Gen Z’s rage in Asia is stoked by a staggering jobs crisis

Youth-led protests across Asia in recent months have centered on corruption, elitism and censorship. But behind Gen-Z’s anger lies something even more troubling: A staggering jobs crisis.

The generation born around the turn of the century is facing a bleak economic future. A shrinking pool of jobs and the advance of artificial intelligence are weighing on their prospects. Left unaddressed, the demographic dividend (which refers to having more people in the workforce than dependents) that leaders like to tout as a guarantee of prosperity can just as easily become a trigger for unrest.

President Donald Trump’s trade wars and a backlash against globalization are reshaping labor markets. Youth unemployment in parts of Asia is consistently two to three times higher than national averages, notes Morgan Stanley in a report titled Asia Faces Rising Youth Unemployment Challenge. The few jobs available are too often precarious, underpaid, or vanishing to automation.

The problem is particularly acute in the three most-populous countries, where economic growth isn’t being translated into enough new jobs to accommodate the millions of people who will be looking for work: China, India, and Indonesia have youth unemployment rates of 16.5 per cent, 17.6 per cent and 17.3 per cent, respectively. By contrast, the US reports a rate of 10.5 per cent.

Underemployment is widespread, too. Informal labor compounds the problem: More than half of Indonesia’s workers still rely on casual jobs. These positions are more likely to be irregular, offering little security and meager wages.

Insecurity over economic prospects was a major factor in the protests in August. Initially sparked by fury over perks for parliamentarians, they morphed into a broader outcry over inequality, highlighting the precarious conditions of millions of gig workers across the archipelago.

These problems are only likely to intensify because of the challenges posed by AI and automation. In India for instance, this could reduce job growth prospects, particularly in the IT services sector, long a key source of employment for young people.

Textile factories and car plants, traditionally where many young Asians work, are also becoming increasingly automated. Worryingly, this is happening as tens of millions more people are expected to flood labor markets in the coming decade. India alone expects 84 million new entrants, while Indonesia will add 12.7 million, according to Morgan Stanley.

China has seen the number of new job-seekers swell too. This year’s graduating class is the largest in history, the Asia Society notes, with a cohort of more than 12 million students. They’ll be entering an employment market that’s been disrupted by the brutal trade war with the US, and AI advances in almost every sector.

Protests are taking place in the world’s second-largest economy as well, despite Communist Party suppression. Many of these demonstrations are over the slowing economy, says the China Dissent Monitor. In the first half of this year, protests doubled from the same period last year.

For decades, Asia’s leaders have relied on strong growth to deliver stability. But expansion without jobs isn’t sustainable. Governments have to equip young people with new skills and create avenues to meaningful work. Education curriculums need to shift from an over-reliance on academics, to focus on entrepreneurship. Vocational training in trades and crafts would also be useful.

Reforms will be critical. China has been trying to shift the economy toward consumption and services for a while now but has yet to achieve its goals, with exports contributing to almost a third of growth during thefirst half of the year. India is one of the fastest-growing economies globally, but this pace isn’t enough to generate jobs. Growth will need to double, according to Morgan Stanley, to address the underemployment challenge. Meanwhile, long-term growth in Southeast Asia’s largest economy is expected to miss government targets of 8 per cent as it faces a dual threat from cheap Chinese goods and US tariffs.

Policymakers in all three countries may ultimately need to turn to redistributive measures to avoid rising social unrest. These could include subsidies and expanding public sector employment. Cash transfers can’t solve the problem long term, but they buy governments time.

Corruption and nepotism, long-entrenched in many Asian nations, will also need to be addressed. Young people repeatedly cite these as sources of their anger. Without tackling these issues, even new jobs risk being seen as unfairly allocated.

Asia’s Gen-Z protests are the early signs of a generation that feels hopeless. The test for the region’s governments will be whether they can provide their young people with not just work, but a future worth believing in.