by Vaibhav Tandon, Senior Economist, Northern Trust
Each generation carries the imprint of its formative years.Ā Baby Boomers were shaped by post-war prosperity; Gen X, by independence and skepticism; Millennials, by globalization and crises.Ā Gen Z, starting in 1997 (age 28 or younger today), have come of age amid economic uncertainty, climate anxiety, a global pandemic, and rapid technological disruption.
The impact of these challenges has fueled discontent among Gen Z, sparking youth-led protests in several Asian economies, including Indonesia, Nepal, and Bangladesh.Ā While these movements reflect a growing frustration towards their respective governments over lack of economic opportunities, this isnāt just confined to smaller Asian nations.
Major regional economic powers such as India and China, and even developed nations like the United States, are confronting the growing challenge of youth unemployment and disenchantment.Ā Across Asia, youth unemployment rates typically are running two to three times higher than headline figures.Ā India tops the list with a joblessness rate of 17.6% among its young cohort, followed closely by Indonesia at 17.3% and China at 16.5%.Ā This translates to a staggering 43 million unemployed youth in India, and about 17 million in China.
Youth unemployment can become a source of global social instability.
India has seen a period of weak private sector investment.Ā This has constrained capacity expansion, hindered job creation and contributed to widespread underemployment. With at least 84 million people expected to enter the workforce over the next decade, the current growth rate of 6.5% will fall short of what is needed to absorb a growing young population.Ā In China, a deflationary environment and the pushback against involution will compound existing pressures.Ā Though Gen Z is most adaptable to new technologies like artificial intelligence and automation, they are also the most vulnerable to the resulting job displacement.
Policymakers must focus on making growth more inclusive across all cohorts to mitigate risks to social unrest.Ā Upskilling programs are relatively easier to implement, but not a silver bullet. Ā Left unresolved, Gen Zās discontent could become a source of persistent instability.Ā This would leave a lasting imprint not just on this generation, but on those that follow.
Copyright Ā© Northern Trust
