With poor GDP, youths are first to suffer

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An honorable member of the Coffee Shop Has Just Posted the Following:

Singaporeans have a strange attitude towards GDP. The lower it goes, the more relived we seem to be. We have associated economic growth with all the ills of a growing Singapore: packed trains, wage gap, crowded environments etc.

The man in the street is unfazed by our performance. He frequently complains why his salary isn’t rising as fast as the Straits Times Index (well, up until last year at least).

To put it very bluntly: a strong economy isn’t just about you and your wallet. The life and death of every sector of this island-state hinges on our performance, on our place in the world. Borrowing from Chinese wisdom, it is not about “eating rice or porridge”. It is more between eating rice or grass.

Economists have observed that in periods of recession and flat growth, youth unemployment rises. The state of an economy has a direct relationship to youth unemployment. When it comes to the crunch, businesses are not as willing to expand nor are they as ready to hire inexperienced younger workers. They are also most vulnerable to outsourcing and cheap sourcing. The rise in the use of freelancers further reduces the young worker’s opportunity to be employed.

Extended periods of unemployment increases the hurdles in a young person’s employability, this person then is in danger of being made irrelevant to the market. Japan’s youth joblessness, (which surged after the financial crisis of the 90s) remain high until today.

Low growth and slow growth are the most obvious cause. High tax on labour, unfair competition and high minimum wages are other contributors to the disease of unemployment.

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