Young people have had to settle for jobs of lesser quality following the global financial crisis compared to the generations before them, a government report claims, offering some insight into a job market upended by COVID-19.
Graduates aged 20 to 34 had a harder time getting a job in their field in the ten years that followed the Global Financial Crisis, a Productivity Commission paper released this week found.
“If they started in a less attractive occupation, it was even harder than before 2008 to climb the occupation ladder,” Michael Brennan said, chair of the Productivity Commission.
“This suggests that poor initial opportunities could have serious long-term consequences.”
The findings of the paper ‘Climbing the jobs ladder slower: Young people in a weak labour market’ are more relevant now, Mr Brennan said, as it offers an idea on what career challenges young adults will face in a recession brought on by the COVID-19 coronavirus.
“Many young people have experienced unemployment recently, and are likely to face a reduced set of job (and salary) opportunities as a result of the recession,” he said.
“This scarring could last some time.”
Workers aged 20 to 34 experienced nearly zero real wage growth from 2008 to 2018, the report found, and workers aged 15 to 24 experienced a ‘large’ decline in full-time work. Part time work increased.
It was unlikely people ‘scarred’ by the job market would graduate to a better outcome, the report said, indicating they were likely to suffer long term career and salary prospects.
The Productivity Commission, which is the “principal review and advisory body on microeconomic policy, regulation and a range of other social and environmental issues,” was meant to present the findings at the Reserve Bank of Australia’s annual conference in April.
“The COVID-19 pandemic interrupted the conference,” the report said, ”but the central issue at the heart of the analysis, the scarring effects on young people of poor labour-market outcomes, has become even more relevant.”
Ways to protect your future finances
If you’re concerned about your financial future as Australia rolls through a recession, you’re not alone. There are many options available to you, but the best path to take may depend on your personal situation and financial goals. It’s always important to compare different financial options and to consider seeking professional advice before making any changes to your finances.
Strugglers who are looking to quickly put together an emergency savings fund may want to prioritise high-interest savings accounts with low or no fees. That said, it’s also important to look at the terms and conditions for the account’s bonus rate, to work out if you’ll likely be in a position to maximise the interest you can earn on your savings.
Simplifiers and Opportunists who want to reassess their finances may also be interested in savings accounts with higher interest rates, which could be used to help protect money for use in the future. Services that can help track saving and spending could also be appreciated by those wanting to manage their money more smoothly. Some smartphone apps, such as Google Pay, Samsung Pay, or Apple Pay can be useful, and many banks have saving and spending trackers built into their own apps or internet banking options.
Mark Bristow contributed to this news article