The warnings are coming in thick and fast: the economy is at risk of going bust. Quick, stash your cash away for that rainy day! Mind your job while you're at it, too. But maybe all's not that bad: The Australian Financial Review reports today that there was a net loss of 100 jobs in 2011. It doesn't sound like a terrible lot, does it?
No, it doesn't. But when put in context, it's not a great sign. Usually jobs are being created; lots of them, at that. In fact, it's been 19 years – since we were listening to Boyz II Men in our bedrooms in 1992 – that the jobs market has created so few new positions. In 2010, 370,000 new jobs were created. Last month, 29,300 were shed. What gives?
Quite obviously, the faltering European economy has made employers nervous about enlarging their workforces; some are rationalising, some are downsizing. Hiring is happening, but on the cautious side. The unemployment rate currently sits at 5.2 per cent.
"We are an economy with strong fundamentals, we've got growth, we've got low unemployment," a confident Julia Gillard was quick to remind us. "Look around the world we're talking about unemployment just over five per cent. In the euro zone they're talking about it at 10 per cent, the Americans more than eight per cent."
But despite the relative stability of home-soil, we also have to factor in the taking of jobs off-shore, the loss and viability of 'old economy' jobs relative to new economy jobs creation (Amazon is reportedly in talks to set up an Aussie-based website), and the structure of employment (24,500 full-time jobs were created in December; 53,700 part-time jobs were lost).
There has also been exodus from the labour market itself with the jobs participation rate shrinking to 65.2 per cent. Mining is not the match for everyone's skill set, and nor is health which is doing well, while retail stores have shed staff and cut hours (some staff opting out altogether), manufacturing is on Struggle Street and the banking sector has felt the pinch, too.
National Australia Bank economist Alexandra Knight told The Sydney Morning Herald job-seekers were giving up looking for positions, which is reflected in domestic labour market data. "It shows there has been a bit of 'discouraged worker' effect because we've seen the participation rate fall as well as the unemployment rate," she said.
Then there was the Queensland floods.
"All my staff lost their jobs," said Lauren Jays, manager of Toowoomba's Coffee Club. "They were all casuals, so they had to go and fend for themselves and look for other jobs. I was happy that I got to keep my job, but I had to say goodbye to a lot of people. You can’t pay for a business that’s not running."
While Coffee Club has since re-hired some "pre-flood" staff, and over 30 casual staff for the re-opening of the store, the event took its toll on sentiment.
"We had a customer today say, ‘Isn’t the re-opening a celebration for you?’ One of my staff said, ‘No, I lost my job for six months and I struggled because I had nowhere to go.’ I kind of feel the same; I was happy that I got to keep my job, but I had to say goodbye to a lot of people and we couldn’t do anything."
The banking sector is expected to contract in 2012 with ANZ planning to trim 1,000 roles of its payroll and Westpac cutting 600 positions. No wonder our friend Courtney is feeling tense about leaving university and wading into the jobs market.
A small concession: at least we are not facing quite the same fate as our friends in Italy, where the economy is considerably more pear-shaped (27.8 per cent youth unemployment) and highly educated young people are doing all sorts of jobs to make ends meet.
In its Off to a Good Start? report, the OECD's secretary-general Angel Gurria notes that "investing in young people is vital to avoid a scarred generation at risk of long-term exclusion". Based on the most recent OECD economic projections, youth unemployment rates are expected to be around 18 per cent in 2011 and 17 per cent in 2012 after a slow decline in 2010.
"At least 16.7 million young people are neither in employment, education or training (the so-called NEET group)," notes the OECD, adding "6.7 million of these youth are still seeking work, while 10 million have given up looking... Young people leaving school in the coming years are more likely to struggle to find work than previous generations."
And to think all Gen-Y Aussies had to contend with was Boys II Men.
While cautious, the OECD has some comforting concessions for Australian youth, noting Australia entered the downturn from a favourable starting point. "Until very recently – partially as a consequence of uninterrupted economic growth for 17 years – the overall unemployment rate was close to its historical low. Moreover, the youth (15-24) unemployment rate reached 8.7% in September 2008, the lowest level recorded since the late 1970s."
The organisation has also seized on the opportunity posed by a slower jobs market for youth (and why not older Australians, too?) to embrace education and skills acquisition. "Australia is indeed characterised by a relatively low retention rate in education beyond age 16, as compared with many other OECD countries. Hence, too many youths still lack the basic skills needed to embark on a successful long-term career in the labour market."
Let's hope our Millennial underlings are able to bide their time productively and creatively as they wait for the storm to pass (yes, Mrs. Bartle).
Jobs for Youth, Australia, OECD
Jobs go as confidence evaporates, AFR
Economy shed jobs at year's end @ SMH
RBA has room to cut rates, says Gillard @ The Australian
Girl With a Satchel