As this humanitarian and healthcare crisis unfolds there is certain to be an unintended consequence for younger Australians. Many of the sectors forced to shut down by COVID-19 such as retail, hospitality, travel, fitness and sport, and academia are generally large employers of young people. This is why the youth of Australia are accounting for a large proportion of the unprecedented surge in those filing for unemployment claims. In April, youth unemployment rose to 13.8 per cent up from 11.5 per cent the previous month, with the number of underemployed young Australians also rising. In some parts of regional Australia, the figures are much worse. In the regional city of Toowoomba, unemployment hit a staggering 24 per cent.
This has uncanny parallels with the Global Financial Crisis when youth unemployment hit 12 per cent levels; in some cases as high as 40 per cent in certain developed countries. I started our charity Talent RISE in response to these alarming unemployment figures after the GFC, to help young people with barriers to employment re-skill and in many cases enter the digital employment sector. But here we are again, 10 to 12 years later, and we face yet another youth unemployment crisis. Whilst there is some hope that the economy can fire up reasonably quickly, it is unlikely that most of the aforementioned sectors will bounce back. In fact, they may be effectively dormant for the remainder of this year. Some may never come back.
Young people also make up a large proportion of apprentices and trainees. Figures released by the industry peak body, the National Australian Apprenticeships Association show that around 15,000 apprentices and trainees have been cancelled or suspended since March 1. Further, businesses have stopped taking on new apprentices, with new starts down almost 60 per cent.
Just as the young were disproportionately affected by the financial crisis, The Grattan Institute estimates that younger Australians are likely to be hit hardest because they are more likely to work in occupations and industries most affected by COVID-19.
Whilst the primary effort during this pandemic has quite rightly been focused on preserving our senior citizens, the longer-term challenge may well be tackling large-scale redundancy among our younger population.
Recent ABS data shows that job losses were heaviest in accommodation and food services sectors where over a third of workers have lost employment. Those aged between 20-29 were the worst affected in these sectors, with more than 40 per cent losing work. Across the economy 18.5 per cent of jobs for under 20's have gone since mid-March and 11.8 per cent of jobs for under 30's.
These findings suggest that the immediate impact of the coronavirus downturn on workers has been large and unequal, with younger workers hit hardest. History suggests that in the long term, the economic shock caused by the pandemic is highly likely to increase inequality between young and old, between higher and lower earners, and between those on secure and insecure contracts.
Innovation foundation Nesta reported that there is a lack of support in helping young people craft a better future for themselves arguing that there is a fundamental mismatch at the moment between the skills people have, and the skills needed in the economy.
Part of the challenge is that a relatively small part of young people's work can be done from home. Indeed, the data suggests that just 30 per cent of the average young person's work can be done from home, compared to 55 per cent for older workers.
It is therefore essential that both the public and private sectors consider initiatives to re-skill younger workers to cope with an employment landscape that in part has permanently shifted. In many ways, COVID-19 has accelerated socio-economic change that was already in play. The federal government's JobMaker program recently announced by the PM is aimed at encouraging small, medium and large businesses to take risks, and will focus heavily on addressing our nation's flawed skills and training system.
Australia's lack of focus in the skilling and upskilling of our workforce has left a huge gap in multi-skilled workers who would have been more adaptable to this evolving labour market. Whilst I believe we all welcome a skills and training overhaul, with no funding boost and no clear timeframe for this roll out, and the lag between the imitate demand and the attainment of skills, the impact of this scheme will not be seen for years.
Whilst the primary effort during this pandemic has quite rightly been focused on preserving our senior citizens, the longer-term challenge may well be tackling large-scale redundancy among our younger population; especially when government relief funding ends or runs out. It's time to act now.
- Richard Earl is the founder and executive chairman of Talent RISE, a charity dedicated to finding jobs in the digital sector for young people who have experienced barriers to employment.