Solving youth unemployment goes beyond election promises
By Angela Knox and Jo Ingold
Skills and job creation are key issues for both major parties heading into the NSW election, with young people featuring prominently. The government is promising 100,000 new jobs in western Sydney over the next five years, while Labor is promising to reinvigorate the local manufacturing sector and expand TAFEs.
These are laudable goals, particularly in the current context. But employment is not as simple as creating jobs – we must ask what types of jobs are being created, particularly for young people.
Australian Bureau of Statistics data for January 2023 reveal that the national unemployment rate increased to 3.7 per cent and the underemployment rate remained at 6.1 per cent. Unemployment grew despite an increase in part-time jobs, which highlights the importance of increasing the quantity and quality of jobs available.
Part-time jobs, including casual, temporary and gig work, and underemployment are often associated with precarious employment, which is characterised by three key dimensions: job insecurity, income inadequacy, and lack of rights and protections.
While forms of precarious employment can suit some workers, it is more commonly associated with poor job quality. Research shows it can lead to deterioration in mental and physical health, including higher mortality risks, especially among men.
This can indirectly impact workers’ households and families through stress and material deprivation, and affect the wider community through reduced spending power and lower community participation.
These effects are felt in the short term and accumulate, generating longer-term problems. Research has demonstrated that precarious employment early in your working life is associated with an increased likelihood of unemployment in later years, lower lifetime earnings, and lower levels of job satisfaction, life satisfaction and health at age 50 – thereby causing a scarring effect.
Precarious employment disproportionately impacts young people. In Australia, workers aged 15-24 are more likely to be in precarious jobs than those aged over 25, and approximately 22 per cent of Australia’s young workers are underemployed, a problem likely to be contributing to the high level of young workers occupying multiple jobs.
Nevertheless, those with multiple jobs earn around $10,000 per annum less than workers with a single job. Given that underemployment coincides with high rates of youth unemployment in Australia, young people are also at risk of becoming trapped in an unemployment-underemployment cycle, including ‘dead-end’ jobs.
This problem is not unique to Australia, and policymaking directed toward solutions has typically proven challenging and intractable. However, an innovative initiative by Social Ventures Australia is showing remarkable promise.
The not-for-profit organisation deployed philanthropic funding to facilitate Australia’s first Employer Innovation Lab, with the objective of improving job quality for young people in western and southwestern Sydney. At the time of the first lab in June 2022, there were over 16,500 young people actively looking for work in the area.
Based on evaluative research conducted by Jo Ingold, Angela Knox and Qian Yi Lee, Social Ventures Australia’s experiment is yielding promising results. Participating employers said the opportunity to learn about job quality, engage in free one-on-one coaching, and hear from young people about their lived experiences of employment and searching for work proved especially valuable to their aim of creating quality jobs for young people.
While these pilot programs are ongoing initiatives, they demonstrate the potential of employer-driven policymaking to deliver mutual gains by addressing both the quantity and quality of jobs available.
SVA is in the process of recruiting organisations to participate in upcoming Labs.
Angela Knox is an Associate Professor of Work and Organisation at the University of Sydney Business School. Jo Ingold is an Associate Professor of Human Resource Management at Deakin Business School, Deakin University.
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