Economic Impacts of Coronavirus on the Employment of Younger People

This blog is part of a series relating to the economic and social impacts of the COVID-19, novel coronavirus pandemic of 2020.

Australia is bracing for further economic collapse as the coronavirus pandemic sweeps the nation. Michaelia Cash, Minister for Employment, warned of a possible increase in unemployment as more and more businesses begin closing their doors or standing down employees. Despite a slight decrease in unemployment rates in February, it is estimated that by October 2020, unemployment will skyrocket to 7%, a level not seen in approximately thirty years. Furthermore, a recent study found that nearly half of all organisations are implementing a hiring freeze until the pandemic is over. For many Australians, this means temporarily or permanently losing work or, in the case of those who are unemployed, an even worse prospect of finding a job.

As described in our last blog, Australian university graduates are struggling to find employment in the current climate of economic uncertainty. The difficulties arising from a competitive, oversaturated job market have been compounded by the lingering economic and sociocultural devastation of last year’s bushfire disaster. For many young Australians, “the prospect of finding a decent, permanent, full-time job with normal entitlements (like paid leave and superannuation) is increasingly far-fetched”. As noted by John Quiggin, Senior Research Fellow at the University of Queensland, “the Australian economy was slowing even before the bushfire catastrophe and the arrival of coronavirus.” A study carried out by the Australia Institute’s Centre for Future Work found that, as of October 2019, only 73% of recent university graduates were employed full-time, a 12% decrease since the 2008 Global Financial Crisis. Researchers noted rapidly shifting technological advancements as well a change in the labour market, with a decrease in full-time, permanent jobs and an increase in casual, contractual and part-time work. Due to these shifting relationships with employment, many young people turn to casual work to make ends meet. Nearly 40% of all casual employees are under the age of 25. Furthermore, over half of workers in the hospitality industry — one of the industries that will be hit hardest by the COVID-19 pandemic — are employed on a casual basis.

With temporary work dwindling and permanent positions further out of reach than ever, many young people will be turning to government assistance to get through this next period. The JobSeeker allowance (recently renamed from Newstart), provides unemployed people with about $280 per week on which to live. In order to receive this allowance, individuals “must record their job searches online and attend meetings with employment services agencies in order to avoid having their income support cut off”. Due to the coronavirus epidemic, the Australian Government has agreed to relax certain conditions attached to JobSeeker, including a decrease in job search requirements and a temporary halt on programs such as Work for the Dole. Penalties are still in place for those who fail to meet the required conditions of JobSeeker, and several people have reported being forced to attend in-person meetings despite being immunocompromised or showing flu-like symptoms. In contrast, all welfare obligations were suspended during the recent bushfire crisis, a change which many groups, including the Labour Party, the Greens, the Australian Council of Social Service and the Australian Unemployment Workers Union, have called on the Federal Government to implement during this time of crisis.

The reality is that this is an unprecedented situation in so many respects and it shows no sign of easing in the near future. For those younger people leaving school or university and trying to find their feet, the ground is shakier than ever. But as Twitter user and Get-Up employee Ed Miller points out, there is a further public health crisis waiting to happen: “Every % of unemployment causes a significant number of deaths. One in five suicides are linked to unemployment. We cannot expect to shut down entire industries without strong guarantees for workers – or we’re trading lives instead of saving them.”

Studies on data across the last period of major economic crisis in 2008 showed the link between unemployment rates and suicide is “a very important measure of the impact of the economic crisis. However, behind these statistics lie personal and family tragedies, the long-term impact of which is difficult to measure.”

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