Generation Y are at risk of becoming the first generation in modern history to be worse off than their parents
Jennifer Rayner writes below a long and well-informed article about the difficulties young people have in getting good jobs. She says that something must be done but has no idea what. So I thought I might mention some of the things that could and should be done to improve the prospects of the young.
I have mentioned previously how important useful education is. If kids learnt at school how to program a computer instead of learning how to save the planet or explore their sexuality, there would be a huge improvement. I mentioned previously that my son got a job within hours of making his first job application as a "developer" (computer programmer). The course he did left him with an accomplished body of work on the net and that was gold to prospective employers. And $200,000 a year is a reasonable expectation for him in the fulness of time.
So being useful is the ultra-simple recipe for getting a good job. In fact, if you are useful, jobs can emerge. A job that was never advertised can materialize out of thin air if someone knows you are useful. When I moved from Brisbane to Sydney many years ago, I wanted a job so looked up a Sydney businessman I knew and asked him if he needed anybody. He knew that I was at that time something of an expert on die-head chasers (Don't ask. It's in mechanical engineering) so his respect for that skill caused him to invent a job for me immediately.
So the number one thing that an individual can do for themselves is to choose their education with realistic and practical goals in mind.
But there are also things that the government could do. The simplest would be to abolish the minimum wage. Many skills cannot really be taught at school. They have to be learnt on the job. I learnt about die-head chasers through working in a transmission machinery firm. So that is the famous "experience" that employers demand. They want you to have job knowledge. But how can you get that experience? Without a statutory minimum wage you could negotiate a very low initial wage that would make it worthwhile for an employer to take you on while you gain experience. And once you have that experience you can move up.
Unpaid "internships" are being used for "experience" purposes to some degree lately but wouldn't it be better to earn SOME money in your first job? And unpaid internships are basically possible only for kids with rich parents.
And a HUGE problem for the young these days is the high cost of housing. But that could rapidly be ameliorated by governments too: Stop all immigration. Australia has a high rate of immigration and home building cannot keep up. So you effectively have an ever larger number of people to be accommodated and an almost fixed stock of housing to accommodate them. And we all know what higher demand does without a commensurate increase in supply: Prices rise. It's the good old and completely unrepealable law of supply and demand. And stopping all immigration, or almost all, would be popular too.
Neither of the government actions I have mentioned are likely to happen so perhaps I can point to some areas of hope.
One of the big things holding up housing provision is land use restriction -- "zoning" enforced by local councils and State governments. This is a well-known bottleneck and councils are hopefully increasingly aware of how destructive such policies are. Greenies are one of the major groups obstructing release of land for housing but they never relent on anything. They just have to be defeated politically.
But most hopefully of all, the flood of Chinese money coming in to support apartment construction at the moment should knock down both rents and purchase prices in the not too distant future. Apartment building are springing up like mushrooms in the major capital cities at the moment. All that extra supply should lower prices
I WILL be 30 soon. At that age my mum and dad were settled, prosperous parents of three. Homeowners; tenured workers tucking away super and long service leave; possessors of both everyday and special-occasion cutlery.
I see now that they were the benchmark I instinctively set my expectations against. Growing up in the striving suburbia of Hawke and Howard, I never doubted that my friends and I would lead lives that eclipsed theirs.
I didn’t doubt we’d continue the golden trend tracing back to the Great Depression, yet another Australian generation to enjoy more wealth and opportunity than our parents did.
I doubt it now.
As I look around the bar on a Friday after five, I see none of the steady satisfaction that brimmed from my parents and their peers. Instead, I see young people squeezed by creeping pressures not of their making and largely beyond their control.
I find 20-somethings living out an ever-extending adolescence as the building blocks for a stable, comfortable life slip further from their reach. I hear brittle laughter at black jokes about renting till 50 and retiring beyond the grave.
I see my generation becoming the first in more than 80 years to go backwards in work, wealth and wellbeing.
This is not a whine from entitled Generation Y. If you’re already firing up to dismiss the article in those terms, stay your snark for a moment.
This is a warning about the waves of demographic, economic and social change that are already breaking over young Australians. Left unchecked, these changes will lead to rising intergenerational inequality in this country.
Just as we have seen a growing gap between rich and poor over recent decades, we’re beginning to see young and old pull apart in ways that will wear out our communal bonds.
If you’re uncomfortable taking a young woman’s word for it, allow me to deliver you the same message from an old white man instead.
In February 2014, leading economist and Deloitte Access Economics director Chris Richardson told the Australian Financial Review: “There is a stunning generational unfairness in our settings, and all those disengaged young Australians need to wake up to the fact they’re being massively screwed.”
It isn’t just young Australians who need to wake up to this fact. It’s all of us. This country is so busy planning for the looming grey tsunami that we’re letting an entire generation fall behind. If we don’t think harder about building a future for the old and the young, my friends and I will be just the first of many generations to face lives of shrinking opportunity.
I don’t believe Australians want that. I think we want to be a country that does right by all its people; a community that can take care of the old without making second-class citizens of the young.
To do that, we first need to recognise where we’re going wrong. Then we need to find the will to fix it.
Some things I gained in five years juggling multiple jobs in restaurants and bars: a revulsion for the milkysweet smell of Baileys. The ability to count up to 20 in Thai. A sixth sense about which ones will be waiting for you in the car park at the end of your shift.
Things I did not gain: more than $3000 in superannuation. Sick leave. Permanent work or transferable skills.
My time as a casual worker in striplit kitchens and gummyfloored bars was mercifully brief compared with that of some of my friends, who are still pulling beers as our 30s loom. It paid the bills (just) while I studied and kept me from relying too heavily on the grudging beneficence of Centrelink.
In truth, I remember only bits and pieces about the individual jobs. But what clings to those years like a sour incense is the memory of how utterly powerless I felt.
I could do nothing when the manager called at 8am to say I wouldn’t be needed that day. I had no recourse when I was sent to work in the smoking lounge of the pub despite asthma that had me gasping for air by the end of my shift. I had little option but to agree when the boss suggested I’d be better off getting paid cash in hand with no tax questions asked.
Throughout those years, if I was sick: that was my problem. If I couldn’t make a shift: there were often no more after that. If I had a concern, a complaint or even a question: no one wanted to hear it.
That powerlessness is what hundreds of thousands of young Australians feel as they try to navigate their first steps into the job market.
Economics editor of The Australian David Uren argues it is now harder for young people to get reliable, well-paid work than at any time in the past 20 years — and back then there was a vast recession on. Many of the doorways that our parents and grandparents passed through on their way to full employment have been closed and bricked up for good.
That’s because the world of work is changing; everyone knows this.
We feel it like an absence, a growing blank space at the centre of our economic life. The awareness seeps into those of us who’ve joined the job market more recently through the growing drought of permanent positions, the ceaseless hustle for that next contract role, the pressure to update skills we’ve only just attained. It is the product of structural and technological tides that no country can entirely levee against.
But while the changing nature of work affects us all, not all of us have been equally affected. Rather, Australians in their late teens and 20s have lost far more ground than others. The gap between green workers and grey ones is widening on measures of underemployment, wage growth and casualisation.
Taken together, these trends risk creating a working underclass of the young.
Take underemployment, for example. Being underemployed might be preferable to having no work at all, but plenty of people will tell you that it’s a stressful and grinding life.
Underemployment is particularly rife in sectors like hospitality and retail, where shifts can get cut with a few minutes’ notice if the customers aren’t flowing.
I once worked a waitressing job where my weekly hours ranged from 10 to 25 depending on how badly the business was going that week. On those paydays when my envelope had only a couple of yellow notes in it, I’d stuff stock cubes and dried shrimps from the restaurant’s kitchen into my pockets on the way out the door. You can make a surprisingly tasty soup by boiling those ingredients with a kettle of Maggi noodles.
There have always been more young Australians struggling to get enough work than older ones, but where fewer than one in 30 young people said they were underemployed in the 1970s, the figure now stands at about one in six.
The most obvious and direct impact of underemployment is money; or rather, the lack of it.
Having insufficient work means living payday to payday, with little or nothing left over at the end of each week to put aside. This leads to a reliance on credit cards to cover costs like uni books and bills, and loans when a car breaks down or a bond must be paid.
Young Australians are carrying more debt than ever before. The escalating problem of underemployment is one reason so many of my peers can’t get ahead financially.
There’s been plenty of fiery debate in recent years about the growing gap between the “1 per cent” and the rest of us. But I’ve yet to see anyone point out that wage inequality is also mushrooming between different age groups.
The gap is opening up because over the past two decades wage growth has been much slower for young workers than for their elders.
Adjusted to 2013 dollars, weekly mean fulltime earnings for people in their early 20s grew by $190 between 1990 and 2013. But for people in their early 50s, wages grew by $577. Older Australians now earn more than $600 a week more than younger workers, up from just $220 a week more 20 years ago.
None of this is intentional. No dastardly government set out to design the difficult job market young Australians are struggling to enter today (although some have been blithely indifferent to how their policies have exacerbated the problem).
It’s just sour luck that there have been enormous structural changes in employment over the past 30 years; changes that have primarily hit the lower end of the job market, where young people seek a first foothold.
The rise in underemployment and casual work among 20-somethings (and to some extent, higher unemployment) stems from the loss of quality low-skill white and blue collar jobs that gave many of our parents their pathway into the job market.
With those jobs gone, we are forced to gather instead in industries where work is less secure. Casual jobs in insecure sectors like hospitality and retail don’t only come with fewer rights and conditions. They also offer fewer opportunities for skills development and career advancement.
Young people who start their working lives here risk getting stuck in a cycle of insecure work as they grow older, watching mutely as better-trained workers move on and up.
Our nation is not unique in this; almost every advanced economy is dealing with similar structural shifts in employment thanks to changing technology and globalisation. But that doesn’t mean we’re powerless to tackle the inequalities this is creating.
In May 2015 current Secretary of the Department of Prime Minister and Cabinet Martin Parkinson got to his feet to deliver the graduating address at the University of Adelaide. This is what he told the bright, accomplished young men and women who sat before him on the cusp of their adult lives:
“My generation has failed you ... despite having benefited from massive growth in living standards, income and wealth. We rode the benefits of others’ reform efforts, and thought that success was our doing,” he said.
“In the process, we conflated self-interest with national interest. We lost sight of the big picture and applauded the things that made me better off, irrespective of the cost to others in our community, or to future generations ... your generation is at risk of being the first in modern history whose living standards will be lower than those of their parents ... And the longer we wait to address today’s challenges ... the greater the damage wilfully being done to future living standards.”
I don’t think a more honest set of sentences has been spoken by an Australian public figure in at least a decade.
Mr Parkinson was prepared to face up to something we all need now to admit: things can’t go on as they are. We are seeing the development of a lopsided Australia where young and old live differently.
Good jobs, comfortable wealth and the wellbeing that comes with both are increasingly being concentrated in the arthritic hands of older people. Meanwhile, younger Australians are forced to live with less: crappier work, lower wealth and worse wellbeing.
This inequality is already a reality for my generation. I can’t stress enough that we carry the weight of it heavily. We experience the unfairness daily in the gap between our means and the milestones of traditional adulthood. We sense it in the divergence between our aspirations and the opportunities in front of us.
If we don’t do something about these problems, those coming after us will know deeper inequity still.