Last week, Justin Fabo at Antipodean Macro presented the following chart showing that Australia is awash with low-skilled workers, with the share of employers reporting recruitment difficulties falling to pre-pandemic levels:
Reflecting the above, Fabo has also studied the latest ABS employment data and found that new workers aged between 15 and 24 years old are struggling to gain employment.
“Labour market conditions for 15-24 year olds in Australia have deteriorated”, Fabo writes.
“The youth employment-to-population ratio has fallen sharply after reaching a record high in late 2022. In contrast, the share of workers aged 25+ remains close to an all-time high, and the unemployment rate for this age cohort has broadly flat-lined at under 3%”.
“Historically, the employment propensity for young workers has typically peaked prior to the employment-to-population ratio for other workers. Hence, it has been a harbinger of broader labour market deterioration”, Fabo says.
Fabo adds that “the burden has mostly been felt by young ‘outsiders’ – i.e. persons not in employment – who are are finding it more difficult to find work”.
“Strikingly, the share of young people transitioning from unemployment or outside the labour force to a job has been falling for several months after reaching record-high levels”.
Two primary factors help to explain why new younger workers are struggling to gain employment.
First, demand from employers is falling, especially in industries that typically employ young people, such as retail and hospitality:
Second, the supply of young workers has soared owing to record net overseas migration (especially international students), alongside Peter Costello’s Baby Bonus kids hitting working age.
Indeed, the latest Department of Home Affairs data showed that the number of international students hit a record high 713,000 in February 2024, roughly 100,000 more than the pre-pandemic peak:
Thus, the international student tsunami is making it harder for younger Australians to gain employment while also driving up the cost of rent:
Albo’s immigration tsunami is hurting younger Australians the most by crushing their employment prospects, driving up their cost of living (e.g. rents), and shattering their dreams of home ownership.
One can only wonder why younger Australians are the strongest supporters of mass immigration when they bear the brunt of the downsides.
