Budget 2021 – Youth’s wishlist to endure the crisis

The national budget might not be a ‘one-size-fits-all’ budget but there are some pressing issues of the youth that need serious consideration by the government.

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Published by Business Today, Focus Malaysia, New Straits Times & The Star, image from Business Today.

As Budget day approaches, talks about the perks to be considered in addressing the setbacks of unprecedented crisis caused by the Covid-19 pandemic has been ongoing and youth is one of the targeted groups, among others, that need assistance.

Youth aged 15-24 who represent about 16 percent of the total Malaysian population is one of the vulnerable groups which has 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.

1. 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: “The first thing first, employability, whether we’ll get employed or not. That’s the first thing. Because now, for me, we are the unlucky batch. 94,95,96,97,98,99. After 95, we are the unlucky batch. Because it happens to be when we want to find jobs, the pandemic happens.”

Youth unemployment rate registered at 10.5 percent in 2019, much higher than the overall unemployment rate of 3.3 percent. In absolute number, the unemployment rate represents 295,800 youths aged 15-24 who are unemployed.

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 the 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 finish my degree, I work at the non-government school alright. And I was paid only RM1000 a month. So, when I asked my friend who work as a cleaner at KLIA, they are paid RM1800 per month. So, it’s really, really, I mean it’s really disturbing. We spent our life 4 years of our life for degree and we are paid with 1000 ringgit only. So, it’s quite disturbing for me. And then… so it’s like now I think it’s like it’s better for me to work, other than, err it’s better for me to work rather than furthering my degree.”

Job creation and trainings 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 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 percent 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 can also lead to abuse of aid.

2. Improving the digital infrastructure for education sake

Equitable education access for youth must not be neglected in producing the best of human capital for the benefits of nation.

Since pandemic has forced us to leverage technology in many ways like getting access to education, not everyone is as privileged namely those in the B40 group and those living in rural areas where Internet connectivity or cost becomes the barrier.

Statistics from DOSM have shown that there is a gap between Internet access in urban and rural areas – 92.2 percent and 81.5 percent respectively.

Life experience regarding cost-related issue was also shared by a discussant during the FGD: “I had to subscribe to Internet, my mobile data can only support the phone lah. If want to use for the laptop, the data cannot support because we are used to the 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 parents to buy unifi or anything.”

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 reliefs for computers or tablets, and the government can allocation a portion of expenditure to provide digital equipment to the unprivileged students.

3. Strengthening rental market for first-time youth house buyers

Finally, although it might not be as important or urgent as the two above, anecdotal evidence 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 unable to afford purchasing 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 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.

Nur Sofea Hasmira Azahar is Research Analyst at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.

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