The coronavirus generation graduates into uncertainty

The article is part of After Corona, a series exploring how the pandemic has changed the world.

For young people, the coronavirus crisis is far from over.

After more than a year of interrupted studies, disrupted social lives and postponed work opportunities, the next generation of Europeans is entering a labor market still reeling from the effects of the pandemic. To be young today means to be twice as likely to be unemployed, according to the Organization for Economic Cooperation and Development.

Over the long-term, economists warn of so-called scarring effects— lingering damage to career prospects and lifetime earning that can occur after an economic shock. And while facing uncertain job prospects, they have one certainty ahead: the mountains of public debt that are being accumulated to keep businesses afloat and spur the economic recovery will one day have to be paid back — by them.

While the pandemic might not have killed young people in large numbers, that doesn’t mean they’ve escaped unscathed. Young people consistently reported higher mental health impacts due to the pandemic — twice or three times as high as older age groups in some countries.

“There’s a lot of loss across the board,” Katrina Portelli, 24, said from her aunt and uncle’s home in London. Originally from Malta, she’s pursuing a Ph.D. in neurosciences at University College London. “And hopefully, there’s also a sense of a shared sense of responsibility that comes out of this,” she said.

COVID scars

The generation about to enter the labor market is doing so following the worst economic downturn in over half a century — one that disproportionately hit the young.

Youth were more likely to lose their jobs during the pandemic because they tend to have temporary contracts, they’re more represented in sectors like hospitality or tourism which were the hardest hit by lockdowns, and because they’re the first in line to get fired.

“We know that youth unemployment has risen more than for the labor force as a whole,” EU Economy Commissioner Paolo Gentiloni said recently. “The risk of scarring, with a worsening of poverty, social exclusion and inequality, is very real.”

Globally, youth employment fell by 8.7 percent in 2020 compared with 3.7 percent for adults, and the share of young people not in employment, education or training has risen in many countries, according to a report by the U.N. International Labor Organization out Wednesday.

In the EU, following a spike during last spring, unemployment had stabilized at 7.3 percent in March this year. But youth unemployment — defined as under 25 — was much higher, at 17.3 percent.

Many young people have seen their employment prospects, or those of their peers, take a dive. Adrian Graf, 27, a visual artist and musician from Zurich, Switzerland, works part-time at a communication agency where around 10 people were fired last spring, including in his team. “That was the first time when it struck me. I was like, fuck, this is going to be bad. And this could hurt a lot of people,” he said.

For some young people, the pandemic is the second global shock they’ve lived through. It took a decade after the global financial crisis for youth unemployment to return to pre-crisis levels — in part because of austerity measures that economists now recognize helped protract the crisis.

The fiscal response has been diametrically opposite this time around, with governments pouring billions into job retention schemes. But whether those jobs will survive once state support is removed is yet unknown, and the Class of Corona that is about to graduate or did so last year — on Zoom, without great-hall gowned affairs — will have to vie for fewer openings and fend off competition from much more qualified older peers.

“It’s the new entrants to the labor market that account for the increase in unemployment among young people,” Veerle Miranda said. She’s a senior economist at the OECD specializing in youth policies. “The question is, then, if the recovery is strong enough to absorb those newcomers … and that, of course, remains to be seen.”

Dreams postponed

During the pandemic, many young people had to forego internships and other opportunities in the key years transitioning between education and the workforce — a period that can be crucial to their long-term employment.

For those still in school, only about half of the student population could access all or most of online classes, according to an OECD study spanning 59 countries, which estimated the impact of a missed school year to be 7 to 10 percent loss in lifetime income.

Agata Mala, 17, a Czech national studying in Brussels, had secured work experience in the office of a member of the European Parliament, but saw that postponed by a year and finally canceled. “I won’t actually be able to put that on my CV. So that was something, you know, that I was really looking forward to and that didn’t happen,” she said.

The relatively slow rollout of vaccinations in Europe, compared with the United States and United Kingdom, is extending the disruption.

Adriano Rodari, 21, an Italian student doing an Erasmus study program in Zagreb, had planned a one-year period volunteering in Belarus with the Italian civil service. But he’s still waiting for his shot to make that possible.

“Volunteers are not on any priority list,” he said. “I’m not saying that we should be on that priority list, but that shows you how sometimes it’s very easy to create these limits for people, for young people especially, while not really taking into account how that might affect their future.”

Gloom on Zoom

When it comes to mental health, the pandemic — and the related lockdown measures, online-only education and isolation — disproportionately affected young people. 

According to the OECD, on average 34.4 percent of young people aged 18 to 29 reported negative mental health impacts for themselves or their family. That figure’s 19.4 percent for people aged 50 to 64.

“I definitely found that I was becoming a lot more anxious with assignments, and then more looking at the bigger picture wondering, you know, why am I so stressed about a small essay, when there’s so much worse things happening in the world?” said Caítriona Maguire, 21, a student at University College Dublin, Ireland. “I’m definitely not the only one who’s had a huge surge of anxiety during this pandemic,” she said. Indeed, research suggests anxiety and depression have increased during the lockdowns.

The loss of in-class education cut off students from their support networks, affecting especially those with a more disadvantaged socioeconomic background. According to a survey of more than 1,000 students aged 18 to 21 from 25 countries in Europe by OBESSU, a secondary student unions’ association, more than 70 percent of respondents reported being stressed due to their school or home situation, and one student per classroom is at risk of early dropout due to the lack of access to online learning tools.

An overwhelming majority said they believe the pandemic is going to negatively affect their future opportunities, and nearly all respondents reported worsened health linked with extended screen time, from sore eyes and posture problems to fatigue and lack of concentration.

“When you have a student behind the black screen on zoom … You don’t know whether they’re really down and depressed, or they just don’t want to show their rooms, because they want to keep their privacy,” said Nina Ferencic, regional adviser on adolescent development for Europe and Central Asia at UNICEF.

Youth as collateral

To counter the effects of the pandemic, governments have racked up immense piles of debt propping up entire sectors, bailing out railways and airlines and essentially nationalising the salaries of a large part of the workforce. In the EU, the government debt-to-GDP ratio increased to 90.7 percent at the end of 2020 — the highest value ever recorded by Eurostat.

The EU is also preparing to issue hundreds of billions of joint debt — some €800 billion in current prices — under a package named “Next Generation EU.” The stated aim of the effort is to boost long-term growth by focusing on high-dividend investments that will transform the economy, by making it more digital and green.

Experts warn that mounting public debt is in effect a tax on future generations. Future resources that could have gone elsewhere will be needed to service it.

“If the state is indebted, it has to pay interests,” said Dr. Wolfgang Gründinger, an ambassador for the Foundation for the Rights of Future Generations, based in Stuttgart. “And the more and more in the state budget is paid for interests, the less free future governments, and hence future generations, will be in their capability to act.”

The exception to this is if the debt is channeled into productive investments, spurring growth and generating more revenues than the cost.

That’s what policymakers say they’re betting on — “Debt exit will happen through growth, through development. This is a bet on good debt,” Italy’s Prime Minister Mario Draghi said — but like all bets, there’s no guarantee that it will pay off.

And if it doesn’t, it will be the young Europeans who will be on the hook for it.