Demand for skilled labour bypasses the young

Whilst on the surface the Australian unemployment rate has been largely untouched by the economic crisis and talk of severe skills shortages is getting louder, a new report from the Australian Bureau of Statistics (ABS) reveals that the young have carried the burden of the downturn and there are more than half a million under 24 out of work, a 19% unemployment rate.


The sobering statistics contrast sharply with the Prime Minister Kevin Rudd's shrill warnings of an impending brake on the economy owing to lack of labour and his justification of continuing high immigration numbers.


The ABS notes that the proportion of people aged 15-24 years who worked full time fell by five percentage points during the latest downturn.


More worryingly, the ABS also notes that once young people end up in the unemployment queues, their prospects of finding a job do not improve in the same way as those of older workers: “… while the proportion of people aged 15-24 years employed full time has fallen markedly during downturns, it has not tended to pick up again once growth returns, as it has for older age groups,” the report says.


Dr Iain Campbell, a senior research fellow at RMIT and an expert on patterns of employment and unemployment, told the ABC that the perception that the downturn did not cause major unemployment problems may well be false.


"… I think what's interesting about [the ABS] analysis is that it shows that [the effect on unemployment is] not as mild as perhaps we have been led to believe; that it's a larger, more complex, more troublesome picture. And the impact of this economic downturn on the labour market might not yet be over."


Dr Campbell says the downturn is likely to have lasting effect on youth unemployment and job prospects, especially in respect of full-time jobs.


"What we know from past experience is that this is going to be a long-lasting change in youth labour markets – the shrink in the full-time job opportunities and their replacement by part-time opportunities.


"That's not a problem of course if you're a full-time student. But if you're a young person looking for a full-time job, I think the data contains some troubling news,” he told the ABC.


Long-term unemployment and underemployment


The ABS notes that trends in both of these categories are going in the wrong direction.


“… an increase in the average duration of unemployment (from 28 to 36 weeks over the year to December 2009) suggests that the unemployed are finding it increasingly difficult to obtain work,” the report notes.


On underemployment, the ABS found that “Rising levels of part-time employment and increased flexibility in employment arrangements in recent times has seen a shift in the impact that downturns have on people's employment prospects.


“For many people, it is not so much that they cannot find any work during downturns, but that they cannot get enough work. Consequently, the unemployment rate does not necessarily capture the full extent to which the labour supply is underutilised.


“This is reflected in growing interest in other measures of labour force underutilisation, such as the underemployment rate. This is a particularly important indicator for groups with a high prevalence of part-time employment, such as women and young people.”


The full report can be downloaded here.



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