Youth unemployment for 15-19 year olds is at a 15-year high

By Graeme Wells, University of Tasmania and Veronica Sheen, Monash University
Catch up on Q&A from 29 July. Source: http://www.abc.net.au/tv/qanda/

This week, our experts examine the two most popular Q&A Twitter requests: can we trust Treasury, and how high is youth unemployment?

Josh Frydenberg: youth unemployment for 15-19 year olds is at a 15-year high

“For 15- to 19-year-olds who are out there looking for full-time work, we’re at a 15-year high – it’s more than 20%.” – Liberal MP for Kooyong, Josh Frydenberg, Q&A, 29 July. (Watch the segment on youth unenmployment and boot camps here).

The current full-time unemployment rate (that is, people looking for full-time work) for youth aged 15- to 19-years-old is 27.3%, according to the June 2013 ABS Labour Force Data.

That is the highest rate for 15 years, when it hit 29.7% in 1998. The lowest level of youth unemployment was in 2008 when it fell to 15.5%.

So Frydenberg is correct.

For most of the last 15 years, the 15- to 19-year-old full-time unemployment rate has hovered just over 20%. However, in just five years the youth unemployment rate has significantly increased.

But a lot of care needs to be taken in interpreting full-time youth unemployment rates. For a start, the total numbers are quite low. Currently there are 64,000 15- to 19-year-olds looking for full-time work, up from 49,500 in March 2008. So the increase in unemployment amounts to a total of 14,500 people.

While this should be of concern, changes in low numbers translate to large changes in percentage terms. Keep in mind the total size of the Australian labour force is 12,368,000 and the labour force for 15- to 19-year-olds is 810,400.

The overall unemployment rate for 15- to 19-year-olds, which includes those looking for both part-time and full-time work, has increased from a low of 12% early in 2008 to 16% in 2013. That’s an increase of 24,000, from 105,000 to 129,000 at present.

There are other concerns with the youth unemployment figures.

Not only has unemployment increased for 15- to 19-year-olds, there has been a decline in labour force participation for 15- to 19-year-olds over the past five years. From a high of 60% for most of 2008, it is now 54.6%. This means that there has been a withdrawal of young people from the labour market, either looking for work or in work.

It is often the case that if unemployment increases, people will withdraw from looking for work because of discouragement.

So how do we interpret what is going on in the youth labour market?

Of course, unemployment generally has been steadily increasing. At June 2013, the overall unemployment rate was 5.7%, up from 4.2% early in 2008. But this doesn’t sound so bad as the large increases in youth full-time unemployment.

So the forces that are affecting overall unemployment are showing up as particularly pernicious for young people. There is a growing concern about increased unemployment across the community and the effects on particular groups, including our youngest workers.

Verdict
Josh Frydenberg is correct. – Veronica Sheen
The Conversation is fact checking statements made in the lead-up to this year’s federal election. Normally, these are reviewed. But each week, we will also check significant factual assertions on the ABC’s Q&A program. To allow us to publish these checks as soon as possible, there will be no review process.Request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.Graeme Wells has no affiliations or research funding which give rise to a conflict of interest in relation to this article. He is not a member of a political party. Veronica Sheen does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

The ConversationThis article was originally published at The Conversation.  Read the original article.

LTU-LogoLong-Term Unemployment Conference 2014

A national conference focusing on at risk groups for Long-Term Unemployment will be held on 18-19 August 2014, QT Hotel Surfers Paradise
URL: www.longtermunemployment.org.au    Ph: (61 7) 5502 2068
An  initiative of the Australian and New Zealand Mental Health Association, an   incorporated non-government, not for profit organisation.
Call for papers for the Long Term Unemployment conference are now open, papers on youth employment, youth unemployment, boot camps
and other initiatives will be well received by our delegates
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