In the Hiring Line

What are the facts on youth unemployment in Australia?

Since the Global Financial Crisis, Australia has faced three major problems that are interconnected: slowing economic growth, skilled labour shortages in multiple sectors and a high rate of youth unemployment. 

In 2014, ABS Labour Force Survey data showed youth unemployment in the 15-24 cohort to be at 27.17% nationwide. 

One year later, more than 290,000 Australian youth aged 15 to 24 were categorised as unemployed, 160,000 of those surveyed aged 15-19 were in an unemployed position. (Source)

"One in five unemployed Australians today is a teenager."

Sadly, this trend is nothing new when overseeing employment data conducted over the last ten years. Young people aged 15-19 consistently have high unemployment rates when compared to 20-24 year-olds and adults aged 25-64. Both young and old adults are being affected by the same factors which drive unemployment: a slowdown in the growth of aggregate demand. 

Almost a quarter of youth unemployed have been in the same position for one year or longer. Considering they have only been in the labour force for a short period of time and are just starting out, this is a very high proportion. 

The National Centre for Social and Economic Modelling report recently concluded that living standards for the most disadvantaged groups in Australia will decline over the next 10 years.

According to the report, slowing economic growth and rising inequality will occur despite improving living standards for all income levels since 2004. The key issue was a disparity in the rates of growth experienced between the income levels, with disadvantaged groups often being left worse off.

Data and figures collected from the Australian Bureau of Statistics based around the 2015 federal budget predicted the standard of living for all Australians to slightly rise by 1.7% (0.2 per annum). For the bottom 20% of households, living standards were set to decline by 5%.

"Australia has reached a watershed. We can continue to walk away from many of the most vulnerable and the most disadvantaged among us, as the research shows, or we can commit now to ensuring our economy and our society gives everyone a fair go."~Kasy Chambers, Anglicare Executive Director

In relation to youth unemployment rates, the worst has probably come and gone. 2014 saw an increase in unemployment rates, however this was mainly due to a larger workforce looking for work.

This new influx of workers cam in around the same time as youth employment figures were rising, with many counted as unemployed on entry.

Labor market conditions have improved in the last eighteen months due to youth participation within the market. The ABS shows than more than 55,000 young people have been added to the labour force in the past year, including a net addition of 28,000 workers.

Jobseekers in their early 20's fare much better with more than 35,000 net job openings in the last nine months, leading to an all-time record high employment figure of 1.2 million workers aged 20-24.

There have been a list of suggestions that may eliminate the barriers to employment to improve the situation:

   - Allowing workers the ability to work outside the traditional 9-5 structure
   - Supporting new markets and disruptive technologies that
     could encourage further entrepreneurial projects from young & innovative
     creators.
   - Less restrictive planning laws that add and encourage demand for young
     workers in trades/skills based industries (construction, manufacturing etc.)

"There is a silver lining in the youth unemployment issue. 

The increasing number of young Australians looking for a job should send a loud and clear message to both state and federal politicians for a shake-up in the workplace regulations and the competitive environment.

Let the kids work...and they will." ~Dr Patrick Carvalho, Research Fellow at the Centre for Independent Studies.

Sam Murden is a recent journalism graduate from Charles Sturt University in Bathurst and has had articles published in the Australian Financial Review and the Business Review Weekly. He is currently unemployed.