A closer look at jobless youth in Western Sydney points us to the solutions

The following opinion piece by Professor Phillip O'Neil, Director of the Centre for Western Sydney, was first published in The Conversation.(opens in a new window)

Youth unemployment emerged as a primary national issue in the late 1970s after international crisis upended Australia's cosy post-war economy.

Ten years later, youth unemployment soared again as the financial crises of the late 1980s became a full-blown Australian recession. Partial solutions were found.

Yet the disappearance of full-time jobs for the young is accelerating once more. At the same time, for absurd reasons, new barriers to post-school education and training are being erected.

The Centre for Western Sydney, in association with Youth Action NSW, has released a new report into youth unemployment in Western Sydney. We find more than 20 clusters – two or three adjoining neighbourhoods in each case – where the problem is most intense. Typically, each cluster contains around 300 unemployed youth and a further 300 young people who have become disengaged from both full-time work and education and training.

What the study shows is that young people living in these areas of concentrated unemployment face particular challenges. But, having identified these, the evidence of successful policies in the past can steer us towards solutions, provided we are willing to invest in them.

Heed the evidence of what works

A generation ago, during the recession, we learned a lot about youth unemployment. Some key lessons were that:

  • the youth labour market was more than a sub-set of the general labour market;
  • economic recovery no longer restored jobs supply to the young;
  • employers had stopped hiring people fresh out of school to train them for lifelong work; and
  • punitive actions involving work readiness and conditional welfare payments were not solutions.

In the 1990s, Prime Minister Paul Keating drastically changed the policy settings for youth. The focus shifted to measures to make the completion of secondary schooling normal and enrolment in post-school education and training common. Youth unemployment fell consistently for more than a decade as a direct consequence.

But since the global financial crisis a decade ago, the problem of youth unemployment has worsened again.

So, what are the key problems?

Young adults in the clusters identified in the report face neighbourhood hurdles, for sure. These include:

  • lower household income;
  • low employment participation rates among parents;
  • higher reliance on social housing provision;
  • higher levels of responsibility for child-rearing among young women; and
  • in some areas, lower English language competency.

However, the most common characteristics for unemployed and disengaged youth across these clusters are the failure to complete secondary schooling and to enrol in post-school education and training.

Clearly, an education and training solution to youth unemployment requires new effort and resources. Yet circumstances have changed since the global financial crisis.

Alongside the education and training problem, we find an alarming rise in the vulnerability of young adults in Western Sydney to long-term unemployment for two other reasons.

One is a new jobs problem caused by the geography of Sydney's high population growth. Our clusters are located in sub-regions of Western Sydney where local jobs growth is outstripped by the growth of resident workers, often workers with higher skills levels and considerable workforce experience. And access to more distant jobs is a big problem when young people live in households without a spare vehicle and local public transport is inadequate.

A second issue is growing job insecurity in industry sectors where unskilled youth in Western Sydney have typically found jobs, especially in manufacturing and retailing.

Technological changes and a push for higher workplace productivity mean fewer jobs for inexperienced, untrained young people. Filling in job applications and regularly fronting up to employment services providers can't guarantee a regular pay packet in these traditional sectors.

Current demographic changes mean higher rates of labour force participation are needed to feed the tax pool to fund a growing number of retirees. At such a time it makes no sense to watch a high proportion of our youth drift through unemployment and disengagement and turn into unemployable adults.

Early intervention via education and training will cost money straight up. But the returns through time – both fiscal and social – are surely worth the investment.


9 August 2017

Media Unit