Young Australian workers trapped in ‘part-time purgatory’, report finds

3 December 2018

A powerful reshaping of Australia’s youth labour market has ushered in an era of extreme job insecurity for the nation’s youth.

In 2018, young Australians are far more likely to work part-time than 40 years ago. Just as they are trying to launch independent lives, 20-somethings are especially hard hit, according to the new analysis by the national anti-poverty organisation Brotherhood of St Laurence for its latest Youth Unemployment Monitor, out today.

For tens of thousands of young Australians, their first ‘real’ job is likely to be a ‘survival job’ – and a part-time one at that. The disturbing report zeroes in on the employment challenges facing today’s young adults compared to previous generations, finding that more than 550,000 young people aged 20 to 24 are working part-time today.

Notably, the report said this change was not because all young part-time workers were otherwise engaged in full-time study. Indeed, more than 260,000 young people aged 20 to 24 who were not in full-time study had a job – but only worked part-time.

The report, citing Australian Bureau of Statistics (ABS) data, said the trend towards part-time work for young people was fuelling high rates of youth underemployment - that is, when a person secures some work but wants more hours.

To gain an accurate picture of how young people were faring in Australia’s labour market both youth unemployment and underemployment needed to be considered, said Brotherhood Executive Director Conny Lenneberg.

‘Young Australians today face job challenges their parents and grandparents simply could not have imagined. The combination of stubbornly high youth underemployment and unemployment poses enormous risks, especially for young people experiencing disadvantage,’ Ms Lenneberg said.

‘Australia has entered its 28th year of uninterrupted economic growth, but the prosperity dividend has not been shared fairly with our young generation and they face many new uncertainties,’ Ms Lenneberg said.

‘As a nation we must intensify our efforts to tackle this deep challenge, and as a start, policymakers should move to offer all job hunters aged 15 to 25 a specialist youth employment service rather than the nation’s current fragmented response.’

Australia’s youth unemployment rate for 15 to 24 year olds remains stubbornly high at 11.2 per cent (October 2018), while the underemployment rate for this age group exceeded 18 per cent. Overall, in October 2018 more than 643,900 people aged 15 to 24 were unemployed or underemployed.

The Brotherhood’s report, titled Part-time purgatory: young and underemployed in Australia, points to the reshaping of Australia’s youth labour market over the past four decades, accelerated by the economic downturns in the 1990s and, more recently, during the 2008 global financial crisis (GFC).Compared with 40 years ago, 20-24 year olds today are four times as likely to work part time. Part-time work fuels underemployment.In another measure, over the same period, rates of underemployment – defined as having part-time work but wanting more hours – have risen six-fold for 20-24 year olds.

Underemployment undermines young people’s ability to build strong financial foundations, and has longer term impacts on their economic security, the report warned.

Download: Part-time purgatory: young and underemployed in Australia

Key facts from Part-time purgatory: young and underemployed in Australia

The report’s findings in more detail include:

  • Part-time increase: Young people aged 20-24 in the labour force are far more likely to work part-time than 40 years ago - and compared with their older counterparts today. In 1978, less than 10 per cent of 20–24 year olds who had a job worked part time. In October 2018, this figure has more than quadrupled to over 44 per cent, adding up to 550,000 young workers. By comparison, among adults 25 years and over, around 16 per cent of those who had a job in 1978 worked part time and this share rose to just over 27 per cent in October 2018.

  • Many part-timers not studying full-time: This change is not because 20-to 24-year olds are studying full-time. More than one in three employed young women and around one in five employed young men, who were not in full time education were in part-time jobs. This equates to more than 260,000 young people who are not full-time students, are employed but only have part-time employment.

  • Rise since GFC: There has been a large increase in the proportion of the young people who are not studying full-time and working part-time hours since 2011, even after the worst effects of the GFC had supposedly dissipated.

  • Steep rise in underemployment over 40 years: In October 2018, 15.9 per cent of workers aged 20–24 were underemployed compared with only 2.4 per cent in 1978 – a more than six-fold rise. Among young women workers, 17.9 per cent reported being underemployed, compared with only 3.2 per cent 40 years ago. The underemployment rate of young men who are working is 14 per cent in October 2018, compared with 1.9 per cent 40 years ago.

  • Marked growth in youth underemployment since GFC: While underemployment among workers aged 25 and over has doubled for women over the past 40 years and tripled for men, much of this change occurred during the 1980s and 1990s. By contrast, underemployment has continued to grow markedly for young people aged 20 to 24, rising from 9.1 per cent in October 2008 to almost 16 per cent in October 2018.

  • Uncertain transition from underemployment to full employment: People who are underemployed do not necessarily move quickly into full employment (full-time work or the desired number of hours), drawing on the most recent analysis of the Melbourne Institute’s longitudinal Household, Income and Labour Dynamics in Australia (HILDA) Survey. Slightly more than half (53 per cent) of people in the survey who were underemployed moved to full employment in one year. After that, fewer and fewer made that transition each year.

  • Rise in part-timers reflects shift to service economy: This has been concentrated in certain occupations, particularly among those who work in community and personal services (such as hospitality workers, fitness trainers, child carers and security guards) and sales workers. Among 20–24 year olds, part-time employment in community and personal services more than doubled over the 20 years, while full-time jobs only increased by one-third.