underemployment – the _

[2969] First Love as unfulfilled human potential

First Love is a sad story, with an unsatisfying happy ending. Over the past few weeks, I have slowly rationalized the sadness—why did I feel so sad?—by linking two disappointments together. One disappointment is about unfulfilled love, and the other, which is our focus today, is unfulfilled human potential.

While watching the series in the first week of December, I felt sad quite early, well before I understood how First Love was about unfulfilled love (ignore the title and the song it refers to, as both foretell the story ahead of its narrative arch by too much). I knew the cause of my sadness quickly: both lovers, after growing up dreaming of achieving something great, ended up becoming a building security personnel and a cab driver. They became failures.

Both jobs are unglamorous. The two would not rank highly in things most young men and women would like to do during their mid-life years in any economy.

In the series, there is a subplot where one cab driver laments about the direction of his life. In telling the story of adult Yae Noguchi somewhere in the middle of the series, we are told that she has fallen on hard time: unable to finish university due to an accident, married early, divorced and then forced to give up her son due to relative poverty.

As the series progresses and jumping around the timelines, the sadness intensifies, because… well spoiler if you have not watched me… both of them worked hard to get into a good school. In some ways, those are underemployment, a reality for many.

p/s — happy new year. Speaking of potential, I have further thoughts on output gap and BNM rate hikes. Maybe I will post them just before Thursday, the rate decision day.

[2930] The biggest losers in this recession: the young

All recessions have its losers and to claim so is to state the obvious. It is more interesting to know who the losers are. Data from the Department of Statistics shows that the biggest losers in this recession are the young.

From the chart below, it is quite clear the job market for 35 years old and younger is doing badly relative to the market for older cohorts:

The chart is drawn by comparing total employment by age for each quarter relative to a pre-pandemic benchmark. In this case the benchmark is the final quarter of 2019, the last quarter before the pandemic. To illustrate:

there were 31,800 fewer employed persons among 15-24 years olds in the first quarter of 2020, relative to the last quarter of 2019
there were 202,600 fewer employed persons among 15-24 years olds in the second quarter of 2020, relative to the last quarter of 2019

So, if the number goes down, then it is bad because it shows fewer people are employed relative to the benchmark. If the number goes up, then it is good because it shows more people employed.

The data is from the Quarterly Report of Labour Force Survey. The 2020 fourth quarter report, which is the latest report, was released on February 8 2020.

Increased underemployment among younger cohorts

The change in total employment does not indicate change in employment quality. Here, I am referring to underemployment. Once again, the young are the most badly affected:Unlike in the first chart, an increase here suggests more people working less than 30 hours per week, which could be considered as a definition of underemployment (there are other underemployment definitions). They work less than 30 hours because they are likely unable to work fulltime. Therefore, an increase in this chart points to a worsening situation.

This is relevant because a person is considered employed in official statistics if he or she works for at least an hour per week. As you can see, it is a loose definition. During normal times, it is alright to use it because it works. But the situation we are in are quite abnormal and it challenges our traditional definitions.