IMF: A record 1.2 billion young people will enter developing-world labor markets over the next decade

In a quiet student council office on an overcast May afternoon, Saharat Chuaikaew is overseeing King Mongkut University of Technology Thonburi's societies and sports teams database. As an engineering student at one of Thailand's leading technology universities, Chuaikaew also works as an intern at an energy drink factory, juggling a STEM degree, a manufacturing internship, and 15-hour-a-week volunteer IT work.

A decade ago, he might have anticipated starting his career at the drinks producer, learning the trade from an experienced engineer. However, today, he is doubtful about finding a job, as complex tasks can now be outsourced to free AI models, diminishing the need for many entry-level technical roles.

Thailand's Technology Act of 1971 consolidated several colleges into KMUTT to produce highly skilled graduates amid technological advancements. At the time of the merger, there were approximately 500 million young adults entering the workforce across emerging market and developing economies globally. Chuaikaew was just weeks away from graduating into the most crowded job market ever recorded, with over 1.2 billion people expected to join the labor market in developing economies over the next decade.

Gen Z graduates in Southeast Asia, like Chuaikaew, face a weaker economy compared to previous generations. Global growth is roughly a third lower, and governments have fewer policy tools at their disposal due to increased uncertainty. Factors such as pandemic-era inflation, Russia's invasion of Ukraine, and recent energy market volatility have contributed to soaring living costs. In Thailand, about 60 percent of oil imports come from the Persian Gulf, exacerbating the situation.

The frustration over youth unemployment has fueled protests across various countries, with Sri Lanka, Indonesia, and India witnessing fuel price hikes, falling purchasing power, and a chief justice likening unemployed graduates to "cockroaches." IMF research indicates that youth unemployment is elevated across Asia, with the highest rates among highly educated individuals. In Thailand, 3.9 percent of people aged 15–24 were unemployed last year, but the rate among Thais with postsecondary education was 13.2 percent.

Artificial intelligence has the potential to drive growth and productivity gains, but its rapid adoption may intensify labor market pressures for young workers if skills do not keep pace. The situation has sparked concern among students and academics at KMUTT about the future of highly skilled workers in Southeast Asia. Many worry that AI could reduce job opportunities for those with advanced education, affecting various sectors, from creative economy studios in Bangkok to factory production lines where Chuaikaew works.