Youth unemployment and underemployment – a worrying trend in Aotearoa New Zealand

Written by Dr Pushpa Wood ONZM (Director) NZ Fin-Ed Centre, Massey University

For the past decade, I have been observing a worrying trend where vulnerability among young people has been increasing steadily, despite government’s effort to decrease this trend.

Data from the most recent Labour Markets Statistics (Working Life) Survey published in 2019, shows some worrying stats:

Almost half (47.6%) of casual workers who responded in the workers were youth aged 15 – 24 years,  and a further 26% of them were engaged in th fixed and temping jobs. If we are to combine both these stats, it is rather concerning that over 73% of young people surveyed were not gainfully employed and did not necessarily have an experience of, or prospect of moving into the full time, long-term stable employment. If we are then to include those aged 25-34 years, who answered the survey, we end up with 63.2%of  young people as casual workers and 50% of young people in fixed-term employment.

A report investigating ways to improve interventions for youth who are likely to experience poorer than average employment [Not just about NEETs: A rapid review of evidence on what works for youth at risk of limited employment, 2019] caused me further concern as it showed that while most will only be in limited employment for a specific period, some are likely to spend most of their life in limited employment. By the age of 24 :

1. 8% were in limited employment every year since they were 16 and can be considered at high risk of lifetime limited employment (the proportion was 16% for Māori and 10% for Pacific)
2. 15% were in limited employment for the majority of years since they were 16 and can be considered at medium risk of lifetime limited employment (the proportion was 27% for Māori and 21% for Pacific)
3. 12% were in limited employment for less than half of the years since they were 16 and can be considered at low risk of lifetime limited employment (the proportion was 7% for Māori and 11% for Pacific).

Employment NZ also argued that the jobs available to young people may not give them promotions or development opportunities. It is also often hard to get a decent entry level job with no experience. Against this backdrop of the data, it is reasonable to assume that young people are faced with:

• until the age of 30 – a lack of opportunities for permanent, reasonable paying jobs with the prospect of promotions earning below median income
• a lack of entry level jobs that offer earn and learn opportunities
• a lack of availability of good quality job with provision for saving for their future

Unfortunately, these negative concerns have only been exacerbated by the recent COVID -19 lockdowns and health impacts. Māori, Pasifika, and youth have experienced job losses, reduced work, and decreased personal income during COVID-19. Particularly noteworthy is that youth aged 18-26 years (31%) and renters (29%) were likely to be more at risk for reduced income level. Personally, I believe that disadvantaged groups – often women and young people – are seen as the ‘easiest workforce’ to replace, and the cheapest as due to the nature of their short to medium term and/or casual contracts, they not have the luxury of job protection and/or security. In most case the employers don’t need to give them notice or redundancy payment due to the nature of their employment status. To complicate the issue, young people are further disadvantaged if there are no new job openings during the time of crisis. Plus, youth in lower paid, casual work don’t generally have a luxury of being able to work from home due to – either because of the nature of their work and home environment is not conducive to working from home.

Financial capability works well when you have finances to work with. How can we teach youth to budget and save if they do not have enough to meet their necessary needs? They do not have enough finances to meet their needs, because their ability to improve their income level due to the factors outlined above. Moving forward here are my expectations for improvement:

• Agencies engaged in working with youth to increase chances of long-term employment need a future focussed, needs based approach; keeping in mind that needs do change over time and according to circumstances.
• Interventions need to be designed and determined with input from those who will be the participants in these interventions i.e., youth voice.
• Funding models need to encourage innovation, collaboration, and sustainable approaches.
• The youth employability agenda needs to move away from an ‘engagement only’ approach to an outcomes-based model as policy makers need to shift their focus from ‘outputs’ to ‘outcomes’.
• There needs to an alignment between the government response, community response, private sector, and employer response and youth response. Each may have different expectations and intervention response but the outcomes from all these need to move in the same direction
• The compartmentalised approach with different government agencies engaged in improving employment outcomes for young people has been tried, but now it is time for a holistic ‘all of government’ approach. Some serious thinking needs to take place as to what will it look like and the role youth themselves will play in determining this approach and subsequent interventions.
• Government and other agencies active in this area will need to shift their thinking from having a ‘short-term horizon’ for outputs to a ‘long-term, multi-faceted and outcome’ focussed funding model and interventions.

We have an opportunity to do things differently, recognise what COVID-19 has taught us, pay attention to the shortcomings it has identified and move forward with our youth, not for them.