Almost eight years after the 2008 financial crisis, young Australians still face a significantly tougher job market than before the crisis. To illustrate, the employment-to-population ratio for young Australians aged 15 to 24 remains well below rates experienced prior to the crisis (see figure below based on the latest ABS Labour Force data released last Thursday). The crisis and resulting loss in business confidence saw a sharp fall in the employment-to-population ratio for young people over 2008-09, and after that it continued to decline (more gradually) before starting to recover over the last 1-2 years. It is arguable that industrial relations changes, particularly the introduction of the 2009 Fair Work Act, have constrained employment opportunities for young people to some extent in the post-financial crisis years.
On 612 ABC Brisbane last Tuesday morning, in an excellent interview regarding Queensland’s high rates of youth unemployment in many regions, CCIQ’s Director of Advocacy Nick Behrens highlighted several ways that IR rules are constraining employment growth. For example, Nick noted that minimum engagement periods (e.g. an employee must be given a shift of three hours at least) are too long, and this rules out some employment opportunities, such as two hours of employment after-school for a young person. Hence, Nick recommends lowering the minimum engagement period. Also, Nick advocates reinstating junior rates of pay for twenty-year old retail workers and adopting the Productivity Commission’s recent recommendations regarding penalty rates. Finally, Nick is concerned about recent increases in first and second year apprentice pay rates that have made them unaffordable to some employers.
IR changes along the lines recommended by CCIQ would no doubt be unpopular with many, particularly with current workers who would lose out, but changes such as those recommended should be considered if we are genuine about improving employment opportunities for young Australians.