APR 21, 2020
Lifting up the Generasi COVID-19
By Ivy Kwek
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 advices 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 a pre-Covid19 days, young people in Malaysia are already struggling. Today, our youth are highly educated as ever, but our economic model has not caught up. We have a mismatch of graduates and the high skilled jobs available. On average, Malaysia produced 173,457 graduates, but only 98, 514 high-skilled jobs annually.
Our economic model suppresses wages. Reliance on migrant workers has made our labour cost cheap. In the School-to-Work-Transition Survey (SWTS) done by Khazanah Research Institute (KRI), graduates are said to be willing to accept salary as low as MYR1,555 per month. A third of those interviewed engaged in 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, 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. Worst, 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 earned below RM2,700 per month, which is an estimate 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 Covid19 pandemic, which has caused our economy to grind to almost a standstill. The young graduates will be the one that are worst hit. As evident by the last Global Financial Crisis, young people are often most sensitive towards economic turbulence and youth unemployment rate is already three times higher than adults in Malaysia. As a recent Op-Ed entitled “It’s the Worst Time to be Young” 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 very 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 would 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 inertia 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 Covid19”, who are going to face an uphill challenge in kickstarting their career?
Thus far, the government has announced a waiver for the repayment of the PTPTN student loan 6 months deferment, the Bantuan Prihatin Nasional (BPN) handout of RM800 for singles earning below RM2000 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 for fresh graduates and jobseekers 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 the young graduates. More importantly, we need to create high-skilled jobs that match their skillsets 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 Graduates@work program, 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 would also need more targeted benefits for the job seekers who have not found a job after graduation. Incentives for continued learning should be rolled out, for young people to take part in online courses. Ironically, Covid-19 has acted as an “equaliser” where we have suddenly 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, the 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 the 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 different income households, as not every young persons have ready access to 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 the older millennial 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, young people are also in a position to help. Young people have an active role to play in helping the country get through this 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 potentials 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 focussed on investments that deliver social goods, as contrast to shareholder capitalism that merely focussed on profits. What is the social impact of the profession you want to embark, or the “value proposition” of the business you are dream of starting?
Indeed, it is a bad time to be young now, but we can do something about it. As we enter this “brave new world”, let’s turn fear, into strength.
— First published in The Malaysian Insight on 21 April 2020.