Gen Z in India and its neighboring countries are facing a staggering jobs crisis, fueling discontent and, in some instances, social unrest. This generation, born around the turn of the century, is encountering a bleak economic landscape marked by shrinking job opportunities and the looming threat of artificial intelligence and automation.

The Scope of the Crisis

The youth unemployment rate in India has been a cause for concern. In 2022, it stood at 23.22%, significantly higher than that of its neighbors such as Pakistan (11.3%), Bangladesh (12.9%), and Bhutan (14.4%). While recent data from the Ministry of Labour and Employment indicates a drop in the unemployment rate to 3.2% in 2023-24, and a youth unemployment rate of 10.2%, other sources present a different picture. Morgan Stanley economists, for example, noted a youth unemployment rate of 17.6%, the highest in South Asia. These conflicting figures highlight the complexities in measuring and interpreting employment data.

Adding to the problem is the issue of underemployment, where individuals are employed in jobs that don't fully utilize their skills or time. Many educated youths are finding themselves in low-paying or unrelated jobs, with postgraduate students even applying for clerical positions. A pre-poll survey indicated that rising unemployment was a foremost concern among voters.

Contributing Factors

Several factors contribute to this crisis:

• Mismatch between education and employment: A significant challenge is the gap between the skills acquired through education and the requirements of the job market. Despite a large number of young Indians holding postgraduate degrees, engineering diplomas, or MBAs, they struggle to find suitable employment.
• Lack of structural change: A structural shift that involved a decrease in the number of workers in agriculture and a rise in construction and manufacturing was interrupted and reversed between 2015 and 2024.
• Automation and AI: The increasing use of automation and artificial intelligence threatens to reduce the number of traditional service-sector jobs, which have historically provided opportunities for India's educated youth.
• Economic growth not translating into jobs: Economic expansion isn't creating enough new jobs to accommodate the millions entering the workforce.
• Social norms and expectations: The preference for "respectable" jobs, such as government or corporate positions, discourages exploration of alternative income streams or entrepreneurial ventures. Part-time jobs or gig work, common for students in Western countries, are often frowned upon.
• Financial constraints: High living costs and unstable job prospects make it difficult for young people to achieve financial independence. Many continue to live with their parents out of necessity.

Gen Z's Response

Faced with these challenges, Gen Z is exhibiting a mix of financial savvy and social consciousness. Many are starting to save and invest early, with some juggling side hustles for extra income. They are also increasingly prioritizing value-based purchases and seeking financial self-reliance.

However, the jobs crisis has also sparked anger and frustration. In Ladakh, violent protests erupted over the lack of clear hiring policies for public sector jobs and the denial of statehood and constitutional protections. These protests, led by Gen Z, resulted in casualties and injuries, highlighting the desperation and disillusionment among the region's youth.

Regional Implications

The jobs crisis and resulting youth discontent are not limited to India. Similar issues are prevalent in neighboring countries, contributing to political instability and social unrest across South Asia. Nepal witnessed a Gen Z uprising against corruption, nepotism, and inequality, leading to the prime minister's resignation. Sri Lanka experienced protests that toppled the government in 2022, driven by young people facing unemployment and economic collapse. Bangladesh has also seen student and youth movements protesting corruption and job shortages.

These events serve as a warning to South Asian governments that failing to address the needs and aspirations of their youth can have serious consequences. Ritual elections and promises of democracy without tangible opportunities are not sustainable.

Looking Ahead

Addressing the jobs crisis requires a multi-pronged approach:

• Focus on skill development: Emphasizing skill development and vocational training to ensure that young people are equipped with the skills demanded by the job market.
• Promoting entrepreneurship: Creating an environment that encourages entrepreneurship and supports small businesses.
• Investing in manufacturing and technology: Increasing investment in advanced manufacturing and technology to create more high-skilled jobs.
• Addressing social inequalities: Tackling social norms and biases that limit opportunities for women and other marginalized groups.
• Sustainable economic growth: Pursuing economic policies that promote inclusive and sustainable growth, with a focus on job creation.

The future of India and its neighbors hinges on their ability to harness the potential of Gen Z. Failing to address the jobs crisis risks turning a demographic dividend into a demographic disaster.