Factors Limiting Availability of Jobs for Young People
Participation in the Australian labor force means that on is either employed or unemployed. If you are unemployed one has to be actively looking for a job, available for any job, must be having no job. In Australia there are so many young people seeking to be employed. This paper is meant to analyze data from 1980 to 2017 which a period of 38 years. The period is sufficient to determine the trend and in making comparisons with other economies. Those who will be considered as young males are all males aged from 15 to 24 years. The paper shall determine whether the participation rate has risen over the years or have fallen. In case it has risen or fallen, the paper shall also discuss the factors behind any of the developments. Data will be collected from the World Bank. The data will be based on national estimate. The participation rate in Australia will be compared with that of other economies such as Canada, United States, France and North America.
It has been noted that all over the world, there has been a significant decline in the participation of the young male in the labor force. Janda (2012) noted a decline in participation rate by age groups 15-19, 20-24 and 45-54; these were particularly among men. Therefore, there must be a strong contributing factors. This paper will cover the demand and supply factors limiting the availability of jobs for the young people. The following are the possible questions that could be greatly contributing to the situation. Is it difficult for a young man to get a job? Are the young men not educated enough? How has the labor market changed since the 1980s to be unable to demand supply of labor from young people? Are there some policies that are discouraging males’ participation and encouraging the female? Are there some societal changes, or changes in the labor market? Some of these questions will be answered during the research.
There has been some argument that the Australian unemployment rate reported is misleading since there are so many people who fail to participate in the labor force as they don’t meet the set conditions of having no job, actively seeking and available for any job. There are also people who actively have been seeking to be employed but have not been successful and thus have lost hope and have been discourage from job search but are still available for work. Rozner (2017) noted that a landmark report released by Institute of Public Affairs pointed out that the working-age men in Australia are on a mass flight from the labor force. He argued that Not-In-Labor-Force (NILF) rate can explain the continued decline in the participation rate for men. He also made a point that Australian men are not likely to get back to the labor force one they have left. The participation rate for females has gone up even when that for men has been falling. Rozner (2017) argued that there is less evidence that societal and labor market changes have been contributed to men exiting the labor force. He argued that what appears to be a contributing factor is the welfare entitlements. These entitlements have enabled men to survive even when not participating in the workforce.
Education and Unemployment
Aihw.gov.au (2015) noted that the youth have been most impacted by the increase in unemployment rate that emanated from the 2008-09 global recession; the average unemployment rate for the age group 15-24 years after the GFC was at 13.3%. There has also been an increase in the gap between the overall unemployment and the youth unemployment. From 1980 to 2014, the proportion of labor force aged 15-24 declined steadily from a peak of 27.4% to 16.8%. According to Abs.gov.au (2015), the decline in the Australia proportion of labor force by the young group coincided with an increase in full-time education away from labor force from 20.7% to 26.5% for the period 1987-2014. Not only has the participation rate for the young males has declined, but even that for males of all ages as shown in the graph below;
Fig 1: Australian Labor force participation (age 15-64)
Source: Jobs.gov.au (2016)
Since the 1980s, there have been a decline in the male participation rate. However, the graph shows massive increase in the female participation rate. According to Aihw.gov.au (2015), there has been a fall in the average working hours which has coincided with the participation of females going up; 45.9% females are employed part time compared to 16.8% men. This raises more questions like “Has the movement to gender equality distorted the labor market? Are Australian men unwilling to take part time jobs?”
Both young females and young males have experienced pressure in their job search in the past years since the GFC. The youth unemployment rate according to Bsl.org.au (2018) was at its highest level of 13% as at 2015. In this paper by Bsl.org.au, there are several points noted about youth and male participation in particular. For instance it was noted that it is more likely for a young male of age 15-24 who participates in the labor force to be unemployed compared to a female of the same group. On the other hand, females are more likely to be underemployed. The job market is has changed to be more complex, such that the employers are so demanding for skills and experience, such that those without experience gets it very hard to convince potential employers to accept their skills. the scenario is such that even if the young males finds it hard to obtain a job, there is less probability that the job obtained will for insufficient hours; there are many females working less hours than they would like to. Youth unemployment is troubling as it has doubled the Australian unemployment rate. The decrease in male unemployment since the GFC was more than double that for females; there was an 8% decrease. It was also noted that trade is one of the traditional young males employment sector which has declined over the years, thereby contributing to their increased possibility of not getting a job.
Decline in Employment and the Global Financial Crisis
The increase in the unemployment rate for the youths has not attracted much of the government’s concern since it has not impacted the national unemployment rate. This is because most of these youths have ceased seeking employment and have completely gone out of the labor force. Dhillon and Cassidy (2018) argued that the when the Australian economy is performing well, youth unemployment tend to fall, but when it performs poorly, the rate goes up. They noted that in the 1980s, the youth participation rate was 25% and currently its only 15% which represents a big decline. While the GFC has made it difficult for people to get jobs, it has been even harder for the youths. This has led to many youths enrolling for further studies with a hope of getting better jobs when the economy becomes able to create more jobs. This is also argued to be attributed the 2012 government’s removal of caps on the number of university places that were government-subsidized (Bsl.org.au, 2015).
Education attainment could also explain the difference in female and male employment prospectus. 91.6% of all female of age 20-24 have attained qualifications for year 12 or above; this is in comparison to 88.7% of the young males in the same age group (Wgea.gov.au, 2018). In Australia, females tend to be more committed to education than the males. Then it can be argued that maybe there were so many young men in the labor force without the necessary skills and that is the reason why after exiting the labor force they decided to go back to school to gather more skills. Gilfillan (2016) argued that full-time participation in education is the main factor behind the decrease in full-time job participation by young people. 78.0% of the young people for the age group 15-19 in 2016 were engaged in education on a full-time basis compared to 69.9% in 2008. There was also an engagement into education on a full-time basis by the age group 20-24 as in 2016 31.9% participation was reported compared with 28.5% in 2008. The full-time engagement in education explains the labor supply development. It has led to reduction of the supply for labor.
Jericho (2018) noted that currently there are more adults participating in the labor force either employing or looking for a job. The percentage of participation for the young ones under the age of 25 has declined. The greatest decline in on men.
Comparison with Other Economies
Fig 2: Change in Unemployment (December 2010 to March 2018)
Source: Jericho (2018)
The graph shows that there has been a great decline in employment for young men of the age 15 to 24 years from 2010 to 2018. The greatest decline is on the young men of age 15 to 19; their percentage of decrease was -4.1% and that of those aged 20 to 24 was -2.2%. The change for young females was insignificant. However, the females from 25-64 years had a 3.2% increase in jobs while a loss of -0.8% for males of the same age group. As per Jericho’s observation, the greatest decline in employment for the young group from 15-24 years started immediately after the Global Financial Crisis (GFC) which took place in 2008 and ended in 2009. He therefore lays a great blame on the GFC. He used the data from 2000 to 2017 to show how the changes occurred and he came up with the following graphs
Fig 3: Change in employment for the young
- 15-19 years
- 20-24 years
Source: Jericho (2018)
The two graphs show that the decline in young employment started in 2009, but negative records were made in 2010 immediately after most economies were announced to have achieved some recovery from the GFC. From 2004 to 2008, the economy had many jobs for the young ones of age 15-24. Currently the young workers are few compared to those who worked in the year 2000. Considering Fig: 3 provided earlier, it’s evident that the highest percentage of these employment declines were on the young males as the changes on females was too small.
Fig 4: The difference between workers of age 15-24 and 25+
Source: Jericho (2018)
The positive records represents the industries where a 25+ person is most likely to work. On the other hand, the negative records represents the industries where a young person under 25 is likely to work. Jericho noted that the problem of young workers lacking employment is dated back to 2010. After the GFC the industries where the young workers of age 15-24 are most likely to work, have not experienced much growth. Nearly three quarters of employment growth has been accounted by four industries; education, healthcare, professional scientific and technology, and the construction industry. Accommodation and food, and retail trade are the traditional youth-employing industries that never experienced growth. According to Janda (2012), weak jobs growth have historically been noted to lower participation rate because some active job seekers get discouraged. This confirms Jericho’s argument that the failure of growth for traditional youth-employing industries has contributed to lack of jobs for the young Australian. Moving from a period of better economic growth to a period of poor economic growth gets many people discouraged from looking for a job. Their perception is that, if they were unable to get a job when the economy was doing well, definitely there is no more probability of getting it when the economy is performing poorly.
The Australian unemployment rate could have fallen or remained unchanged for some time. This is not because the economy is constantly creating more jobs, the unemployment rate could have risen if the participation rate remained the same. The stability on the unemployment rate is only because some people have exited the workplace. The percentage of unemployment thus reported by the Bureau of Statistics does not indicate the true state of unemployment in this economy. Greater challenges would be exhibited if the Bureau was to estimate the unemployed to the total population. The youth are mostly suffering from underemployment in Australia, this could be another factor leading to the decrease in the participation rate. Ben Jarman a JP Morgan economist is his analysis on the Australian participation rate found that there is a rising proportion of people directly exiting the workforce directly from employment. This is unusual since in the real sense, only those who have been seeking employment for long without success tend to exit the labor force. His argument was that discouragement was not the real factor behind the slide in participation rate.
Cully (2011) pointed out that there was a massive immigration of people of prime age to Australia from 2000 to 2010. Great concerns were raised on the increased participation by foreigners. Some employers became conscious about employing the young people because of the increase immigration. There were some work restrictions on the foreigners especially those with temporary visas (Dhillon and Cassidy, 2018). The reduction of the overseas-born youth participation in the Australian labor force greatly lowered the participation rate. Furthermore, demand has been distorted as there is unavailability of full-time jobs and most young workers are working on part-time basis (Cassidy and Parsons, 2017). Instead of lowering the number of workers during an economic downturn, businesses have been noted to cut the working hours instead (Bishop, Gustafsson and Plumb, 2016).
Fig 5: Australian young Males labor force participation rate
The graph is derived from the data collected from the World Bank on the participation rate by young males from 1980 to 2017. The graph indicates that in the past, the participation by young males was very high with the highest level of 78.71% recorded in 1981. This had declined to 66.89% as at 2014. As at 2017, the participation level was 67.36%; this was only a small increase from 2014. The trend line also confirms that there has been a great decline since it’s steeply sloped.
Fig 6: Australian, Canadian, France, North American and United States young males’ labor force participation rate (15-24 years)
According to the above graph, Australia has been observed to have had the highest labor force participation rate by the young males of age 15-24 years. The next economies with the largest participation second to Australia are North America and United States; they have a tie as it can observed from above. Canada follows and lastly is France with the lowest participation rate. The common observation on the five economies compared in the graph is that the participation rate has fallen over the years. Even with the big decline in the participation rate by the young men of Australia noted earlier in this research paper, Australia still has the highest participation rate.
Conclusion
The decline in the young participation rate may be attributed to lack of jobs for the youths. Some of these people may be discourage from getting a job. Unlike the senior group, the young are most likely to get discouraged from finding a job since their responsibilities are not much. This change in the labor market has led to many youths opting to stay at school rather than participating in the labor force. In this paper it has also been identified that the true unemployment rate in Australia is not reported. The government should ignore the previously set conditions of not having a job, actively seeking and available for any job, and consider every person within the working age to be unemployed if they don’t have a job because most of those who are not in the labor force are still willing to take a job if given one. The government has an opportunity of solving the problem with jobs available for the young people by subsidizing the growth of the industries where they are expected to be employed most; these were found to be accommodation and food, and retail trade. This paper will be useful for policy makers, and further research should be carried out to answer the question that were left without an answer since they may also raise some point of interest.
Abs.gov.au (2015). Labour force, Australia, detailed—electronic delivery, December 2014. [Online] Abs.gov.au. Available at: https://www.abs.gov.au/ausstats/[email protected]/Previousproducts/6291.0.55.001Main%20Features1000Dec%202014?opendocument&tabname=Summary&prodno=6291.0.55.001&issue=Dec%202014&num=&view= [Accessed 13 Oct 2018].
Aihw.gov.au. (2015). Australia’s welfare 2015: Labor force participation. [Online] Aihw.gov.au. Available at: https://www.aihw.gov.au/getmedia/2f97a9db-f5af-4edd-9801-b1854dc6277e/AW15-2-2-Labour-force-participation-in-Australia.pdf.aspx [Accessed 13 Oct 2018].
Bishop, J., Gustafsson, L. and Plumb, M. (2016), ‘Jobs or Hours? Cyclical Labour Market Adjustment in Australia’. [Online] Rba.gov.au Available at: https://www.rba.gov.au/publications/rdp/2016/2016-06/ [Accessed 13 Oct 2018].
Bsl.org.au. (2015). Paying a Price: Young Men and Women Experiencing Joblessness in Australia. Bsl.org.au. [Online] Available at: https://library.bsl.org.au/jspui/bitstream/1/7151/1/BSL_Paying_a_price_young_joblessness_2015.pdf [Accessed 13 Oct 2018].
Cassidy, N. and Parsons, S. (2017), ‘The Rising Share of Part-time Employment’. RBA Bulletin. Reserve Bank of Australia, P 19-26.
Cully, M. (2011). How much do migrants account for the unexpected rise in the labour force participation rate in Australia over the past decade? [Online] Homeaffairs.gov.au. Available at: https://www.homeaffairs.gov.au/ReportsandPublications/Documents/research/migrants-account-unexpected-rise-labour-force-rate-aus-2000-2010.pdf [Accessed 13 Oct 2018].
Databank.worldbank.org. (2018). World Development Indicators. Databank.worldbank.org. [Online] Available at: https://databank.worldbank.org/data/source/world-development-indicators [Accessed 13 Oct 2018].
Dhillon, Z., and Cassidy, N. (2018). Labour Market Outcomes for Younger People. [Online] Rba.gov.au. Available at: https://www.rba.gov.au/publications/bulletin/2018/jun/labour-market-outcomes-for-younger-people.html [Accessed 13 Oct 2018].
Gilfillan, G. (2016). Developments in the youth labour market since the GFC. [Online] Aph.gov.au. Available at: https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1617/YouthLabourMarketGFC [Accessed 13 Oct 2018].
Janda, M. (2012). Has Australia already passed its labour force peak? [Online] Abc.net.au. Available at: https://www.abc.net.au/news/2012-10-11/janda-australias-labour-force-peak/4306022 [Accessed 13 Oct 2018].
Jericho, G. (2018). We’ve broken the participation record but we’re not all winners. Theguardian.com. [Online] Available at: https://www.theguardian.com/business/grogonomics/2018/apr/24/weve-broken-the-participation-record-but-were-not-all-winners [Accessed 13 Oct 2018].
Jobs.gov.au. (2016). Analysis of trends in the Australian labour market. [Online] Jobs.gov.au. Available at: https://www.jobs.gov.au/annual-report-2016/analysis-trends-australian-labour-market [Accessed 13 Oct 2018].
Organization for Economic Co-operation and Development (OECD) (2016). ‘Investing in Youth: Australia’, OECD Publishing, Paris, September.
Productivity Commission (2016). ‘Migrant Intake into Australia’, Inquiry Report No. 77, Canberra, April.
Rozner, G. (2017). Australia’s Silent Crisis in Male Employment. Ipa.org.au. [Online] Available at: https://ipa.org.au/publications-ipa/media-releases/australias-silent-crisis-male-employment [Accessed 13 Oct 2018].
Thomas, M. (2018). Employment—measuring and improving outcomes for young. [Online] Aph.gov.au. Available at: https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook45p/EmploymentYoungAustralians [Accessed 13 Oct 2018].
Wgea.gov.au. (2018). Gender workplace statistics at a glance. [Online] Wgea.gov.au Available at: https://www.wgea.gov.au/sites/default/files/Stats_at_a_Glance.pdf [Accessed 13 Oct 2018].
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
