Young to shoulder coronanomics burden

While the worst health effects of covid are suffered by the elderly, the brunt of economic pain inflicts the young.
Young workers are more likely to lose work, have least financial resources to lean on, and are least competitive job-searchers once the crisis abates. They will also shoulder the debt burden from the fiscal wreckage for much of their working lives.
During ordinary cyclical downturns, young people disproportionately suffer job losses — with less experience and fewer protections than more mature workers.
And in this abnormal coronacrisis shutdown it’s even worse, since the industries most heavily impacted — hospitality, retail, arts and entertainment — are considerably overrepresented by younger workers. ABS data shows that workers under 20 (18.5%) and between 20-29 (11.8%) have shouldered considerable job losses already.
It’s true generous welfare payments are assisting them — from income support to students and the JobKeeper payment for those displaced from work. That will cushion the financial blow in the short term, including a temporary bonus for some (though many young workers are also short-term casuals, meaning they’re ineligible for JobKeeper).
But the pain is really felt by young workers — especially those without university qualifications — by a heightened risk of long-term unemployment and reduced earnings. Research shows they face a persistent penalty in labour market outcomes years into the economic recovery. Once economic normalcy returns, they’re more likely be forced into part-time work, to accept work out of their desired field, or to retrain.
It’s not just young people already working that suffer. Research shows that graduates during recessions are much less likely to gain employment or work experience — many permanently underutilising their qualifications.
And that’s before counting the educational cost to both adult and school students due to the current learning disruption — especially for those in vocational training, reliant on practical applications unable to be replicated online.
But the most at risk are young people already seeking work prior to the virus hit. Their job search prospects could be grim — with more job-ready candidates competing for available positions. A prolonged job search could disillusion many and see them drop out of the workforce entirely. Entrenched disadvantage of this sort comes with a huge human, economic, and fiscal cost that proactive welfare policy must address.
Yet, successive reports to government have highlighted that inflexible welfare and employment services systems haven’t kept pace with the needs of job seekers and employers. In particular, the McClure review of the welfare system noted the failure to identify groups at risk of welfare dependence.
Look no further than southern Europe to witness the consequences of unaddressed adverse youth outcomes from recession — with huge numbers never finding gainful employment since the GFC.
Welfare policy in the virus crisis and beyond must be better targeted to prevent an epidemic of youth welfare dependence.