The youth unemployment ‘crisis’ is about job quality

Australian Business Review

Calls for action on youth unemployment this year have typically been accompanied by references to “alarming” data from the Australian Bureau of Statistics (ABS).

Figures for early 2015, for example, point to more than 300,000 unemployed youth (aged 15-24), including more than 60,000 who were long-term unemployed, and a youth unemployment rate that had jumped to over 15%. Though these figures have since fallen back a little, concern about a “crisis” of youth unemployment remains high, with two conferences on youth employment planned before year-end.

Like generals still fighting the last war, most commentators seem trapped in the recession of the early 1990s. They overlook at least two long-term developments that cast a different light on the standard ABS data on youth unemployment.

The first development is the increased participation of youth in full-time education, often combined with participation in a part-time job. The percentage of the total youth cohort made up of full-time students has risen steadily from around 30% in the mid-1980s to 53% in August 2015 (ABS). This growth is in turn accompanied by an increased propensity to take up a part-time job; in the mid-1980s one in four full-time students was counted as employed, but now the figure hovers around 40%. The trends are familiar, but the implications for the unemployment count are rarely noticed.

The second development is the increased importance in youth labour markets of part-time jobs that do not offer enough hours to meet needs – what is called “(time-related) underemployment”. This has become a prominent feature of Australian labour markets, affecting the lives of both non-students and students.

Underemployment measures discontent with the number of hours in the current part-time job (and by implication with the income in the job), but it can be taken as the tip of the iceberg for a more general problem of poor quality or precarious jobs, which push young people in and out of work and offer little prospect of long-term skill development and income security.

Is there a “crisis” of youth unemployment? The data summarised here tend to puncture this extravagant claim (though they confirm a modest problem with a small group of long-term unemployed). Instead they suggest we need to focus on a more slow-burning crisis for youth – a challenge for the new Turnbull ministers.

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