This recession has not spared Australia's youth. Nothing could be further from the truth
When a recession hits, being young is not a place you want to find yourself – as everyone during the early 1980s, 1990s, and GFC found. Every recession always hits the youngest hardest, but what also happens is a dramatic change in both working life and outlook for those who before the recession had the future seemingly all nicely planned.
Recessions may differ due to cause and also to recovery; but one thing is always clear – full-time employment never recovers, and for workers from 19-24, work never recovers as fast as it does for those older.
A quick look at the underutilisation rates since March might give the impression that young workers haven’t done too badly during this pandemic recession.
Yes, as ever they were the first sacked and thus their underemployment and unemployment rates soared the most, but rather astonishingly, the underemployment rate for youth workers is now lower than it was in March:
And yet the unemployment rate for young workers has risen more than for older ones.
It’s a curious state of affairs that comes about mostly because unlike older workers, a majority of youth work part-time.
In October there were actually 4,600 more people working part-time than in March, by contrast there were 228,000 fewer people working full-time.
So a greater increase in part-time employment will inevitably reduce underemployment for younger workers and raise it for older people because younger workers are more content with such work.
But let us not begin to think young workers should feel content – as though the recession has “spared” them. Nothing is further from the truth. The fall and the recovery of employment has been the biggest for young workers, but the overall loss of employment also remains greatest for those under 25:
It is even more stark when it comes to full-time employment – the number of men aged 20-24 employed full-time has fallen 6.9% since March compared to 1.9% for men aged 25-64. For women aged 20-24 the fall was just over 10% compared to a 2.8% fall for those aged 25-64.
And this is the major worry for young workers, and why the government’s jobmaker hiring credit is misguided.
It does not assist prime-aged workers who also see a drop in full-time ongoing employment, and it mostly drives a shift toward temporary and lowercost employment for those under 35, while not really addressing youth workers who have never been considered above 25.
Indeed recessions treat those in their 20s quite differently dependent upon whether they are in the first or latter half of the decade.
Consider that after the 1990s recession it took a full nine years for the level of employment of 25-29s to return to where it was prior to the recession, but at that point there were still 3% fewer 20-24 year olds employed than before the recession:
Again it is even worse when we look at full-time employment.
Up to the 1990s recession, those in the early and late 20s were equally as likely to work full-time. But the recession saw full-time work for those in their early plunge – and it kept falling until the GFC when another plunge occurred:
The good thing for those in their early 20s after the 1990s recession is that by the time they reached their 30s they were almost as likely to be working full-time as were those who were born a decade earlier than they were.
But since the GFC full-time employment for those even in the late 20s and early 30s has declined – especially so for men:
And it goes to the concern for young workers right now. They have, as ever, been hit hard by the recession, but the past decade suggests full-time employment is less likely than in the past to return to previous levels even once the recession is past.
What has previously been the saviour has been education.
Over the past 30 years, there has been a massive shift towards those after high school going into some form of tertiary education (even if still doing some work) rather than just going straight into work:
And the reasoning is obvious when you look at the employment rates by highest education attainment. There is a clear link between tertiary education and employment and full-time work:
This is where today’s 15 to 19-yearolds must feel like they have been the subject of a sick joke. Not only has the pandemic caused major havoc with their final years of high school, and taken away the chance to travel for any gap year or overseas work, the government has decided now is the time to change funding for universities.
Where in the past university was viewed as a smart choice in the face of a recession, now for most humanities students the fees will more than double, while for Stem students, because funding overall has been cut, it likely means fewer places will be available.
All in all that leaves those in their late teens and early 20s in the most precarious position of anyone in that age group since the 1990s, but they face much higher tertiary fees than those Gen-Xers ever did.
And to truly rub it in, once they do enter their 30s, they have a much lower likelihood of ongoing full-time employment.