Youth bearing the brunt of post-pandemic employment decline

Thursday, 4 July 2024

Experts and community leaders say more young people are finding themselves outside of education and employment since the Covid-19 pandemic.

Stats NZ data released this week showed people aged 15 to 19 filled the fewest number of jobs in May, down 10.7% on last May (down 15,088 jobs).

Council of Trade Unions (CTU) economist and director of policy Craig Renney said the issue was likely to get worse.

‘The data says there is a real problem here,” Renney told The Post, and “record low unemployment” during Covid could be to blame.

“From March 2021, youth employment increases really quickly, so by September 2022 there is 20% growth in 15 to 19-year-olds filling jobs on the previous year,” Renney said.

But “economic turbulence” after the pandemic resulted in youth employment dropping below normal levels around August 2023, he said. “A tight labour market sucked a lot of young people into work and now those jobs are disappearing.”

Since 2008, the unemployment rate for 15 to 19-year-olds was at a 20% average and peaked at almost 29% in 2012.

Since last March, unemployment for that group rose from 16.9% to 23.1%

Renney said the pandemic saw many young people opting for short-term work during their “prime years for education” because of cost of living pressures. “These could have been teenagers working because households needed income.”

But he added that if young people were working, they might have missed the chance to get into tertiary education and long-term work.

“If young people didn’t take advantage of training and apprenticeships at that time, income for the rest of their lives is affected,” Renney said.

“The opportunity has passed. If unemployment rises and the rise is concentrated among young people, what does that do for rest of their careers?”

Cost of living

Ōtara Youth Hub manager Victoria Hearn said more young people were struggling to get into secure work because they had missed their window for education.

At-home learning during the pandemic meant many young people didn’t have access to resources such as wifi and devices, Hearn said.

“Because of Covid, a lot of young people didn’t achieve the NCEA results they would have if the pandemic didn’t happen.

“Young people without access really struggled,” she said. “By the time school came back around, they struggled to keep up and many didn’t go back to learning.”

Young people, particularly in south Auckland, dropped out of school to get into short-term work, she said.

“Kids as young as 14 are working, either helping with family businesses or other work … It’s harder for some to get a job if they’re lacking formal education,” she said.

Ōtara Youth Hub upskilled young people to help them transition to long-term employment.

“We are working with people to get first aid certificates, drivers’ licences, forklift licences, and other tertiary study that doesn’t need high school qualifications,” Hearn said.

“We want to see people in better jobs and to motivate them to think about their career, not just getting into entry-level work and staying there.”

Reduced government support

Renney said a lack of strategic action from the Government would make it harder for young people to gain meaningful employment.

Waiving fees for apprenticeships and first-year tuition would be more helpful to meet education and training costs than the Government’s current final year of free tuition, especially as a 6% fee increase loomed.

“It is making it harder at a time when many kids missed the direct pathway because of the tight labour market,” he said.

With unemployment levels projected to rise to 5% this year, Renney said a lack of Government support will make things worse for young people.

“There is nothing in the budget to help young people get into work. Access to the labour market is not getting better for these people, it is getting worse.”

Risk of social exclusion

AUT director of the New Zealand policy research centre and economics professor Gail Pacheco said young people were often at the mercy of the recessionary environment.

“Youth, women and ethnic minorities tend to fare worse in economic downturns,” Pacheco said.

“A key group to be concerned about are those that are not in employment, education or training (Neet),” she said. “They are at risk of being socially excluded.”

The Neet rate had risen to 12.4% from 10.9% at the same time last year.

Pacheco said the key problem with youth unemployment and Neet was that it could negatively impact employment and earnings in years to come.

The Tertiary Education and Skills Ministery Penny Simmonds told The Post in a statement the Government was focused on growth by “stopping wasteful government spending, investing in frontline services, and delivering tax relief to help hard working Kiwis with the cost of living.”

“A high performing tertiary sector is a vital part in the Government’s plan to rebuild the economy,” Simmonds said.

When asked if Budget 2024 adequately supported young people getting into work and education, she said it “sets the path for a sustainable tertiary education sector“