School, work and young people - the new landscape

Unemployment breeding unemployment

Some areas of WA have such entrenched unemployment that families have never had a bread-winner in continuous work.
    And now the next generation faces life without a job.
    Murdoch labour market expert Phil Lewis is pin-pointing these areas and assessing how unemployment itself fosters unemployment.
    “It’s been 20 years now, in which we have seen high unemployment. Pockets of WA have very high youth unemployment. We are looking into these ‘disadvantaged’ neighbourhoods to find the community effects associated with unemployment,” said Associate Professor Lewis.
    Using census data the researchers can pin-point single neighbourhoods — right down to as few as 225 households — where unemployment has been high for many years. They will then look at the households’ characteristics, like whether the parents are unemployed, household income, ethnic background, whether the families own their homes, educational status and so on, to evaluate the factors related to unemployment.

WA’s vital statistics
	The official youth unemployment rate is 14.4 per cent, although closer scrutiny shows only five per cent of teenagers are neither in work nor some form of education.
	Only 37 per cent of employed teenagers are in full-time jobs, 63 per cent are part-timers (10 years ago the figures were the complete reverse — 68 per cent full-time, 32 per cent part-time).
	Overall employment of teenagers (in Australia) has slumped over the past 10 years by 8.7 per cent, while adult employment has grown 19.3 per cent.
	Most part-time workers are also in full-time education (82.5 per cent).
	66 per cent of youngsters finish Year 12 (only 32 per cent did in 1980).
	By far the main reason why teenagers stay at school is the lack of full-time work.

    Professor Lewis will be assisted by WA Department of Training honours cadet Ross Kelly.

Youth wage rates — the real story

Using sophisticated modelling techniques, Murdoch researchers have shed light on the controversial issue of junior wage rates.
    The Federal Government wants to exempt junior workers from provisions of discrimination laws that come into effect this year outlawing discounted pay rates based on age. The matter is also the subject of an industrial commission hearing and continues to be a political battlefield.
    At a national seminar in Melbourne in March, Murdoch’s Phil Lewis, director of the Centre for Labour Market Research, said scrapping junior rates would hurt some young workers but help others.
    He said modelling had shown that, if all young people were paid the same as adults, 15- and 16-year-old workers would lose jobs, 17-year-olds would be unaffected and 18 and 19-year-olds would increase their chances of work.
    Professor Lewis and Reserve Bank honours cadet Ben Mclean used their model, together with international and Australian studies, to compare the current level of employment of juniors that if the junior rates were removed. The research focused on key issues in employing young people — their ‘substitutability’ (young workers are highly substitutable due to their low skills and high supply) and the proportion of their wages to the total wage bill of a company. Into that equation the researchers introduced various wage rates, resulting in figures for expected employment rates.

What’s the real unemployment rate?

Some figures show youth unemployment at 30 per cent, others reveal figures as low as 5 per cent.
    Getting a proper handle on youth unemployment is a specialist subject that takes into account factors affecting young people.
    In WA last year the official rate was 14.4 per cent. Some pockets of the state have double that figure. The 14.4 per cent represents the number of people who are registered as looking for work as a proportion of the youth workforce (those in jobs plus those looking for jobs).
    However, the number of young people not in jobs and not in some form of training was far less — about 5 per cent — according to the Centre for Labour Market Research.
    Centre Director Phil Lewis said knowing this fact should help policy makers better target their efforts in addressing the issue.

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