Australian society is failing its youth and setting itself up for economic disaster. The persistent rise in youth unemployment will reverberate across the economy for decades to come, potentially reducing productivity and limiting creativity and innovation.
“It’s a disaster for our young people who want to work but are getting locked out of the workforce and locked into welfare dependency because they have no choice. It’s a disaster for communities, leading to more homelessness and despair for young people and their families. And it’s a disaster for the national economy and for taxpayers who will end up paying the bill.”
The increasing incapacity of our economies to provide sufficient work in hours and quality to meet the requirements of our youth is one of the major characteristics of the neo-liberal era. It is a deliberate, policy-induced outcome – that is, governments are squarely to blame for the malaise. At a time when neo-liberals use rising dependency ratios to justify their attacks on budget deficits but then fail to realise that our unemployed youth are a major casualty of the fiscal austerity – that is, our future workforce. The scourge of youth unemployment is condemning our future workers to a low-wage, unstable and unproductive employment history.
The Prime Minister Tony Abbott’s claim that the solution to the escalating crises of youth unemployment is tough love, is further evidence of the shallowness, hollowness and ideological rigidity of the Abbott Government’s social policy agenda.
Speaking to a business forum organized by Rupert Murdoch’s Newscorp and Woolworths to find solutions to youth unemployment, the Prime Minister claimed that tough love was an answer to youth unemployment.
The Prime Minister’s comments came in the same week that the ABS released a report showing that the number of young people facing long-term unemployment has tripled since the 2008 global depression.
The ABS report shows that there are currently 257,000 unemployed young people (aged 15 to 24) across Australia, and more than 50,000 have been unemployed for longer than a year. The average duration of unemployment has risen sharply. In 2008, young people spent an average of 16 weeks looking for work, but by 2014, that period had risen to 29 weeks.
Of course, ABS figures are misleading and significantly underestimate the problem, as they are based on definitions which are narrow and miss many people who are unemployed and underemployed.
The definitions of unemployment and employment are deliberately designed to keep people out of the official unemployment statistics.
A Brotherhood of St Laurence report shows that youth unemployment is not uniform across Australia, and there are significant variations between states and territories, and, within states and territories. Significant “hotspots” of youth unemployment exist in Australia where youth unemployment may be as high as 25%.
As Callum Pickering points out these troubling figures seriously underestimate the seriousness of the situation. Pickering highlights the declining participation rate which is at its lowest level since 1978.
Pickering notes that:
The rapid and sustained decline in youth participation since the global financial crisis is larger than during the early 1990s recession…..the decline is more likely to reflect young Australians becoming discouraged by rejection or limited opportunities and giving up on finding a job. This is first and foremost a failure of Australian industry and the labour market itself rather than something specific to young Australians… With the labour market for young Australians continuing to deteriorate, Australia is creating a generation of youth who will be less skilled and experienced than the generation that precedes it.
Economics Professor Bill Mitchell describes the state of the labour market for young people and teenagers in particular, as parlous. Mitchell writes that the labour market is a ‘lock out” for teenagers and young people.
Mitchell describes the huge attrition of full time jobs for young people and teenagers as a result of sluggish employment growth and the failure of employers to employ the least experienced and most disadvantaged.
Mitchell argues that youth unemployment is a deliberate, policy-induced outcome. For Mitchell, youth unemployment is ‘the crowning glory of the neo-liberal infestation’.
You can read more of Colin Penter’s work here: