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ECONOMIC CHALLENGES POST COVID-19 FOR YOUTHS

At the time of writing, the COVID-19 pandemic had infected up to 2.9 million people worldwide, with over 200,000 deaths. It crippled the global economy and there’s a recession looming over the horizon awaiting. Most of the affected countries are under some form of lockdown and countless businesses struggle to make ends meet with some laying off its employees due to being unable to pay them. This pandemic shook everyone across the socio-economic levels but are mostly felt by the M40 and B40 income groups where they are vulnerable to receiving little to no income. Moreover, the uncertainty of their situation post-COVID-19 does not help the situation either.

The government had procured an economic stimulus package designed to mitigate the impact of COVID-19 and MCOranging from a one-off cash assistance, loan deferments to fund assistance for SME businesses. While that might be adequate if not barely for the receivers to survive the MCO, I personally think that such measures fail or at least would fail to address the underlying and incoming problems post-COVID-19. Whether we like it or not, this pandemic has changed the way the world operates. For instance, it shows that office workers are just as effective working from home as they would be at the office. Might we see a flexible schedule that does not revolve around the traditional 8 to 5 timeframe thus reducing the need to commute to the office location, saving hours which could be channeled to productivity instead? Who knows. But those are the best-case scenarios of what could happen, ideally when people still have a job. Unfortunately, we could not say the same for everyone.

What we have ahead of us is a supply side problem. Should the recession hit, a lot more companies will fall, possibly even causing entire industries to collapse. The fiscal measures introduced by the government is only temporary, but what instrument will then protect the loss of jobs that would ensue? Which eliminates demand and causing companies to fall and the vicious cycle continues. Automation plays an even bigger role here. If I owned a manufacturing plant, there is much more incentive for me to reduce labor and go for automation. At least for me then, production can still be carried on even if there is a pandemic. Now more jobs are at risk. A counter argument could be that the cost of shifting towards automation is high and while that is true, it should be noted that the IR4.0 is then brought forth sooner than expected.

Quality of education in youths is affected during the MCO and although provisions had been in place to account for this such as online classes, it is far from adequate. Realistically speaking, as I see it, online classes range massively in execution and effectiveness. It is okay at best and it heavily depends on access to decent internet and this is where inequality wreaks havoc to access in education. Those without access to decent internet are left behind especially affecting rural areas and B40. Coming out of MCO, there will be varying degrees of syllabus coverage by students and thus, more time is needed to be allocated for those who had missed out for several months. Also, it is important to note that this year’s graduates are possibly plunged into a recession fresh out of college. Are they expected to compete with those who had lost their previous jobs and also looking for employment? If they are not able to secure jobs in their related expertise, are they then expected to hop in the gig economy that seems to be the fallback for many today? Wage stagnation is already a massive issue as it is, now you have people who are willing to accept the current wage level as opposed to not having any at all, providing disincentive for companies to raise wages.

The ramification of this pandemic and the economic crisis that might come after will be felt well into 2021.  The current measures only account of up to 6 months from its inception and experts estimates that it would last shorter than that. Employment will undoubtedly rise, further enlarging the wealth inequality and hence, the government are ought to introduce a plan for post-COVID-19 mitigation as soon as possible.

Idzham Haqim bin Mat Rasid

Secretary of International Affairs & SDG

Malaysian Youth Council

Date: 30th April 2020

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