Young Australians Struggling to Break Unemployment Cycle

Blaming young unemployed Australians for failing to secure work is “simply not supported by the facts”, according to a new report which said they tried just as hard as older jobseekers to gain employment.   

The Brotherhood of St Laurence (BSL) released its report, Reality Bites Australia’s Youth Unemployment in a Millennial Era, on Monday, using data from the longitudinal Household Income and Labour Dynamics in Australia (HILDA) survey to fact-check claims young people were to blame for difficulties finding work.

The report found that young people actually were actively engaged in job-hunting.

“[We] fact-checked the proposition promulgated in some quarters that higher unemployment rates for young people could in part be due to their being less active in looking for work,” the report said.

“Our analysis showed, however, that unemployed youth have consistently undertaken just as wide a range of job search activities as unemployed people aged 25 and over. Blaming young unemployed people for their predicament is simply not supported by the facts.”

Examining the HILDA data, there was found to be “little difference between young people and older jobseekers in the range and distribution of job search activities”.

“Some 73.2 per cent of unemployed youth applied for a job in the four weeks before the interview – not lower, but slightly higher, than the 72.1 per cent observed for people aged over 25,” the report said.

“On the type of job-search activities, young jobseekers were more likely to be registered with Centrelink (53 per cent) than older jobseekers (43 per cent).”

The report also found substantial differences between the reasons identified by young and older jobseekers for failing to secure employment.

“Some 41.3 per cent of unemployed 15 to 24 year olds report lack of experience as a barrier to finding a job, compared with 25.9 per cent among jobseekers aged 25 and over,” the report said.

“Lack of education (32.9 per cent compared with 26.9 per cent), and transport barriers (29.6 per cent compared with 19.6 per cent) were among the other factors more often reported by young jobseekers than by older jobseekers.”

But even though many young unemployed people were looking for work, 267,000 Australians aged 15 to 24 remain unemployed.

The youth unemployment rate in October this year hit 12.4 per cent, which is more than double the overall unemployment rate of 5.5 per cent.

Added to this, almost one in five young unemployed people (18.4 per cent), have been unemployed for over a year – which the report puts down to the after effects of the global financial crisis (GFC).

“The disruptive impact of the 2008 global financial crisis remains a defining event in the trajectory of Australia’s youth unemployment story,” the report said.

“Youth unemployment – persistently high in the long wake of the GFC – is stifling the progress of too many young Australians as they attempt to make their transition to independent adulthood.

“At September 2017, 50,500 young people had been unemployed for at least a year. This is more than three times the number before the GFC. Among all unemployed youth, those who are long-term unemployed make up 18.4 per cent of the total.”

Tony Nicholson, BSL’s executive director, said policy makers needed to consider the risk youth unemployment posed for the emerging generation.

“Being long-term unemployed when a young person is making the key transition to independent adulthood poses a threat to their future economic and personal wellbeing,” Nicholson said.

“Yet, this is the reality many of our young people face, especially in disadvantaged suburbs and rural and remote regions.

“More broadly, it worries me that our social security payments for our unemployed people – both the Youth Allowance and Newstart – are now so low that this is hindering unemployed people’s hunt for paid work, for example to be able to afford transport or appropriate clothes to attend job interviews.”

With the Newstart base rate sitting at $38.48 a day for a single unemployed people without children, Nicholson said a raise in these payments was necessary.

“These very low payments need to be addressed as part of a considered response to youth unemployment,” he said.

The report concluded that a new approach to tackling youth unemployment was needed.

“Young people must be equipped with the networks and adaptive capabilities they need to take up new work opportunities, and provided with the knowledge they need to navigate the evolving labour market.

“Investment in economic development and job creation at local, state and federal levels is needed to create opportunities for young people now and in the future.”