The Case for My First Job 2.0
29 Aug 2019
The latest data from the Australian Bureau of Statistics (ABS) shows that high youth unemployment remains a persistent issue in Australia.
The trend unemployment rate for 15-24 year olds has consistently been double that of the unemployment rate for people of all ages and at no point in the past 12 months has the trend unemployment rate for young people been less than double that of the rate for all ages.
In July 2019, the trend unemployment rate for 15-24 year olds was 12.0% compared to a rate of 5.3% for people of all ages. While the national rate has increased slightly over the past 12 months, from 5.2% to 5.3%, the growth in the youth unemployment rate has been much greater increasing from 11.2% to 12.0%.
At the same time youth unemployment rates are increasing, figures from the ABS show that growth in the economy has slowed to levels not seen since the Global Financial Crisis (GFC). This means it is unlikely we will see youth unemployment rates return to their pre-GFC level, where the rate was consistently below 10.0%, anytime soon.
It is for this reason that SYC is embarking on My First Job 2.0. The question that underpinned the original My First Job initiative, ‘How can we support young people, particularly those who may have experienced disadvantage, to gain the skills necessary and opportunities needed to secure and maintain employment?’ is as relevant now as it was over five years ago.
While the continuing high youth unemployment rate is reason enough to revisit My First Job after five years it is not the only factor influencing the employment prospects of young Australians and, as a result, it is not the only factor under consideration in MFJ 2.0. We have already identified a range of other factors that either were not an issue when MFJ 1.0 was being developed or their influence has grown significantly since that time:
Expanding role of ‘gig’ work and labour on-demand
New research has shown that 7 percent of working Australians have used a digital platform (i.e. Uber or AirTasker) over the past twelve months to access work and within this group young people were more likely to have undertaken gig work.
Growth in underemployment
Underemployed workers are people who are in work who want, and are available to work, more hours than they currently have. Since January 2014, the underemployment rate for 15 to 24-year-olds has been more than double the rate for people of all ages and now sits at 18.0% compared to 8.4%.
Polarisation of the workforce
There is the potential for a hollowing out of the labour market due to the decline in the share of mid-level skilled jobs typically considered “entry level” for young Australians. In June 2019, job vacancies for positions rated Skill Level 5 (requiring only Certificate I or Secondary Education) made up 10.5% of all vacancies compared to Skill Level 1 (requiring a Bachelor’s Degree or higher) which accounted for 40.2% of vacancies.
Increased role of knowledge workers and growth in the service economy
Almost 80% of Australia’s labour force is employed in the services industries, serving people instead of making things. Services will continue to drive job growth in the future, particularly through care roles related to Australia’s aging population, the NDIS, childcare, and home-care based services.
Rollout of 5G wireless networks
5G is expected to provide huge leaps forward in speed, capacity and connectivity. Eventually, the network may provide mobile data speeds that are 100 times faster than current 4G networks. The increased internet speeds are linked to the expansion in use and application of many other digital trends such as the Internet of Things, autonomous vehicles, artificial intelligence and machine learning.
Redefinition of what a job is
Linked to the expansion of digital technologies the nature of work is changing and virtually every job will change with it. It is expected that jobs of the future will be increasingly digital, more multidisciplinary, and more data/information-driven. Automation will replace repeatable tasks in jobs, making work less routine and jobs more likely to combine aspects of several roles to best leverage the combination of human skills working with technology. Deloitte have termed these roles ‘super-jobs’ for the way they will combine work and skillsets from across multiple business domains.
A changing workforce
Millennials and Generation Z make up more than 40 percent of Australia’s working population and have different skill sets, values and attitudes to work. Helping young people to succeed in the labour market in the future will not just be about better supporting young people, but better supporting business to attract and retain those young people. Millennials and Generation Z are motivated by purpose and meaningful work, expecting their employers to reflect their views, and they are willing to leave employers to find that. Only 13 percent of Gen Zs and 27 percent of millennials expect to stay beyond five years with their current employer.
The cost of the issue
Since the launch of MFJ 1.0 there has been an increase in data that helps us to understand the cost of a young person unsuccessfully transitioning from education to employment. The Mitchell Institute calculated the fiscal costs for each disengaged young person (i.e. lost taxes, welfare payments, and health and justice service use) at $412,000 over a working lifetime. The Department of Social Services Priority Investment Approach has also calculated the average lifetime welfare cost for an individual remaining on Working Age payments at $164,000.
This is just a sample of the factors we see influencing young people’s experience of the labour market currently and into the future. By reconvening the My First Job Working Group, with employers of young people and organisations that help young people to find work, we expect to uncover other factors or trends they have seen firsthand.
Many of these factors are also interconnected. For example, young people may explore gig work because they cannot get enough hours in traditional work or because they want more flexibility to work when they want and where they want. In turn, digital technologies are fuelling the rise of more on-demand platforms creating more opportunities for gig work, but also fundamentally changing traditional notions of what a job is.
For a young person, obtaining their first job or starting their career remains one of the hardest steps they will face when transitioning to independence. It presents challenges that can make them question their capabilities and self, in a way that they never have before. The original My First Job initiative may have been successful in achieving its aim of developing a youth-specific framework for improving youth employment outcomes, but it is clear that the issue of how young people will continue to secure and maintain employment is one that needs constant attention to deliver the best possible outcomes in a changing environment.
To continue our understanding of “what works” we are asking the best employers of young people “what is it that you’re thinking about?”