‘Employment Ice Age’ Sounds Alarm Bells For Younger Workers

Entering the workforce sandwiched between the Great Recession and the COVID-19 pandemic, younger workers are facing an “employment ice age,” a new economic report found.

The World Economic Forum published a series of reports ahead of the Davos summit of world leaders next week. Citing the myriad of challenges brought on by the pandemic, the WEF said younger adults – those between 15 and 24 years old – are facing their second major crisis in their lifetime.

The first was the global recession that gripped global financial markets in the late 2000s, when they were coming of age, followed by the pressures brought on by the COVID-19 pandemic, when they’re looking to launch their careers.

“The outlook for this generation had already been diminished by environmental degradation, rising inequality (of many types - gender, intergenerational, economic and ethnic), varying degrees of violence, and social disruption from the tech-enabled industrial transformation,” the report read. “While the digital leap forward unlocked opportunities for some youth, many are now entering the workforce in an employment ice age.”

The so-called Great Recession pushed unemployment rates into the double digits and saw many major financial institutions collapse. The WEF’s analysis found the level of stimulus enacted at the time was not enough to help.

The unemployment rate for Americans ages 20-24 was 11.2% as of December 2020 after peaking at 25.6% in April, the early stages of the COVID-19 pandemic in the U.S.

The CURES Act, a $2.2 trillion stimulus package passed last year, supplemented state unemployment insurance with $600 in weekly federal support, keeping many families from financial ruin during the pandemic.

For the first half of 2020, the World Bank in its annual report estimated the U.S. economic contraction was three times as severe as the strains from the global recession in the late 2000s.

Growth in the second half of 2020 was supported by fiscal stimulus, though that bank said the support eroded quickly as cases of COVID-19 accelerated in the country.

President-elect Joe Biden has pledged to pump more money into the economy, though many of the jobs available for younger adults such as restaurants are off limits because of social restrictions in place during the pandemic.

“They entered youth in the throes of the financial crisis, and are now exiting at the outset of a pandemic not seen in generations,” the WEF’s report read. “They will face serious challenges to their education, economic prospects and mental health.”

For younger adults, dubbed “pandemials,” the WEF found that even a month without a job could lead to a 2% loss in income in the future.

Of the jobs that younger adults are taking, the WEF reported that about 80% of those worldwide work at menial jobs that leave them at risk of slipping quickly into poverty. That in turn has created a “youth disillusionment” that poses a “critical threat” to the world.

“’Pandemials’ are at risk of becoming the double lost generation of the 21st century,” the report reads.