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Economy

Jul 15, 2014

‘I want to work’: youth unemployment on the rise

Australia's youth unemployment has hit 13.5% and is still rising. Is the minimum wage holding Australia's young people back -- or is it the one thing they have to fall back on?

Australia’s unemployment figure has remained remarkably stable in recent years, with the job market not looking apocalyptic for most. That is, of course, unless you’re under 25.

Behind the headline figure of 6% unemployment last week was the news that the youth unemployment rate had risen to 13.5%, and experts and business say it should be addressed to mitigate possible long-term effects for the economy. Australia’s rate of youth unemployment is above the worldwide average of 13.1%, and of the 734,000 Australians between the ages of 15-64 looking for work, people between the ages of 15-24 are over-represented at 280,500.

Dr Veronica Sheen, a research associate at Monash University, says the lack of jobs hits younger people harder than others in the workforce. “Because there’s more applicants than jobs, employers can pick and choose and not worry about training a young person or an older person who needs re-skilling, they can just pick and choose among people who already skilled.

“There’s just insufficient jobs, and when young people are just starting out there’s more barriers to employment, there’s less entry points.”

Jeff Borland, an economics professor from the University of Melbourne, says just like in the 1980s, a high level of youth unemployment can have long-reaching effects. “We know that people who start their time in the labour market with periods of unemployment — it can have adverse consequences for them later.”

Kate Carnell, CEO of the Australian Chamber of Commerce and Industry (ACCI), says “it should worry all of us. We know that people who are unemployed at 25 are much more likely to be unemployed at 35 and 45, so it’s important as a society that we look at ensuring that young people are job ready and make sure that there are affordable jobs available.”

Both Sheen and Borland say that programs such as the government’s proposed six-month waiting period for people under 30 to receive welfare won’t address the softening labour market. “The fundamental problem is that we just don’t have enough employment. You can try to give supposed incentives to get people back in employment by taking the dole away or making them work for the dole, but unless you have employment growth, everything is tinkering on the edges,” said Borland.

Carnell says that business is waiting to see detail of the policy, but she emphasises “there needs to be good safety nets in place, so people aren’t falling through the cracks”.

New Family First Senator Bob Day told the Weekend AFR on Saturday that young people were restricted from looking for work by penalty rates and the minimum wage. He said those who were “not very well educated, they’re not very intelligent, they’re not particularly savvy, they’ve come from the wrong side of the tracks, they’re not particularly good looking” should be able to offer their services at a cheaper rate than others to get a foot in the door.

Sheen and Borland warn against lowering the minimum wage, saying it actually removes incentives to work. Sheen says it also has knock-on effects for the economy: “It’s a dangerous way to go. It undercuts living standards, it goes through the economy, and people have less spending power”.

Carnell points to a skills mismatch between young people leaving university and what is needed by the workforce, making it difficult for employers to invest in younger workers. “One of the dilemmas of having one of the highest minimum wages in the world is that young people aren’t inexpensive to employ — I’m not suggesting they should be — but because they’re reasonably expensive they have to job ready, the capacity to be trained on the job is not there because rates are too high.”

Young people agree that employers aren’t interested in taking time with inexperienced employees. Helmy Afamasaga Faletolu is 22 and has been looking for a job since 2012, when she completed a certificate IV in financial services. Although she also has a certificate IV in business administration and has trained for medical reception work, her lack of experience is a barrier at interviews. She says tougher policies to get young people back to work are understandable.

“Working is good because you’re earning and spending on yourself and your family. It can be a little difficult to understand, but in a way they’re right, and that’s what I’m going to do: I’m going to get a job. When I hear that stuff I kick myself because I want to work,” she said.

The ACCI is also campaigning to lower penalty rates to give younger workers more access to the workforce.

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17 comments

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17 thoughts on “‘I want to work’: youth unemployment on the rise

  1. SusieQ

    Did Bob Day really say that? People who are not good looking? What, theres an attractiveness test now?? Perhaps we should put one in place for the Senate……

  2. Matt Hardin

    I well remember the comments about inflationary wage rises by business groups as unemployment fell below 5%. The whole system is set up for unemployment at the current level or higher and as such it is wrong to blame the victims.

  3. Robert Jameson

    In 2006, shortly after the introduction of the 457 visa, I moved from SA to Mackay in QLD, to set up an overseas recruitment business. The business went OK but suffered a major setback in 2008. As a result of the GFC the Dept of Immigration placed a temporary moratorium on the processing of 457 visas. I recall sitting in the office of one of my clients and telling him I could not tell him when his machine operator would be arriving from the Philippines – and then suggesting that he might like to try putting on an apprentice. The reaction I got was quite unexpected. In no uncertain terms I was told; “I have been in this business for 30 years, I know what I want done, how I want it done, when I want it done and how much I can pay to have it done – I do not want to spend my whole day arguing with some dumb ass kid, who knows nothing, about how he want to do the job – JUST GET ME SOMEONE WHO CAN TAKE INSTRUCTION!!!!”
    Do I need to explain further why school leavers are not getting jobs?

  4. fractious

    “Do I need to explain further why school leavers are not getting jobs?”

    Plenty enough “explaining” – what you need to demonstrate is how your one example applies to 13.5% of the workforce.

  5. paddy

    Ahh Bob Day. An ugly bloke with an uglier mind, who made millions in the building trade.
    Being a millionaire, naturally gives him *very* deep insights into the problems of paying workers too much.
    What a treasure he’s going to be in the Senate. Grrr!

  6. Robert Jameson

    <<>>

    I thought the 13.5% unemployment would be explanation enough. If not then look at our public education system that will not allow teachers to control their students. The Education system regards control as a “dirty word” – students they say will “control their own learning.” As a teacher my job was to oversea a rabble – in the one year I was a teacher I did not teach a single kid anything.

    The problem is, in the work place, the boss wants to have control – the school leavers see the boss as the authority figure they can treat like $hit – it does not work.

    It is okay though for those parents who can afford to send their kids to private school – there is no competition from those scumbag kids from working class schools. But in the long run we will all pay for that stupidity.

  7. PaulM

    Fractious, I think the point of Robert Jameson’s comment was to ilustrate that Australia’s management skills aren’t as well developed as they should be, in much the same way that those same managers complain that young people aren’t job ready. I wonder how that employer’s busines is coping now, after an extended period of the high dollar, if his idea of managing is “giving instruction”.

  8. Kevin_T

    Good to see Kate Carnell’s concerns on this subject. I don’t suppose she could convince members of the Australian Food and Grocery Council, that those checkout jobs which once were used as a stepping stone by some youth into the employment cycle, may be more beneficial to the future of this country than rows of electronic self serve checkout machines.

  9. Robert Jameson

    “I wonder how that employer’s busines is coping now, after an extended period of the high dollar, if his idea of managing is “giving instruction”.”

    He is doing fine. He is a successful in business because he knows his trade (hydraulics). Most of his employees have enough brains to recognize the fact that “the boss” knows what he is on about and are happy to learn from him. He is is willing to take feedback from his workers who he knows have been around for awhile but has no time for kids who do not listen, are undisciplined and seem to want to “have fun”.

  10. MJPC

    Bob Day is full of crap!
    My son left school last year, keen to work. Took a job delivering heavy goods at a basic wage.
    I am glad he did because he saw the dark side of exploitation- required to handle and move goods way above safe lift weights without assistance, unpaid overtime, no meal breaks. The final straw being pulled over by Police and almost losing drivers license in works vehicle with an incorrectly stowed load, found this not the first time the owners had been warned they were no corrying per the requirements.
    I knew the owners before my sons employment and they were always complaining either their employee’s were lazy or didn’t last long or they couldn’t get any.
    As always there are 3 stories: Their story, my son’s and the truth. To save his health and wellbeing I recommended he resign which he did.
    Obviously this government would see him as some lazy youth, however his parents could not countanance he being physically damaged for life being paid a crap wage and being exploited earning it.