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For the young, pandemic is latest act in a spiralling tragedy of opportunity

Even before the pandemic hit, Australia’s young adults were tracking to be the first generation in a century who could not look forward to a better life than their parents. Benjamin Silvester launches our series exploring the impacts of COVID-19 on the lives of 20-somethings, Generation Coronavirus. 

For the young, pandemic is latest act in a spiralling tragedy of opportunity

After years of study, Abby Thorne had just started her first job as a solicitor when coronavirus came along. “It was like this uncontrollable pile of bullshit that just came down on to my world,” Thorne says. “One minute I’m in court, the next day I’m at Centrelink.”

Words by Benjamin Silvester
 

Less than three months into her first job as a lawyer, Abby Thorne, 25, received a glowing performance review. That was on a Friday. By Monday, everything had changed.

On Sunday 22 March, New South Wales announced the closure of all non-essential services within 48 hours. The following afternoon, Thorne’s boss rang to say he was sorry but with the shutdown he just couldn’t keep her on as a solicitor in the regional city of Maitland, north of Sydney.

“It was like this uncontrollable pile of bullshit that just came down on to my world,” Thorne says. “One minute I’m in court, the next day I’m at Centrelink.”

Young people, the group least vulnerable to COVID-19, have suffered the most from its economic fallout. At the crucial moment of transition – from school to work or university, or from tertiary training to a career – they find themselves suddenly adrift, not knowing if the impact will be temporary or permanent.

Anyone younger than 29 wasn’t even born the last time Australia went through a recession, but the Grattan Institute estimates that they will be the group hardest hit during this downturn – particularly women and low-income workers. The latest Australian Bureau of Statistics labour force data, released in August, shows they bore the brunt of the national shutdown, with youth unemployment hitting 16.3 per cent while for older workers it was just 5.8 per cent.

But what makes this moment, and the government’s decisions over the coming months, so crucial, is that young people – particularly those with limited education or skills – were already struggling before COVID-19 hit, tracking to be the first generation of Australians worse off than their parents in more than a century. A decade of wage stagnation and a flatlining job market have hit young people harder than more established Australians, who have been largely insulated by a booming property market and tax policies designed to benefit older people.

The pandemic and economic crisis have brought this vulnerability into relief but it’s a story decades in the making.

In the past 25 years, the average household aged 65 to 74 saw its wealth increase by $800,000. Over the same period, the wealth of young households aged 25 to 34 rose by only $100,000, and over the past decade it stopped growing altogether.

“Largely that’s been a story about house prices,” says the Grattan Institute’s director of budget policy, Danielle Wood. House prices have outpaced wage growth for almost three decades, which has enriched older people already in the market, but made it increasingly difficult for young people to buy in.

Hits to tourism disproportionately hit young people. Jasmine Wise, 24, suddenly found herself out of her jobs as a diving instructor and a part-time waitress.

Hits to tourism disproportionately hit young people. Jasmine Wise, 24, suddenly found herself out of her jobs as a diving instructor and a part-time waitress.

It is less privileged young people who have suffered most.

“Back in the 1980s home ownership rates were pretty constant across the board for young people regardless of income,” Wood says. If you looked at the top fifth and the bottom fifth of income earners, home ownership was around 60 per cent for both groups.

When you look at each group now, the rate for the top fifth still hovers around 60 per cent but for the bottom fifth it has plummeted to just 20 per cent.

“These are pretty significant societal shifts.”

This might imply that young people have been unlucky but 20 years of tax breaks favouring older Australians have consolidated and even driven the wealth gap wider.

“Crises don’t tend to change anything about our society, what they do is reveal the existing weaknesses,” says Emma Dawson, the executive director of the progressive think tank Per Capita.

Between March and May, 316,400, or 16 per cent, of young workers lost their jobs, compared with just 4.6 per cent of workers over 25.

Many young people who managed to hold on to their jobs were forced to work fewer hours than usual, with the rate of underemployment jumping from 21.6 per cent to 27.4 per cent, more than double the rate for older workers.

Young women are more likely to have been affected than young men, with job losses and underemployment rates three points higher in both cases. Young women are also 50 per cent more likely to have left the labour force entirely.

One of the main reasons that young Australians are so vulnerable is that coronavirus has devastated some industries more than others, and those jobs are dominated by young people. For instance, a third of all jobs in accommodation and food services were wiped out between March and April, while more than a quarter of arts and recreation jobs disappeared. More than 50 per cent of workers in these industries are aged under 25. They are also industries that tend to hire casual workers, who can be let go easily in a crisis.

More than half of young Australians in the workforce are casuals – for older workers it’s fewer than one in five – and while the general rate of casual employment hasn’t risen in 20 years, for young people it has grown 30 per cent in the past decade alone.

“Workplace culture and laws in Australia make it much easier to load up the pain of recession on to those with less secure employment contracts,” says Richard Denniss, the chief economist at the Australia Institute.

Jake Walker is one of a million casual workers under the age of 25. In more than six years working as a Sydney-based film grip, Walker has never had a contract longer than five months, but he says the suddenness of the COVID-19 shutdown still caught him off guard.

He usually fills the gaps between film and television jobs doing landscaping work or truck driving, so when the television series he was helping to shoot was shut down in late March he applied for any job he could find. All he got was a string of apologetic rejections: “We’d love to have you but … ”

Jake Walker has worked on short-term contracts in the film industry for six years, but COVID-19 has killed his prospects for work for the foreseeable future. “It’s a garbage feeling,” he says. “There’s a lot of stress.”

Jake Walker has worked on short-term contracts in the film industry for six years, but COVID-19 has killed his prospects for work for the foreseeable future. “It’s a garbage feeling,” he says. “There’s a lot of stress.”

“It’s a garbage feeling,” Walker says. Like many young people who might once have thought they would be independent at this stage of their lives, Walker lives at home, with his parents and five school-age siblings. “There is a lot of stress,” he says.

The tourism industry is reeling from coronavirus and it, too, impacts young people disproportionately. North Queensland is dependent on tourism and Jasmine Wise, 24, a British citizen who had applied for a partner visa with her Australian boyfriend, suddenly found herself out of her jobs as a diving instructor and a part-time waitress. She has applied for “literally anything” but even entry-level jobs are competitive. She has been forced to access her meagre superannuation to survive.

“The young are always hardest hit during economic downturns – needing to make the transition from education to work at a time when there are few new jobs on offer,” says the University of Melbourne labour market economist Jeff Borland.

Borland has studied the fate of young people in the decade after the 2008 global financial crisis, a banking crisis that began in the US and sent worldwide financial markets tumbling. Australia managed to avoid a recession but job growth has been weak ever since.

He argues that since the GFC the economy hasn’t been producing enough new jobs to keep pace with the number of people wanting to work. When jobs are scarce, he says, the people who are already employed have a clear incumbency advantage and, since young people always make up a disproportionate share of jobseekers, they are invariably the group who suffers most.

During the GFC, employment dropped for both younger and older workers, but the decline for workers aged up to 25 was much steeper. While older workers’ prospects bounced back, unemployment proved stubborn for young Australians, and still hasn’t fully recovered. This has meant longer stints of unemployment and increasing reliance on part-time or casual work.

“Young people went into the global financial crisis doing increasingly better than older Australians and came out of it doing increasingly worse,” Borland says.

It’s not all young workers, of course. Those aged 20 to 24 who had a bachelor’s degree after the GFC were basically unaffected. Those without a bachelor’s degree saw their employment drop by 11 percentage points, a deficit they haven’t even come close to reversing – and that’s before the coronavirus crisis.

International studies show that graduates trying to enter the job market in a recession usually end up in lower-paying, poorer-quality jobs than they would have in a strong economy. This initial cut in pay is compounded by having further to climb on the career ladder, setting them back for their entire careers. Economists call it “economic scarring”.

There is a danger this young generation will carry the scars of the coronavirus downturn for “the rest of their working lives”, Borland says.

The scars may not just be economic. A University of Melbourne study tracking the ongoing effects of COVID-19 shows that young people are experiencing much higher levels of depression, anxiety and stress than other age groups.

“There was a lot of evidence of rising levels of stress, anxiety and depression in young people … even before COVID-19,” says Prof Patrick McGorry, the executive director of the youth mental health organisation Orygen. “They’re hugely vulnerable.”

Steven Roberts, a sociologist and expert on young adults from Monash University, agrees. “The GFC taught us that low wages are linked to lower rates of happiness. So there’s a very real chance that a proportion of this generation are going to struggle with wellbeing and life satisfaction, and I think that’s really crushing.”

Ivy-Jane Browne, 22, is a musician just starting her career. Last year she launched her debut EP and this year was awaiting a grant from the Sydney Conservatorium of Music to tour the US. That’s been cancelled, as have planned performances. She also lost her part-time job at the ticketing office of the Sydney Opera House.

She’s reeling and her anxiety has soared. “I’ve had days where I’ve felt incredibly upset and incredibly anxious and just the worst,” she says.

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Scott Morrison acknowledges that today’s young people are in a worse position than those who came of age during the last recession in the early 1990s.

“It was hard,” the prime minister says of the previous downturn. “This is harder. We haven’t seen this before and for many young people who have never experienced that, this is beyond anything they could imagine.”

Yet young people have arguably benefited the least of any age group from the government’s COVID-19 support packages so far. The most significant package, jobkeeper, did include specific support for apprentices and trainees but it failed to cover most of Australia’s 1 million young casual workers.

Then there is the overhaul of university fees, cutting student contributions for what the government calls “job-relevant” degrees including teaching and STEM subjects, while more than doubling them for “popular” courses such as the humanities.

The “budget neutral” program amounts to an effective cut in funding for the crippled university sector and Borland says it is unlikely to assist the younger generation.

“It’s a mechanistic, crude way to adjust what people are doing [and] it’s not even clear it’s going to work.”

Borland says the government should instead be investing in the applied, vocational aspects of university education, which give young people “an opportunity to work out whether a job is a good match to [their] skills”.

Danielle Wood agrees, saying broad-based skills and education programs with government-funded internship and apprenticeship programs built into them would best prepare young people for the job market, especially the underprivileged who have been hit the hardest.

“We have a system that’s dudded young people for too long.”

In late May Morrison announced the “jobmaker” scheme, aimed at overhauling Australia’s training system and filling “skill gaps” in the economy. Wood says she is not convinced it will be enough to make a serious dent in the unemployment problem in the short term.

For lawyer Abby Thorne, unemployment and uncertainty have upended any sense that she was making her way in the world. “I’m an adult, I’m independent, and I’ve always wanted that,” she says.

For lawyer Abby Thorne, unemployment and uncertainty have upended any sense that she was making her way in the world. “I’m an adult, I’m independent, and I’ve always wanted that,” she says.

“The Reserve Bank expects unemployment to climb to 10 per cent by the end of the year and still be above 8 per cent by the end of 2021,” she says. “This is too high for too long.” The changes announced as part of jobmaker “might help in the longer term [but they] aren’t likely to create the jobs we need in the next two years”.

The film grip Jake Walker has wasted no time in expanding his skill set, getting his forklift licence in case the film industry fails to recover. But it pains him to think his years of gripping were “all for nothing”. He loves being a grip but is wondering whether he should retrain in carpentry or air conditioner repair. He worries about the future.

“What happens if this happens again?” he says. “Especially if I want to start a family in the next five or 10 years.”

McGorry also worries about the human impact of the downturn. “Young people have got to have purpose … That’s the key issue, how do we keep people’s hope alive?”

For the young lawyer Abby Thorne, her first job had given her the taste of self-determination she always craved. She knows that as a lawyer – albeit an unemployed one – she is privileged compared with many. But unemployment and uncertainty have upended any sense that she was making her way in the world.

“I’m an adult, I’m independent, and I’ve always wanted that,” she says.

These impacts are intangible. Thorne has no idea what the future might hold.

“It’s almost like my sense of identity is just falling away”.

 

• This project is a result of a partnership between the Guardian Civic Journalism Trust and the Centre for Advancing Journalism at the University of Melbourne. Reporting contributed by: Alyssa Herr, Anthony Marsico, Ashleigh Barraclough, Connor Webster, Else Kennedy, Fia Walsh, Jordyn Beazley, Liam Petterson, Wing Kuang, Petra Stock, Sean Goodwin and Thomas Phillips. 

This series, “Coronavirus Casualties: Spotlight on Youth”, is co-published with The Guardian Australia.

 

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