How are Young People Fairing?

By Mark Wooden

Professional Educator
March 2007

How Young People are Faring 2006 , a report from the Dusseldorp Skills Forum, indicates that many young people continue to fare relatively poorly in the labour market, but the news isnt all bad, writes Mark Wooden .

The Australian labour market has been experiencing boom-like conditions in recent years, so youd expect a strong labour market. The key message presented in How Young People are Faring 2006 , however, is that youth have fared relatively poorly, as reflected in the continued decline in the number of full-time jobs held by young people.

Of course, young people are increasingly told that the route to future success is via education, so declining numbers in full-time employment might be a reason for celebration if that reflected rising participation rates in education. How Young People Are Faring , however, shows that the proportion of young people who are neither in full-time work nor in full-time education remains stubbornly high. An obvious question follows: what is this group of almost 540,000 young people doing?

The report informs us that of the 14.4 per cent of teenagers who are neither in full-time work nor in full-time education, about forty-five per cent are in part-time jobs, just over another quarter are unemployed, and a similar proportion are neither employed nor looking for work. Among young adults, the fraction in this situation is higher 23.3 per cent and the comparable proportions of this group in part-time work, unemployment and outside the labour force are forty-five per cent, nineteen per cent, and thirty-six per cent, respectively. Perhaps, most disturbing of all, the report emphasises the high levels of underemployment among the part-time workers in this group. Around two-thirds of teenagers and almost half of the young adults in part-time employment and full-time study prefer more hours of work.

There are good reasons why some young people choose not to work or study child care, ill-health, disability, or simply opting to take a year out so we shouldnt automatically assume that a lack of involvement in formal education or paid employment is necessarily a sign of inactivity or that weakness in the labour market is the main cause of inactivity. Indeed, the Australian Bureau of Statistics, in its September 2005 supplement to the Labour Force Survey , classified as discouraged job seekers very few less than 8,000 of the almost 1.3 million people under the age of twenty-four who are outside the labour force.

How Young People Are Faring relies on cross-section data, which only tell us about the activity of people at a single point in time. More revealing would be information that enabled us to track individuals over time, such as the data from the Longitudinal Survey of Australian Youth. Gary Marks (from ACER) has analysed these data and found relatively high rates of movement from part-time to full-time employment among young people, and that underemployment appears to be a temporary phenomenon for the vast majority of young people.

Even unemployment may not be a serious problem if its relatively short-lived, and all indicators are that long-term unemployment that is, lasting more than one year is both declining and affects a relatively small proportion of the labour force at just under one per cent.

Policy-makers should rightly be concerned with ensuring that young people are not trapped in a cycle of intermittent part-time jobs that are of little value in enhancing long-term prospects in the labour market, but its equally important that we identify exactly who are the people most at risk of this.

Finally, a note of caution is warranted about the implicit assumption that full-time education is always beneficial. The work by Gary Marks referred to earlier, for example, suggests that many graduates of our TAFE system are not faring particularly well. Marks concludes that less emphasis should be placed on vocational education as a solution to problems in the school to work transition. My view is that the TAFE system needs to be overhauled with a view to ensuring it can better meet the needs of prospective students and employers.

Mark Wooden is Associate Professor and Deputy Director of the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne.

For the full report How Young People are Faring 2006 , or HYPAF At a Glance , visit www.dsf.org.au