Young Australians forced out of work by coronavirus face 'devastating' long-term impacts

It's feared the coronavirus pandemic could put young people at a financial disadvantage for many years to come.

People are seen waiting in line at a Centrelink office

People are seen waiting in line at a Centrelink office Source: AAP

Young Australians are in danger of facing “devastating” long-term impacts to their employment prospects and financial disadvantage because of coronavirus shutdowns.

Research from the Centre for Social Impact (CSI) has detailed how young people have borne the brunt of job losses and cuts to working hours as businesses closed their doors.   

The unemployment rate for young people has risen to 13.8 per cent, more than double that of the general population during the pandemic.

People are seen waiting in line at a Centrelink office (AAP)
People are seen waiting in line at a Centrelink office (AAP) Source: AAP

Young people are more highly represented in industries hit hard by the shutdowns such as retail, hospitality, tourism, fitness and entertainment, resulting in an estimated 213,000 workers aged 15-24 losing their job in the month of April alone. 

Director of the CSI at the University of Western Australia Paul Flatau said the surge in youth unemployment must be addressed as quickly as possible. 

“If we do not address youth unemployment very quickly we will be facing long-term unemployment amongst young people,” he told SBS News. 

“That will have a long-term devastating impact on young people and the economy.”

Some 484,500 young people were also working fewer hours than they would like, according to the research, demonstrating the challenge of underemployment for those in insecure and casual work.

‘The scarring effect’

The CSI research warned young people were also less likely to be covered by the JobKeeper wage subsidy program, with up to 40 per cent working for their employer for less than 12 months. 

“The impacts on them on any of the measures have been two to three times as large,” Melbourne University professor of economics Jeff Borland told SBS News.

“The longer this goes on, the more this problem intensifies and gets worse.” 

The economist said past experience showed those forced out of work during an economic crisis were at risk of a “scarring effect” where a shadow is cast over future employment prospects.

“You are adversely affected at the time of the downturn, but that effect also expands into the future,” he said. 

“What we need to do in the short-term is to ensure they have opportunities to keep building their skills, for work experience and internship programs.” 

Young people to benefit from 'JobMaker' plan

In this climate of economic uncertainty, Prime Minister Scott Morrison announced the government’s “JobMaker” plan to jump-start job creation at the National Press Club on Tuesday. 

Mr Morrison has promised young people will be the “biggest beneficiary” of the push to reform skills, training and industrial relations to return Australians to employment. 

The plan outlined an overhaul to the vocational training sector to better link funding to skill needs based on the demands of businesses. 

It also criticised the “bewildering” and “unresponsive” training system for failing workers and employers and calls for a simplified framework to pave the way for Australia’s recovery. 

Professor Flatau said that such structural reforms were a valid pursuit, but cautioned that getting young people back into work was an “immediate problem” that must be rectified.

“We need that support going into trades, into apprenticeships and high quality vocational and training providers,” he said. 

“We (also) need a greater integration with the higher education sector. (But) we’ve got to make sure that young people who’ve lost those jobs … are really brought into work very, very quickly.”

The CSI’s research paper includes recommendations calling for employment programs targeted at young people to be prioritised to improve their employment prospects.

It also suggests young people in their final year of study extend their education and delay their entry into the labour force to a more favourable time.

Professor Borland said the emphasis right now should be on getting young people into the labour market by strengthening the overall economy to create more jobs.

"The best thing to do to improve labour market outcomes for young people is to have the macro-economy as strong as possible,” he said. 

“I just don’t see redoing our TAFE system and the skills system as the short-term priority. The short-term priority should be macro-economic management.”

People in Australia must stay at least 1.5 metres away from others. Check your state’s restrictions on gathering limits. Testing for coronavirus is now widely available across Australia.

If you are experiencing cold or flu symptoms, arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080. The federal government's coronavirus tracing app COVIDSafe is available for download from your phone's app store.

SBS is committed to informing Australia’s diverse communities about the latest COVID-19 developments. News and information is available in 63 languages at .

5 min read
Published 26 May 2020 at 5:07pm
By Tom Stayner