AS Budget Day approaches, talks about the perks to be considered in addressing the setbacks of an unprecedented crisis caused by the Covid-19 pandemic have been ongoing, and youth is one of the targeted groups that need assistance.
Youth aged 15-24, who represent about 16% of the total Malaysian population, is one of the vulnerable groups which have been impacted negatively by the crisis.
Since the national budget might not be a “one-size-fits-all” budget, there are some significant issues of youth, namely, unemployment and underemployment, access to education and house ownership, which can be considered for further actions.
The need to address unemployment and underemployment
Concerns about youth employability have risen since the pandemic as plenty of them are either unemployed or underemployed. This is backed by the verbal evidence gathered from EMIR Research focus group discussion (FGD) for our third quarter poll.
For example, a discussant shared in his own words: “First things first, employability, whether we’ll get employed or not. We are the unlucky batch (those born after 1995) because when we want to find jobs, the pandemic happens.”
Youth unemployment rate registered at 10.5% in 2019, much higher than the overall unemployment rate of 3.3%. In absolute numbers, the unemployment rate represents 295,800 youths.
Underemployment also becomes a concern as there seems to be a mismatch between graduate wages and qualifications despite their increasing employability.
Anecdotally, there are youths with degree or diploma qualifications who are left with no other choice but to go for jobs with lower salaries and not in the industry of their expertise.
This situation has shaped a perception among the graduates that high qualification does not guarantee a good job when it is not supposed to be that way.
In the FGD, another discussant said: “After I finished my degree, I worked at a non-government school. I was paid only RM1,000 a month. My friend, who works as a cleaner at KLIA, is paid RM1,800 per month. So, it’s really disturbing. I spent four years of my life for a degree and I am paid only RM1,000. So now I think it’s better for me to work than further my degree.”
Job creation and training in line with the relevant industries, especially post-pandemic, are crucial to help mitigate both of these pressing issues for youth while upskilling or reskilling them to meet the demand from industries.
For instance, the hiring and training incentives provided by the government in the Penjana package seems helpful for the firms and should be continued in a transparent manner.
These initiatives would be more sustainable in improving employability while generating the targeted 35% of high-skilled talents in the workforce.
It can also help strengthen youth’s social safety net rather than cash assistance that could be unsustainable in the long term as youth would possibly become dependent and it could also lead to abuse of aid.
Improving digital infrastructure for education’s sake
Equitable education access for youth must not be neglected in order to produce the best of human capital for the benefit of the nation.
Although the pandemic has forced us to leverage on technology in many ways, like getting access to education, not everyone is that privileged. For instance, those in the B40 group and those living in rural areas where Internet connectivity or cost becomes the barrier. Statistics from the Department Of Statistics Malaysia (DOSM) have shown that there is a gap between urban and rural areas – 92.2% and 81.5% respectively – regarding Internet access.
Life experience regarding the cost was shared by a discussant during the FGD: “I had to subscribe to Internet, my mobile data can only support the phone. If I want to use it for the laptop, the data cannot support because we are used to having WiFi at UIA. Even when there’s no line, we still try to find it at any corner. But when at home, I have to ask my parents to buy unifi or whatever.”
It is indeed timely to pay closer attention to this issue as schools are currently closed due to rising Covid-19 infections which make students reliant on online learning.
Besides improving the quality and coverage of digital infrastructures, digital incentives should be given to those in B40 households and those living in rural areas for digital-related purchases, such as tax relief for computers or tablets. Also, the government can allocate a portion of expenditure to provide digital equipment to unprivileged students.
Strengthening rental market for first-time youth house buyers
Anecdotal evidence has revealed that home ownership has become harder for youth, particularly those in the B40 group, due to employment uncertainty and insufficient incomes.
To make home ownership viable for youth, Rent-to-Own (RTO) schemes should be implemented across the nation for the affordable housing units in order to provide the options for the unprivileged.
In this scheme, youths who plan to own their own house but are unable to afford it, can initially opt to rent at affordable rates for a few years. Meanwhile, they can start saving in order to buy a house at the end of the rental period or when they can secure mortgage loans. This would be in line with the proposal to create jobs for the youths to start securing incomes.
EMIR Research is a think tank focused on strategic policy recommendations based on rigorous research.