‘No-one is willing to hire us’: Youth employment prospects crunched

Friday, 9 August 2024

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While general unemployment continues to edge up, rising youth unemployment is hitting younger workers the hardest, with younger workers struggling to get work, the latest unemployment figures show.

Labour market data released on Wednesday showed almost half of increasing unemployment was accounted for by people aged 15 to 24.

Just over a fifth of 15 to 19-year-olds are unemployed and the proportion of 15 to 24-year-olds not in employment, education or training is 12.8%, up from 11.7% over the year.

It comes as New Zealand’s official unemployment rate edged up to 4.6% in three months to the end of June from 4.4% in three months to the end of March according to Stats NZ.

“A big lift in youth unemployment should act as a wake up call to the Government,” Council of Trade Unions economist Craig Renney, who worked for former Labour minister of finance Grant Robertson, said.

“Big lifts in youth unemployment are usually a signal that there will be lift in general unemployment,” Renney said.

The number of unemployed people aged between 15 and 24 years was up 14,400 over the year, bringing unemployment rate for 15-19 years old to 20.7% from last year’s 15.1%, while unemployment for 20-24 year olds came in at 8% compared to 5.8% last year.

The rise coincides with a slowdown in part time employment to 1.5% down from 10.1% last year.

“Unemployment has scarring impacts on young people that will affect them for the rest of their lives.”

He said businesses often have a ‘last-in, first-out’ rule when it comes to job cuts, which can impact even highly skilled young people.

Last in, first out

One Wellington-based graphic designer (25) said she has been at her current job since the start of the year. She declined to be named because her role may already be on the chopping block.

“I know my job is on the line. They’re culling a lot of people.”

She got the job after a year of looking for work and freelancing.

“I applied for a lot of jobs but never got anywhere. They would say I didn’t have enough experience,” she said.

She decided to take on freelance work “because going on the benefit was so much harder” than when she had finished university.

Benefits can be cut for not attending seminars, failing to apply for suggested jobs, or failing to answer recruitment calls.

“I wasn’t on the benefit after a while because it was such a struggle to get,” she said.

She looked at jobs in Australia last year and plans to move across the ditch if employment at home remains insecure.

Renney said the loss of the future workforce is a major concern in periods of high youth unemployment.

The experience paradox

Ongoing economic uncertainty for businesses feeds into higher levels of youth unemployment with employers less willing to take a punt on young workers, he said.

A 24-year-old Auckland-based microbiologist declined to be named due to ongoing visa issues for her plans to move overseas for better employment opportunities.

“No-one is willing to hire us to get the experience,” she said.

“There are not many employers that want to hire people who have just graduated. But if I don’t get the opportunity, how can I get experience?” she said.

She left a job in microbiology last year to pursue further study but found fees were much higher.

“I wanted to study postgrad, but it was too expensive.”

After that, she found the labour market to be much tighter than the year before.

Even short-term temp contracts had “no protections for employees” and came with the caveat of being dropped at any time by the company, she said.

“I applied for anything I had experience in - reception, admin, customer service.”

She said employers also had a habit of advertising jobs for short periods.

“I initially wanted to do lab jobs…They would advertise jobs and as soon as I would apply, they would tell me the job has been filled.”

She progressed through the interview process with some retailers but with disappointing results, as she said many were taking expressions of interest.

“There’s no job available. They’re scouting talent so they have people when they need them, which is frustrating when you really think you’ ve been put through for an interview.”

Careers adviser David Trought said many people aged 15 to 24 are taking slightly lower level jobs than they’re qualified for.

“It’s harder to find a job if you haven’t got one in first place. That’s why you might need a stepping stone between jobs,” Trought said.

He said the biggest barrier for young people to find work is “the number of people applying for each role”: “If lots of people going for it, the quality of an application has to better to be taken seriously”.

Traditional entrances into employment like construction, retail, and local government jobs are particularly squeezed making it harder to find a starting off point, Trought said.

Employer politics

Wellington-based Zafirah Talim (25) said she left a government job in communications when the coalition government was elected.

“The general feeling at the time was that it was last one in, first one out,” Talim said.

“I left government because I didn’t want to be restructured, but that’s what I walked into.”

She said economic pressures and layoffs meant she was doing the jobs of a whole team on her own.

“It got to point where it was just too much for one person. Even though the market is shit, I decided I was going to leave.”

Talim said the situation had an extreme impact on her mental health.

“I had to take sick days even near the end because it was too much mentally.”

Trought said more young people are dealing with added stress and mental health pressure from the tight job market and squeezed businesses.

“There’s a lot of people who have to leave jobs because of management,” he said.

“Businesses are losing good people because staff are not being treated right.”

“In a tight labour market, those workers are hard to find as they’re often highly skilled,” Trought said.

The volume of applicants for a single role is the biggest barrier to get a job, he said.

Kiwibank economists Mary-Jo Vergara and Sabrina Delgado said unemployment is still on track to exceed 5% by the end of the year.

“Amid the prolonged recession, there’s risks of an even higher peak. And as the unemployment rate drifts higher, so too does the risk of a hard landing,” Vergara and Delgado said.

“It’s just another piece of evidence proving that a pivot in monetary policy is well past due. The labour market is crumbling under the weight of the RBNZ’s heavy-handed interest rates.”

“We recommend a cut next week… We're not convinced the RBNZ will pull the trigger next week. They should. But it's still unlikely.”