Rising ranks of unemployed youth worry Asian policymakers
Youth unemployment has been on the rise in Asian countries in 2019, especially in China and India which boast the largest populations of jobless young people. Their governments are struggling to stem unemployment growth amongst recent graduates in particular.
Chinese universities produced a record 8.3 million graduates this year, more than the entire population of Hong Kong. In addition, there are some half a million graduates returning from the West, where tightened visa policies have pushed them out of professional jobs in the US and Europe.
This is all happening as the trade war between the US and China escalates.
This year, about two thirds of those entering China’s labour pool will be university graduates, up from around half of the incoming workforce just three years ago.
The Chinese government is intervening in a quest for “social stability”. Last month, it announced measures aimed at getting more graduates into employment. Small firms that recruit unemployed graduates can apply for a tax rebate, and the Ministry of HR is also giving low-collateral loans to graduates who want to start their own businesses.
India has also seen an increasing youth unemployment rate over the past 12 months. It rose to 23.7% percent in the fourth quarter of 2018, from 23.1% three months earlier. The number of new graduates in India surpassed the number of jobs created last year, with 31 million unemployed youths and only 6 million new jobs.
Another country that saw its youth unemployment climb is South Korea, where the rate reached 10.4 percent in June this year, up from 9% at the same time in 2018. According to Statistics Korea, the number of jobless people aged between 15 and 29 increased from 388,000 to 453,000. The youth unemployment rate is arousing social worries, having grown from 8.4% a decade ago (in June 2009), and 8% five years ago (in June 2014).
President Moon Jae-in had pledged to prioritise the employment of young people, though it has yet to create sufficient jobs to satisfy those in their 20s and early 30s. Moreover, the government has been criticised for sharply hiking the minimum wage, which is believed to have hampered active hiring.
Governments know they need to act to create jobs for young people, but clear and coordinated strategies are lacking. Government policies around skills for youths are often spread across ministries and agencies that have little to do with one another. In fact, there are important disconnects between government agencies on what the problem is and how to address it.