Youth unemployment at 11.1 percent and economists watching for more rises as the economy softens

Young people struggling to find work can be the canary in the coal mine for the rest of the jobs market, and a recent rise in Australia's youth unemployment rate could be a sign of things to come. Bureau of Statistics data for September showed youth unemployment at 11.1 per cent, compared with an overall unemployment rate of 4.7 per cent. While still lower than before the pandemic, a slowing economy could push youth unemployment higher in the coming months, economists say.

'We tend to see younger workers affected more heavily when there is a slowdown,' said Blair Chapman, chief economist at the jobs website SEEK, while Commonwealth Bank economist Harry Ottley said the youth unemployment rate was 'definitely rising more quickly than other cohorts'. The rise has come alongside continued job growth for young people: the share of young people in work is 63.6 per cent, down from a peak of 66.7 per cent in November 2022 but well above its 2019 average of 59.7 per cent, and youth participation is high at 71.4 per cent compared with 67.7 per cent in 2019 - meaning more young people are in the labour market looking for work.

Hundreds of applications, constant rejection

The human side of the numbers is visible in cases like that of Lachlan Riddell, 24, of Tasmania, who estimates he has applied for hundreds of jobs over the past three years, from collecting supermarket trolleys to retail and hospitality roles, and describes experiencing what he calls 'job hunting depression'. He holds a Diploma of Music and works casually as an audio-visual technician, but shifts are sporadic; he says most applications are online, that he rarely receives a response, and that many companies now use artificial intelligence in their hiring process - 'I'm not even talking to a real human' - while in Tasmania's small jobs market success can depend less on what you know than who you know. He says he is struggling to make ends meet on his Jobseeker payment and relies on support from his fiancee. Graduate job advertisements have also been trending down after post-pandemic highs, with anecdotal evidence that several larger firms, including the big four accounting firms, have reduced graduate intakes in response to declines in demand, Mr Chapman said. Riddell rejects the idea that Generation Z does not want to work or is too selective about jobs.

AI, and competition from multiple job holders

Fears that artificial intelligence could bring a jobs apocalypse, particularly for young and white-collar workers, are not yet borne out in Australia: a Department of Employment and Workplace Relations study released in July found the technology was not yet causing broad disruption to the labour market, and that jobs for people aged 20 to 24 had grown slightly faster than those for people 25 and over since the introduction of ChatGPT, with young graduate outcomes remaining resilient. But the report cited American evidence suggesting young people have experienced slower employment growth than older people since the arrival of generative AI tools, especially in occupations more exposed to AI, and Mr Ottley said he expected 'some job disruption at the margin' over the next five years; Qantas last week announced 850 job cuts and plans to accelerate its use of AI. Skills and Training Minister Andrew Giles said AI was mostly augmenting jobs, 'changing the way in which a job is done rather than completely automating a job', and that workers must be equipped to manage the transition. Young people also face increasing competition from existing job holders: one million people in Australia now hold multiple jobs. Advisers urge students to engage with the job market well before graduating, noting many employers open graduate-program applications a year early, and that casual work, networking and workplace skills all count.

Students are advised to watch relevant employers while studying for internships, vacation programmes and work-integrated learning. Casual or part-time work can demonstrate communication, reliability, problem-solving, customer service and the ability to manage competing priorities even when it is outside a preferred career. Alumni contacts, industry events, professional associations and conversations with people already working in a field can help students understand the market. Giles also urged young people to identify sectors with vacancies.