COVID 19 economic fallout

Pandemic fallout
Young workers
to be hit hard
Pandemic fallout

Why?

Susana Puerto (ILO Research and Technical Specialist) and Kee Kim (ILO Macro-Economic and Employment Policies Specialist)

The COVID-19 emergency is affecting almost everyone in the world, regardless of age, income or country. However, young people are likely to be particularly hard hit by the economic fallout of the crisis. Find out five reasons why.

Tough challenge

Crises fall hardest on the most vulnerable. Young people make up one such group, particularly when it comes to the social and economic impact of the virus pandemic.

Young worker restaurant Thailand

Making the transition into decent employment is a tough challenge for young people, even in the best economic times. Figures from 2019 – before the virus outbreak – demonstrate this, with one-in-five of those aged under 25 (equivalent to 267 million young people worldwide) classified as NEET, or not in employment, education or training.

Five reasons

There are five reasons why young women and men will be particularly affected by the economic fallout of the COVID-19 pandemic.

Young workers are affected more than their older, more experienced colleagues by recessions. Experience shows that younger workers are often the first to have their hours cut or be laid off. A lack of networks and experience can make it more difficult for them to find other, decent, jobs and they can be pushed into work with less social and legal protection. Young entrepreneurs and youth cooperatives face similar problems, because a tight economic situation can make it harder to find resources and financing, and they lack the know-how to cope with difficult business conditions.

Informal economy

Three in four young people work in the informal economy (particularly in low- and middle-income countries), for example in agriculture or in small cafes and restaurants. With little or no savings, they can't afford to take time off to self-isolate.

Many young workers are in "non-standard forms of employment", such as part-time, temporary or 'gig' work. Such jobs are often low paid, with irregular hours, poor job security, and little or no social protection (paid leave, pensions, sick leave, etc). Often, such work does not qualify for unemployment benefits, and in many countries the labour market institutions that might help, such as job-centres, are ineffective.

Vulnerable to pandemic

Young people commonly work in sectors and industries that are particularly vulnerable to the COVID-19 pandemic. In 2018, roughly one-in-three young workers in European Union member states were in the wholesale, retail, accommodation and food sectors (as shop assistants, chefs, waiters, etc), which are predicted to be among the businesses worst affected by COVID-19. Young women in particular are likely to be affected because they make up more than half of the under-25's employed in these sectors – for example women account for 57 per cent of young people in the food services and accommodation sector in Switzerland and 65 per cent of those in the United Kingdom.

Need for special measures to help young workers

Young people are more at risk than any other age group from automation. A recent ILO study shows that the kind of jobs they hold are more likely to be automatable, in whole or part.

So, while the COVID-19 emergency is going to affect almost everyone in the world, regardless of age, income or country, young people are likely to feel the pinch harder. Therefore, when world leaders draw up support and stimulus packages, they need to include special measures to help young people, and ensure they are included in support schemes – whether they are employees or entrepreneurs.

It isn't just individuals who are damaged by increases in youth unemployment, it exerts a great and long-term cost on our societies too. Entering the labour market in a recession can lead to significant and persistent earnings losses for young people that can last their entire career. Ignoring the particular problems of young workers risks wasting talent, education and training, meaning that the legacy of the COVID-19 outbreak could last for decades.