Young workers hit by rising unemployment
It’s not only Europe where teenagers are bearing the brunt of rising joblessness – Australia has a youth unemployment problem of its own.
From February 2008 to December 2011, the number of jobs held by 15- to 19-year-olds shrank by 92,200, despite a gain of 623,600 for the whole market in that period, according to an analysis of Australian Bureau of Statistics data. In December alone, 18,500 teenage jobs were scrapped, or about 63 per cent of all jobs lost in the month.
And the teenage unemployment rate has jumped over the period, rising to 17.3 per cent last month, up from 16.3 per cent in December 2010 and 13.6 per cent in December 2008. In contrast, the overall jobless rate stood at just 5.2 per cent in December.
University of Newcastle director of the Centre of Full Employment and Equity Bill Mitchell said the youth employment numbers “made a mockery” of politicians’ and market economists’ claims that Australia was close to full employment.
“Teenaged workers are being locked out of the labour market now and not gaining skills,” Dr Mitchell said. “In this current recovery, the teenagers have been going backwards.”
Retailers cut young staff
Dr Mitchell said the lack of demand in the economy meant employers were less likely to take on younger staff who would require more training. Also, the areas that traditionally employed young people, such as retail – the largest private sector employer – construction and technical trades have been hit hard by the weakness in the economy and its structural change.
Retail trade employed 239,100 people aged 15-19 in 2008, which has fallen to 215,500 in 2011, ABS data show.
Over the same time, the number of teenagers employed in construction fell from 68,700 to 59,300. For manufacturing numbers fell from 54,300 to 41,400.
Last year was marked by subdued spending by consumers, amid increased uncertainty, as well as the collapse of booksellers Borders and Angus & Robertson, and the Colorado clothing chain. Consumers have shifted away from traditional in-store shopping in favour of using their strong dollars to shop online from overseas sites.
Construction activity has slowed to a crawl through 2011 amid interest-rate uncertainty and the slump in borrowing by households. Manufacturing has also withered after the dollar punched through parity with the greenback, making Australian exports less attractive on global markets.
The longer-term contraction in teenage jobs occurred as the broader economy generated no net jobs in 2011, the weakest annual pace since 1992.
ANZ economist Katie Dean said part of the problem for younger workers might be that existing employees were putting in longer hours, which limited companies’ need for new hires.
From December 2010 to December 2011, the aggregate amount of hours worked rose to 1.622 billion a month from 1.6 billion, according to the ABS.
“The global financial crisis has [also] coincided with the hiring freeze for a lot of companies,” said Ms Dean. “Anecdotally I would suspect that new hire levels haven’t recovered to pre-GFC levels.”
Both Ms Dean and Mr Mitchell said the structural shift away from traditional retail, driven both by technological change and the strong dollar, was hurting young workers.
Less full-time work
Susan, a part-time 19-year old shop assistant based in Melbourne, has seen the faltering demand for merchandise in stores reduce the staffing level of the store she works in.
“The more experience you have, the easier it is to find a job, but you have to start off very small,” she said.
Lacking experience, many friends her age had resorted to “cash-in-hand” jobs, such as waitressing or dishwashing. “It’s hard to find good permanent work.”
No recovery yet
Since February 2008, the number of part-time workers has risen 10.7 per cent to 3.39 million in December 2011, on trend terms. An ABS labour market study shows drops in full-time youth employment in the recession of the early 1980s and the early 1990s as well as when the global financial crisis began in 2008-09.
“Despite the slowdown in 2008-09, the proportion of men and women aged 55 years and over employed in both full-time and part-time work increased, continuing a long-term trend,” the March 2010 report stated. “In contrast, the proportion of people aged 15-24 years who worked full time fell by 5 percentage points during the latest downturn.”
To date, the recovery in the 15- to 19-year-old unemployment rate has not begun, with the youth employment rate ticking higher in recent months, worryingly mirroring developments in crisis-stricken Europe.
The youth unemployment rate in Europe, comprising workers aged 15-24, was 20.4 per cent in Britain in the second quarter of 2011, 27.7 per cent in Italy, and 29.8 per cent in Ireland.
In Spain where youth have taken to the streets to protest at the grim outlook for their economic future, the youth unemployment rate has soared to 45 per cent. And in Greece, the epicentre of the European sovereign debt crisis, it was 42.9 per cent in the same quarter.