Unemployment and Employability

Year on year unemployment has declined from 5.9% to 5.4% with employment growth exceeding 380,000 over the last twelve months.

Notwithstanding, data from the Australian Bureau of Statistics reveals that the long term unemployed in Australia, at the time of the GFC, was around 17,000 and today exceeds 50,000.  In 2008 the proportion of youth unemployment was less than 9% and today it is more than doubled.

A recent report published by the Brotherhood of St Laurence, reflecting on the past decade post the GFC, revealed that youth unemployment has tended upwards and that long term youth unemployment represented one in five of 15 – 24 year olds in September 2017.  The Brotherhood of St Laurence attribute this largely to the lack of entry level job opportunities, poor education outcomes including diminishing continuing education, and a mismatch between employers’ demands for particular skills and experience and the skills and experience of these youth.  There was no evidence of any variation in the job seeking activity of this demographic during these periods.

Brotherhood of St Laurence research also reveals little difference between young people and older job seekers in the range and distribution of job search activities undertaken by those looking for work.

In the course of their research, the Brotherhood of St Laurance drew upon survey material arising from interviews with approximately 15,000 individuals undertaken by Household Income & Labour Dynamics in Australia (HILDA) Survey.

The HILDA research, which spans the years 2001 to 2015, reveals the five most significant causes of difficulty in seeking a position were:

  • Lack of experience
  • Lack of education
  • Transport
  • Number of applicants for the position
  • Limited opportunities in their field of interest/capability

For those aged 25 and older, the factors were:

  • Number of applicants for the position
  • Lack of education
  • Lack of experience
  • Limited opportunities in their field of interest
  • Too old.

In the above context, underemployment has also become a focus of Government.  Unemployment and underemployment rates have historically tended to move in lock step, though since 2015 this long established relationship has changed with underemployment remaining stubbornly high, even though the jobless rate continues to firm at around 5.4%.

The underemployment trend rate in the November quarter of 2017 was 8.4% – a modest decline over the prior 12 month period (previously 8.9%).  It is this circumstance which is also contributing to modest wages growth as the level of underemployment reveals a growing spare capacity among the underemployed to pick up any slack, potentially below the full-time equivalent wage rate.  This unused capacity in the labour market is not reflected in the unemployment rate.

Further, it is highly probable that part-time workers or the underemployed will become an attractive alternate source of employment to the full-time employed workforce who may not be contributing productively to their employer’s prosperity and sustainability.

Notwithstanding these observations, and job growth in the 2016 calendar year being predominantly part-time workers, more than 80% of the growth in the current calendar year has been for full-time participants with the female participation rate also increasing.

Research also reveals a sharp decline in the number of entry level jobs over the last decade with a reduction of more than 50% which is contributing to the challenges that young job seekers face today.  The HILDER research further highlights the view that the nature and composition of future jobs is far from clear and for young people seeking to enter the labour market an entry level job has an entirely different meaning today than in previous generations.

The research reveals that up to 44% of jobs available in Australia today will potentially be automated.  At the same time, many new and as yet undefined jobs will be created, thereby presenting both opportunities and new or increased risks, according to a research paper by Edmonds & Bradley in 2015.

The paper also indicates that the current combination of technology, social demographic, geopolitical and environmental forces is ushering in a period of rapid transition revealing that young people must be equipped with the networks and adaptive capabilities required to take up new work opportunities, whilst at the same time being armed with the knowledge they need to navigate the evolving labour market.

Recent Government advice focussing on the criticality of Federal and State Government initiatives in the next decade has identified education as one of the three critical areas requiring an increase in consideration and attention.   This is essential to ensure that the delivery of education and training is aligned with current demands of employers and to also take into account the uncertainty surrounding Australia’s future and economic advantage across all industry sectors.

In order to have a positive impact on Australian citizens and those in the workforce, Government focus needs to be upon adapting to an ever-changing digital economy, big data, and our competitive advantage in the delivery of services while ensuring, as a nation, we gain from our natural resources, from our agriculture, and from our local price competitive engagement in construction and infrastructure development.

Within the above context, it is also pertinent to reflect on the fact that in a recent survey of major companies’ CEOs, AFR’s Chanticleer (Tony Boyd) revealed that the key focus of CEOs in the period ahead will be on investment in technologies such as artificial intelligence and data analytics.

The parallel emphasis on productivity in this context is likely to seek to ensure that workforce conditions do not adversely impact optimal employment potential by ensuring that Australians of all ages are equipped to contribute to the changing world of work.  This focus is unlikely to replicate the focus of past Governments on industrial relations reform as the cornerstone for boosting productivity and employment. Rather, the focus will be on ensuring that our youth and older workers are both educated and continually trained to enable them to adapt to changing competitive influences and the opportunities that such initiatives would create for Australians.

Further, in pursuing increased productivity across the entire economy, those representing the nation’s constituents will need to manage the conflicts between ideology and policies and investment and ownership.

To achieve national and workforce productivity benefits, a critical initiative of Government will be engaging with the private sector to optimise outcomes at the least cost in the shortest time.  This is essential to avoid what is increasingly seen across headlines nationally as cost blow outs and time delays in the delivery of critical infrastructure and related community benefits, with such blowouts and delays costing taxpayers billions of dollars.

Increased partnership between resources outside public sector employment is essential, together with a potential re-think of how a positive future for the nation and for all generations can best be delivered with the melding of economic imperatives and the nurture and support of citizens of all ages and capacities.

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