Finance Federal Budget Decade of disadvantage: Government urged to deal with youth employment crisis

Decade of disadvantage: Government urged to deal with youth employment crisis

youth employment
Youth employment is still behind its pre-pandemic level. Photo: TND
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Young workers face a decade of disadvantage unless the Morrison government uses the May budget to address a surge in youth unemployment, experts have warned.

About 108,000 fewer Australians aged 15 to 34 have jobs today than a year ago, and although the overall jobless rate is within 0.4 percentage points of its pre-pandemic level, it’s still 0.7 points higher for those aged 25 to 34.

Economists fear the sluggish recovery for younger Australians could devolve into another decade of disadvantage for workers who are still feeling the negative effects of the global financial crisis.

With JobKeeper now retired and JobMaker falling flat with employers, the Morrison government is now being urged to step things up in the budget.

Mission Australia chief executive James Toomey said governments must do more than hand out money to businesses that employ young workers and develop a national strategy to tackle the crisis.

“It’s important for the government to outline a strategy to make sure young people have opportunities,” Mr Toomey told The New Daily.

“There’s a lot more in supporting young people in returning to the workplace … than just providing a little bit more money to employers.”

Young Australians falling through the cracks

Compounding fears that a lost generation may be emerging after COVID-19, Mission Australia analysis published this week found an increasing number of young people missed out on education last year.

The proportion of those aged 15 to 19 who said they weren’t studying increased by about a third to 6.8 per cent – a figure that jumped to 12.2 per cent among teenagers with two unemployed parents.

The report, based on a survey of more than 25,000 young people, also found the number of 15-to-19-year-olds engaged in full-time study had fallen from 93 per cent to 86 per cent.

Leading youth education experts have previously told TND that pandemic-related disruptions to education and training for young people are likely to have long-lasting effects on their future economic security.

Callam Pickering, APAC economist at Indeed, said the same is true of the labour market.

Mr Pickering told The New Daily young workers were still overcoming the effects of the global financial crisis when the pandemic first hit.

“There was a reduced number of jobs that were actually suitable for younger people, and when those jobs were created younger people were competing against older and more experienced workers,” he told TND.

“They were getting squeezed out of those opportunities, and that’s probably something that happens quite frequently with these downturns and recessions.”

Research by the Productivity Commission has found that earnings for young Australians took years to recover after the 2008-09 crisis, and that recessions lead to an uptick in casual and insecure work more broadly.

Government urged to go further on skills reform

The government acknowledged the issue of high youth unemployment in the October budget and announced two programs in response: JobMaker and JobTrainer.

The former, a hiring credit designed to encourage businesses to hire workers aged under 35, has come under fire in recent weeks after government figures revealed just 609 jobs had been created.

Treasurer Josh Frydenberg has pledged to ‘tweak’ JobMaker in the May 11 budget, but he is not expected to pursue an ambitious overhaul of the $4 billion program despite experts warning that such changes are needed.

JobTrainer, meanwhile, has recently been extended, and is expected to support the creation of tens of thousands of roles, particularly in trade apprenticeships that have experienced declining enrolments for years.

But Equity Economics lead economist Angela Jackson said the government will need to do more, particularly because closed borders mean Australia has no access to thousands of skilled migrants.

“[Vocational education and training] is a policy space that hasn’t addressed a lot of the issues at play, and it’s probably not delivering for people the way it needs to,” Dr Jackson told The New Daily.

“We need to be thinking a lot more about how we deal with service industries and training as well. Often we focus on manufacturing or trades issues, but really the service sector is such a huge part of the economy.”

On this front, all eyes will be on the government’s promised overhaul of vocational training funding arrangements with the states.

Minimum wage boost vital for young workers

The budget isn’t the only policy priority for young people.

The Fair Work Commission (FWC) is in the process of working out whether to increase the mandated minimum wage later this year, with unions arguing a sizeable increase is particularly important for young people as they are more likely to be in low-wage jobs.

The Australian Council of Trade Unions is calling for a weekly increase of $26.38 (3.5 per cent), while employer groups have called for a freeze and the federal government has urged the FWC “to take a cautious approach”.

ACTU president Michele O’Neil said the government’s position didn’t stand up to scrutiny.

“The Morrison government can’t have it both ways,” Ms O’Neil told The New Daily via email.

“They’re talking up the economy, [saying] the recovery couldn’t be going better. But when working people ask for a fair share of that recovery, suddenly it’s unaffordable.”

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