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Can virtual labor mobility heal scars of youth job insecurity?
Indonesia has an opportunity to use its G20 presidency to initiate cooperation in virtual labor mobility as a means to counter the future "scarring effects" of job insecurity stemming from today's learning loss.
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A journalist watches a Statistics Indonesia (BPS) virtual press conference while working from home on March 16, 2020. (JP/Wendra Ajistyatama)
Both developed and emerging economies have been experiencing the longer-term impacts of the COVID-19 pandemic on skills and work, particularly among young people. Through its Group of 20 presidency this year, Indonesia will facilitate cooperation on global economic recovery, such as by curing the scarring effects of the pandemic to secure future growth.
Given the invaluable opportunity to lead the forum, bringing this issue to international attention could strengthen Indonesia's role in promoting inclusive recovery and avoiding prolonged harm to the wellbeing and productivity of the younger generation.
Amid the social restrictions to control outbreaks, school closures resulted in more than 1.7 billion children left out of face-to-face learning globally, according to a June 2020 study from the Organisation for Economic Co-operation and Development (OECD). Such disruption has caused learning loss (PNAS, April 2021) and upended education systems (OECD, 2020).
Meanwhile, lockdown measures also forced employers worldwide to shift abruptly to remote work (Forbes, December 2021). Accordingly, the virtual workforce emerged, posing greater challenges for youth.
On the one hand, the shift to remote schooling around the world impedes the education system in providing the skills demanded in the market. On the other hand, as the new virtual workforce is projected to “stick” (NBER, April 2021), economies are also grappling with creating jobs that correspond to this new type of labor force. Eventually, a skills mismatch is likely to occur post-pandemic (UNICEF, July 2021).
A labor market crisis is looming for the next generation if the scarring effects of unemployment and job insecurity (SAGE Journals, May 2020) are overlooked. According to a World Bank press release, learning loss caused by this upheaval could cost current students almost US$17 trillion in lifetime earnings, or about 14 percent of today's world gross domestic product.
The rise of the virtual workplace has some further drawbacks. Due to its nature that relies heavily on technology and digital infrastructure, remote work is susceptible to exacerbating “preexisting inequalities in the labor market” (Journal of Population Economics, September 2020). This is especially so between low- and high-skilled workers (NBER, April 2020) including those with better or poorer access to information, digital infrastructure and institutions, both within and across developing and developed countries.
