Yahoo Finance ‘Real negative': The young Aussies left behind by recovery
Most Australians have experienced some form of financial recovery from the worst of the COVID-19 downturn, but the recovery risks leaving one particular group of young workers behind.
The unemployment rate has shrunk to 5.8 per cent over February, but according to economics professor at the University of Melbourne Jeff Borland, young Australians who aren’t studying risk being forgotten.
“[There are] groups of workers who still haven’t bounced back as much as other groups of workers and the big group of that is young people who have finished their education,” he told Yahoo Finance.
“Young people as a group aren’t back to where they were last March in terms of proportion employed, whereas older workers have gone back.”
The youth unemployment rate decreased 1.1 percentage points to 12.9 per cent over February as 31,000 young people returned to work.
However, that’s still 0.5 percentage points higher than it was this time last year, and significantly higher than the overall unemployment rate of 5.8 per cent.
At the same time, young, full-time students are actually more likely to be employed now than they were this time last year, Borland noted.
That’s largely due to the fact that the types of jobs full-time students are taking on, like hospitality, have been left vacant by hordes of temporary migrants and international students.
But for fresh graduates and those who chose not to study, the jobs aren’t there.
“The real negative story is that of young people who aren’t full-time students, who aren’t studying full-time or are only studying part-time. For them, their employment population rate is still down about four percentage points on where it was in last March.
“In particular, we know it’s all full-time employment that’s been lost, and we know it appears to be concentrated on people with lower levels of education attainment. I think that’s a really big issue in the labour market at the moment, what’s happening to young people who have left education.
“They seem to be the group being left behind in the recovery.”
Borland’s comments come amid new information from Treasury officials revealing that the Government’s youth-targeted JobMaker hiring credit has only 609 workers enrolled.
That’s despite 15,000 registrations of interest. The program was designed to support 450,000 jobs for workers younger than 35, although critics have described the scheme as ageist and poorly targeted.
Youth unemployment, disillusionment a ‘clear and present danger’
Globally, youth unemployment is on the World Economic Forum’s (WEF) agenda, with a disillusioned youth classed as a “clear and present danger” for 2021.
“Growing societal fragmentation—manifested through persistent and emerging risks to human health, rising unemployment, widening digital divides, and youth disillusionment—can have severe consequences in an era of compounded economic, environmental, geopolitical and technological risks,” Klaus Schwab, founder and executive chairman and Saadia Zahidi, managing director wrote in the Forum’s annual Global Risks Report.
The WEF said young people are entering the workforce in an “employment ice age”, which when compounded with climate change and rising inequality, poses serious challenges.
“The risk of ‘youth disillusionment’ is being largely neglected by the global community, but it will become a critical threat to the world in the short term,” the report’s authors wrote.
“Hard-fought societal wins could be obliterated if the current generation lacks adequate pathways to future opportunities—and loses faith in today’s economic and political institutions.”
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