below RM2,000 and a one-off RM200 assistance for university students.
While these measures will provide temporary relief, helping young graduates to look for a job, or retaining one would be even more important.
More career support and help in creation of new jobs/internships specifically targeted at fresh graduates and job-seekers will be needed.
For instance, we should look into enhancing job search portals such as JobsMalaysia, along with other private job search platforms to not only advertise available jobs, but to actively assist graduates in carving their career path.
We need the government to make a clear commitment and actively create more jobs for young graduates. More importantly, we need to create high-skilled jobs that match their skill sets and pay them commensurately.
In the case of Singapore, the government has committed in their stimulus budget to create 10,000 jobs and 8,000 traineeships over the next one year. In the last budget, the government has announced the [email protected] programme, which pays an additional RM500 to the employee and RM300 to the employer for every graduate employed for a duration of two years.
This initiative is now even more important in this difficult time, and should be boosted to increase the wage subsidy for companies to retain young graduates, up to those with less than 5 years working experience. Similarly, we will also need more targeted benefits for job seekers who have not found a job after graduation.
Incentives for continued learning should also be rolled out for young people to take part in online courses.
Ironically, Covid-19 has acted as an “equaliser” where we suddenly have a boom in the resources available to us online from around the world, with universities offering free online webinars, journals, library access, etc. With a little nudge and facilitation from government and local universities, Malaysian youth will do well in benefitting from this.
The Human Resource Development Fund (HRDF), which has recently also taken its courses online, must also step up to offer more relevant and high-quality courses to employees, young and old alike.
The effort to promote work on digital platforms must also be intensified to help young graduates find meaningful work online. This can be done via existing mechanisms such as E-Rezeki and E-Usahawan, powered by the Malaysian Digital Economy Corporation (MDEC).
A more flexible, work-from-home option will be appealing for young graduates either as a stop-gap measure, or to develop it into a longer term career. However, we must take care to make sure that these platforms offer desirable jobs that pay well to these young freelancers and entrepreneurs, and not to render them into another group of precarious digital menial workers with little social protection.
Of course, not to forget inequality between households with different income levels, as not all youth have ready access to the internet – the enabler for the two initiatives mentioned above. Investments in high-speed internet connection and telecommunications infrastructure hence become more important than ever.
It is also important to note that things are not necessarily better for older millennials aged between 30-35 years old.
As explained, this was the group that was hit first by the global financial crisis in 2009, and now the Covid-19 crisis as they enter an important phase of their lives.
As such, while the move to adjust the definition of youth to “30 years old and below” by the previous government is a good effort to encourage youth participation, it is important that the 30-35 year olds are not left out in any policy intervention design.
Young people need our help. But on the flip side, they are also in a position to help. Youth have an active role to play in helping the country get through these tough times. One of the grassroots initiatives that really touched my heart during this pandemic is the one started by a group of young people at Biji-Biji initiative, who put their skills into good use to produce protective face shields for frontliners.
Elsewhere, many innovations have also sprung from young entrepreneurs across the country.
Because the future is uncertain, it is also up to us to shape it. What is the post-Covid-19 society that we want to see?
In the short term, our country will need a whole-of-society approach to win this long-haul fight against the pandemic, where every government machinery, private capital and bottom-up innovative potential must be directed to help us emerge from the shock.
In the longer term, we need an economy that is more diverse and pays its workers better, and we need a society that has a more robust social safety net for everyone.
It is time we take a deep hard look on our economic and societal structure. Taking a leaf from the World Economic Forum, the world today needs stakeholder capitalism that focuses on investments that deliver social goods, as opposed to shareholder capitalism that is merely focused on profits. What is the social impact of the profession you want to embark on, or the “value proposition” of the business you are dreaming of starting?
Indeed, it sucks to be young now, but as we enter this “brave new world”, let’s turn fear, into strength. – April 21, 2020.
* Ivy Kwek is Research for Social Advancement (Refsa) research director.
* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight.