Need to review policies on youth joblessness
Published on: Sunday, March 17, 2024
By: Dr Rulia Akhtar
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When young people lack the necessary skills to meet the demands of the labour market, it not only limits their employment opportunities but also hinders economic growth and competitiveness. - pix for illustration purposes only
They are full of energy, brave and equipped with innovative ideas that, if well-coordinated and incorporated into national economic activities, can bring about social and economic change.
Despite their significance, youths still face numerous difficulties, with unemployment being one of them.
Youth unemployment is a significant issue faced by both developed and developing nations worldwide.
Governments around the world are becoming increasingly aware of the high rate of youth wage stagnation and how it can have negative and far-reaching effects on growth globally.
Substantial research has indicated that being unemployed while young, particularly for long periods, may have long-term detrimental effects on future earnings and employment prospects, as well as a negative impact on a job seeker’s mental health and level of happiness.
According to the International Labour Organisation (ILO), as of 2020, global youth unemployment (ages 15-24) was around 13.6pc, which is roughly three times higher than the adult unemployment rate.
Although the performance of Southeast Asia and the Pacific region is marginally better in real terms, underemployment is almost six times higher than that of adults in these regions.
This issue is also prevalent in Malaysia, with the country having the third-highest youth unemployment rate in 2018 in Asean, after Indonesia and the Philippines.
However, it was still 10.9pc lower than the regional average of 12.2pc for Southeast Asia and the Pacific.
Youth unemployment in Malaysia rose from 3.26pc in 2019 to 4.61pc in 2021.
To reduce the severity of youth redundancy, policymakers are stepping up efforts as they are aware that as Malaysia develops, future economic growth will increasingly depend on efficiency.
Furthermore, as technological progress advances, it is becoming crucially important to prepare the nation’s youth for future labour demands.
Young people have trouble finding employment because they lack the necessary skills. They also lack the connections, knowledge and resources necessary to learn the relevant skills, especially those from lower-income families.
Another factor is the growing percentage of youths who, particularly in the rural areas, fall into the “not in education, employment or training” category and are, therefore, excluded from various initiatives to combat youth unemployment.
Malaysia’s high youth unemployment rate of 10pc is primarily due to a persistent mismatch between the trained talent produced by local training institutions and the real skills in demand by the market.
According to recent statistics, several factors contribute to youth redundancy in Malaysia.
The Finance Ministry in 2019 claimed that the main causes of youth unemployment were “the lack of work experience, skills, education levels and skill compatibility” to compete in the labour market.
Below are some suggestions to solve the issue:
First, facilitating job matching and creating a stable, welcoming environment for young workers would be a more long-lasting solution to the problem of youth unemployment.
Therefore, by developing contemporary markets for all Malaysians to increase their competitiveness, whether in urban or rural areas, the government can facilitate job matching and absorb youths into the labour market.
Secondly, the government needs to help young people find jobs that are more secure, pay fairly and match their qualifications.
Technical and vocational education and training (TVET) is essential to bridging the skills gap.
To reduce youth unemployment, TVET should be effective and provide plenty of opportunities for local talent to upskill and reskill to fit the current job market and applications.
Thirdly, entrepreneurship can be a powerful tool in addressing youth unemployment.
Entrepreneurs can be instrumental in creating wealth through the development of innovative techniques and solutions.
Companies should encourage this type of thinking by providing employees with the opportunity to experiment with new ideas as well as the resources to put those ideas into action.
Fourthly, helping young people enter the workforce is one of the world’s most urgent challenges today.
By fostering the growth of tomorrow’s skilled workforce, on-the-job training for young employees will benefit both the youth and the long-term success of the company.
Greater diversity and inclusion will be made possible by working together, thus closing the gap between education and the labour market.
The fifth point is the issue of mismatched skills, which is a crucial factor in the problem of youth unemployment.
When young people lack the necessary skills to meet the demands of the labour market, it not only limits their employment opportunities but also hinders economic growth and competitiveness.
This can result in lost opportunities for productive transformation and job creation.
A concerted effort from governments, private sector organisations and educational institutions to ensure that young people are equipped with the necessary skills to meet the demands of the labour market is crucial to address this issue.
Public or private resources are allocated to training programmes under the presumption that acquired qualifications will result in increased wages or employment.
Last but not least, to support rural livelihoods and assist those in the informal economy to transition to the formal economy, the government should create skill training programmes for youth in rural areas that are focused on job creation.
The instability of industries like manufacturing, the gig economy, wholesale and retail trade, lodging and food service and hospitality is another issue.
The government should stop providing direct financial incentives and focus on bolstering the social safety net.
Dr Rulia is Research Fellow, Ungku Aziz Centre for Development Studies, Universiti Malaya.
- The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express.
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