Young people are particularly affected by the corona crisis - this is the conclusion of studies by the International Labor Organization (ILO). In a recently published paper, the ILO presents the effects of the crisis and shows ways to mitigate the consequences.
This ILO policy paper contains a lot of figures based on analyses of statistical data during and after the global economic and financial crisis and a recent survey on the consequences of the COVID-19 pandemic for young people (15 – 25). It is therefore an important document to assess the impact of the pandemic on youth employment and to take appropriate action. In this policy paper, ILO also pays a great deal of attention to the results for young women. It is also clear from their research that history does repeat itself and that lessons can be learned from previous recessions.
In this article, we present some main points and a brief summary of the ILO’s proposals. You can read the full text via this link (ILO Policy Brief).
Why are young people disproportionaltely affected by recessions?
Young people constitute a large share of all new job seekers. Between the ages of 15 and 24 is precisely when most people enter the labour market for the first time. The immediate reaction of a firm facing a precipitous decline in the demand for its products or services is to reduce or interrupt the hiring of job seekers in this age group, and, with more jobseekers competing for limited numbers of jobs, young people are at a disadvantage compared to more experienced workers.
Young people are cheaper to fire. Recessions also mean an upswing in retrenchment and young people, on average, have spent less time on the job than older workers. Thus, young people are ‘cheaper’ to fire because:
- Protective labour market institutions, such as employment protection legislation, typically prescribe an increasing cost of firing workers with tenure;
- Young people are more likely to work in less protected jobs such as temporary and informal employment, and are much less likely to be members of trade unions;7
- Workers continue to acquire work related (and above-all firm specific) competencies for a considerable period after they are hired so their productivity within the firm tends to increase with experience. This means that firing workers with more experience is also more expensive for firms because it entails a greater loss of productivity
Youth is vulnerable to the severe economic decline in hart-hit sectors
More than 4 in 10 young persons employed globally, were working in the four sectors most adversely affected by the crisis in terms of reduced employment and hours of work. Moreover, young workers in these sectors are disproportionately concentrated in low-wage unprotected jobs.
While young women account for less than 39 per cent of global youth employment, they make up almost 51 per cent of youth employment in accommodation and food services, 41.7 per cent in wholesale and retail trade, and 43.8 per cent in real estate and other services activities. Approximately 74 per cent of young people employed in the human health and social work activities sector are young women.
Preliminary results of an ILO-Global Initiative on Decent Jobs for Youth survey suggest that 17 per cent of young people (aged 18-29) surveyed have stopped working since the onset of COVID-19 compared with 11 per cent of those aged 30-39.24 While impacts related to work stoppages are more pronounced in high-income countries (read Europe), young workers in countries of all income levels have been heavily affected.
For young people who have remained in employment, working hours have been cut by 23 per cent and impacts on incomes are widespread with 42 per cent of young workers reporting a significant or slight decline since the COVID-19 outbreak. Half of student respondents, to the recent ILO survey, expect a delay in their education, while 10 per cent anticipate that they may be unable to complete their current studies. There is also a major interruption to apprenticeships and traineeships.
Urgent, large-scale and targeted employment policy responses are needed
Stimulating the economy and employment:
- Countercyclical fiscal policy to ameliorate youth unemployment during the crisis.
- Targeted economic and employment policies for the hardest-hit sectors, emerging areas such as renewable energy, new technologies, etc.
Supporting enterprises, jobs and incomes:
- Targeted support to enhance youth skills, raise productivity and counter reduced labour demand.
- Investment in training.
- Investment in online learning.
- Expansion of access to social protection and health insurance.
- Enhancing public employment services
- Youth-targeted wage subsidy programmes and work sharing arrangements.
- Expansion of support to youth-led micro, small and medium enterprises.
Protecting young workers:
- Concerted efforts are needed to protect young people in essential occupations, such as health and care workers, along with those who enter the labour market or return to work as workplace closures are lifted.
Promoting social dialogue:
- Social dialogue should be used to mitigate the negative effect of COVID-19 on young workers, covering such issues as cuts to working hours, partial unemployment, apprenticeships and internships during the pandemic, health related precautions in the workplace for youth, and ensuring the right to disconnect.
- Maintaining the rights of young workers and enhancing the capacity of workers and employers organizations to represent them, including those in the informal economy, rural economy, migrant young workers and young digital platform workers.
Large-scale comprehensive solutions are needed:
- Broad-based employment/training guarantee programmes offer a comprehensive solution where such approaches are feasible. The European Union’s Youth Guarantee provides an example of a counter-cyclical active labour market policy that, in times of crisis, delivers a comprehensive, and prompt intervention to protect youth from long-term labour market exclusion.
(Mon Verrydt - Head of EZA-office-Brussels)