Times are still tough for young unemployed people

• Australian Council of Social Service

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09 August 2010It is only a year since the Global Financial Crisis (GFC) plunged most wealthy nations into recession. Australia escaped a ‘technical recession’ but unemployment rose by one third. Young people were among the worst affected because employers put new hires on hold, waiting for the economy to improve. This meant that many education leavers could not find work and many young people lost their casual jobs. Many young people who were unable to find a secure job last year are still out of work, because employers are reluctant to hire people who lack recent work experience.

Between May 2008 and May 2009, the overall unemployment rose by one third but the unemployment rate for teenagers (15-19 years) rose by half. The unemployment rate for teenagers is still 18%, three times that of the labour force as a whole (at 5%). For young adults in their early twenties, the unemployment rate is 7%. In May 2010 there were 193,000 unemployed people under 25 on Youth Allowance or Newstart Allowance, of whom 94,000 had been unemployed for over 12 months.

The rise of youth unemployment has affected some regions more than others. In seventeen of the country’s 69 ‘labour market regions’ teenage unemployment rose to more than 30% during 2009-10. Those regions include Wollongong (NSW), Northwest Melbourne (VIC), Far North Queensland, Western Adelaide (SA) and Central Perth (WA).

This policy analysis describes the job prospects and financial situation of unemployed young people, and raises policy proposals to improve them.