Already scarred by the global financial crisis a decade ago, a generation of younger people is bearing the economic brunt of the coronavirus. Even billions of dollars in global fiscal stimulus is struggling to cushion the blow as the pandemic worsens generational inequality.
Take Australia as an example. Despite a A$260 billion ($180 billion) injection of financial and economic support, unemployment among 15 to 24-year-olds has surged to 16.1%, compared to about 5.5% for those over 25. That’s in a country that hasn’t seen a recession since the 1990s and is in the vanguard of nations containing the virus.
About a quarter of younger workers aren’t eligible for the Australian government’s flagship wage subsidy package because they are on casual contracts and haven’t been employed for 12 months, according to Catherine Birch, a senior economist at Australia & New Zealand Banking Group Ltd. That compares to just 6.5% for all other age groups.
Elliot Matthews, 21, is one of the unlucky ones. In April, when he learned there’d be no more shifts at the Sydney hotel where he worked, he was just two weeks short of a year’s employment. “That’s a very hard window to fit into,” Matthews said of the government requirement. “While it’s a dark time for everyone, a lot of people are falling through the cracks.”
It’s far from just an Australian story.
As the pandemic drags on, it’s exposing generational fault-lines that were set in train a decade ago when the financial crisis hit Millennials hard and left Generation Z -- described by Pew Research as those born after 1996 -- with a legacy of insecure work and stunted opportunities.
Across the west, seemingly regardless of the fiscal support, the youngest workers are more likely to be out of a job.
Generational inequality in Australia has long been an issue. Youth unemployment hovered above 12% pre-Covid, higher than in the U.S., the U.K., Singapore, Japan and Hong Kong, according to the World Bank. Home ownership among young Australians is at an all-time low after prices surged beyond their reach -- pushed higher in part by generous tax breaks enjoyed mostly by older Australians on their investment properties.
As the coronavirus tips the economy into its first recession in almost 30 years, those issues will be compounded.
“Substantial, targeted, ongoing support, additional to current policies, are needed to ensure young people aren’t left behind,” Birch said. “The labor market for young people is more precarious going into the current shock than it was pre-global financial crisis.”