While there is little consensus about the “future of work”, one thing is certain – young people are at the coalface. Young workers experience insufficient opportunities for work experience, a mismatch between work and education, a lack of career management skills and scant entry-level jobs, according to a report from the Foundation for Young Australians.
But this report makes a mistake that is unfortunately common in the debate on the future of work. The proposed “solutions” fixate on increasing the supply of talented young people, when the problem is a lack of demand.
There are two avenues for addressing this problem. One involves big-picture, pie-in-the-sky thinking like kickstarting entirely new industries. The other focuses on the smaller, less exciting solutions such as filling existing gaps in the labour market.
Unfortunately, politicians have largely focused on the former, which could leave many young workers out in the cold.
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The foundation’s report identifies a lack of jobs and work experience opportunities as core problems facing young people. It recommends investing in individual coping mechanisms and expanding the “entrepreneurial skills base” of young workers.
Unfortunately, this deals with only one part of the problem. If only 50 jobs are available for every 100 young workers in our economy, increasing their skill level doesn’t make all 100 young workers any more likely to get a job.
Expanding the skills base does nothing to increase the jobs available. At worst, it risks further diluting and devaluing the high skills base that Australia is already producing, without any better outcomes for young people.
Addressing the lack of demand
Politicians are often attracted to “silver bullet” options. This usually involves attracting investment in emerging industries like advanced manufacturing, robotics and space technologies.
Announcements like a partnership with Elon Musk on energy technology or launching a space agency are popular because they are potential vote winners. These initiatives make governments look ambitious, forward-facing and innovative.
And while they may be costly, there are many positive outcomes from this kind of big-picture thinking. These industries could produce spin-off technologies, for instance. If properly executed, these industries can become nation-building projects.
Unfortunately, neither our university nor vocational education systems are equipped to provide for these sectors.
The lack of a pipeline to these sectors increases the likelihood that more experienced, older Australian workers are employed or foreign skilled visas issued.
Even if we overhaul our post-secondary education systems – and we should – there is no guarantee that they will offer immediate solutions to the problems facing young workers.
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On the other hand, there is a great opportunity to redirect young job seekers towards the existing skills and occupational shortages in the labour market.
Department of Employment statistics show that Australia has shortages of sonographers, audiologists and midwives. Similarly, professionals like architects, surveyors and veterinarians, as well as a variety of mechanical, electrical and technical trades, are in very short supply.
Fee waivers, government stipends or scholarships could entice job seekers to enrol in the specialised degrees that will fill these gaps.
The Victorian government recently announced it intends to do just that. Free TAFE courses will be offered to job seekers who want to enrol in apprenticeships or short courses to address these shortages.
Unfortunately, active labour market programs like this are often overlooked.
Other options include employer wage subsidies, or increasing graduate intakes in government departments.
Subsidies effectively reduce the labour cost of employing younger, less experienced workers in existing industries. However, to ensure these subsidies address the problems facing young workers, they should contain strategic requirements. For example, they could be contingent on employers providing personal and career development for entry-level or graduate employees.
Increasing graduate intakes in the public service also has the potential to utilise a wide variety of graduate skill sets. Technical graduates in science and mathematics disciplines could increase their worrying low employment rates and provide expertise to a number of departments.
Similarly, generalist streams could be expanded to utilise the diverse skill sets provided by humanities and social science degrees.
Investing in the mundane
More radical options are also available to governments, without going down the space agency route.
Reductions in working hours in Germany, the British proposal for a jobs guarantee, and basic income trials in Finland offer alternative models to support young people in the future of work.
These all have the potential to reduce the number of hours worked by those in the labour force, creating demand for additional workers.
Finally, there is another radical yet almost banal possibility – the government could itself invest in the more mundane sectors of our economy.
The growing service economy has the potential to provide rewarding careers and innovative solutions to complex problems. We often look to attract international students to our educational institutions, but we don’t apply the same thinking to aged care or child care.
Similarly, we need to think about job quality not just quantity.
By recognising the importance of these sectors, and looking for how the economy can benefit from specialised knowledge, we could provide stronger pathways for our young people.
However, this begins with recognising the value of this work, appropriate remuneration and career development for the workforce, and investing in research and development in these sectors.
Ultimately, the future of work depends on what we want our future society to look like. If we value the long-term security and stability of our young people, then we must look beyond supply-side solutions to demand problems.