Aussie youth: Overqualified and underemployed

By Leith van Onselen

The Foundation for Young Australians (FYA) has released its 17th annual report card examining how young people are faring in the transition from school to work and how prepared they are for the future economy.

According to the FYA, it now takes a young Australian an average of 4.7 years once they finish full-time education to find full-time work – a marked increase on the one year taken to find full-time work in 1986. The FYA has also found that young people are increasingly ill-equipped with the skills required to navigate the jobs of the future:

Young people are finding it harder to move into full-time work, even after graduating from higher education… The proportion of young people (20-24) in full-time work decreased from 52% in 2008 to 42% in 2014…

This report card also shows that there is a growing gap between the skills young people have and what they will need to secure and navigate the jobs of the future.

While 75% of the jobs of the future will involve Science, Technology, Engineering and Maths (STEM), 35% of 15 year olds are not proficient in science, 42% are not proficient in maths, and 35% are not proficient in technology.

In fact, proficiency in maths, science and reading is getting worse and Australia is falling in international ratings.

The story is no better when it comes to digital literacy. Around 90% of jobs of the future will require digital literacy, yet 35% of 15 year olds are not digitally literate.

To make matters worse, the report claims that 70% of young people’s entry-level jobs are at risk of automation in the future. Further, 60% of young people are currently studying for jobs that will be radically altered by automation.

To counter these trends, the FYA is calling for a “national enterprise education strategy to ensure young people are digitally literate, financially savvy, innovative and adaptable and can navigate the increasingly complex careers of the future”:

Enterprise skills are transferrable across different jobs. They have been found to be as powerful predictor of long-term job success as technical knowledge and it is predicted they will be increasingly important in the future…

Our policy choices today will determine whether Australia’s young people are ready to take on the challenges of the future for decades to come. These are not just challenges for individual young people. They are challenges for our nation. We must act now to ensure young Australians can thrive in this new work order.

Unfortunately, FYA’s calls for a “national enterprise education strategy” are likely to fall on deaf ears. Instead of supporting employment opportunities for younger Australians, the Government has instead all-but encouraged employers to fill job vacancies with foreign workers under the illusion of “skills shortages”.

There is no better example of this than the 457 visa system, where there are around 200,000 foreign workers residing in Australia, with around 80% of these positions not subject to any labour market testing to determine whether an Australian can do the job. Many of these foreign workers are also working in roles that are neither “skilled”, in short supply nor critical to the economy, such as chefs, restaurant staff, call centres, etc. Other heavy users of 457 visa workers, like accountants, are in massive oversupply (see next chart).

ScreenHunter_9372 Sep. 10 10.34

We also know that the latest Department of Employment skills shortages report revealed that skills shortages across Australia have all but vanished, with “more than enough applicants with relevant qualifications, or appropriate skills and experience, for vacancies in almost every occupation”. It also noted that “in 2014-15, there was an average of 13.6 applicants for each skilled vacancy (15.8 for professions and 12.1 for technicians and trades), of whom an average of 2.2 were considered by employers to be suitable”.

So based on the above, the case for widespread foreign worker visas is non-existent. Virtually all of these jobs could be filled locally with a little bit of training.

By ignoring the evidence from its own employment department, as well as not requiring employers to prove that local workers are unavailable to fill positions in the vast majority of cases, the Government has make it systematically easier to import labour from offshore rather than training local workers. In turn, it is depriving our youth of employment opportunities, and is very likely exacerbating the pool of unemployed and underemployed younger Australians.

Unfortunately, with little political representation, the dire employment situation facing younger Australians is unlikely to change anytime soon.

[email protected]

Unconventional Economist


    • One can only hope the razor sharp blade of ‘political representation’ comes down on the exposed necks of baby boomers.

    • ErmingtonPlumbingMEMBER

      Heard Pauline Hanson interview on Sydney’s 2GB this morning in the car.
      She was batting on about Prisoners not having a arduous enough time in Australian jails and how foreigners from countries with really harsh jail conditions should be sent to do their time there, when prosecuted here, as our prison conditions here are better than living in Asia !
      Ha Ha she’s a Card alright,….. well something that starts with a C anyway.

    • Lol. Not really mate. By that time Straya will be a vastly different place, with new citizens making up more of the voting constit.

    • This is a good a place as any in MB to post this so here goes…

      From a comment in Zero Hedge.

      “The western middle class that arose during the 20th century was the ANOMALY, not the norm.
      Cheap energy, booming innovations, the ability of large portions of the population to make their own decisions (and the financial resources to carry them out).
      Yeah, the elites damned near lost control of things.
      A mistake they will never make again. EVER.
      Small number of rich, large number of poor and just enough middle class to service the rich.
      As it has been in most societies throughout most of human history.
      The 21st centruy will be one giant reversion to that norm.”

      This is where we are really heading folks.

  1. Give ’em a belting! That’ll fix it.

    Undisciplined, lazy illiterate buggers expect a starting wage of $1 million and want Malcolm Turnbull’s Point Piper Mansion as their first home.

  2. There is no better example of this than the 457 visa system, where there are around 200,000 foreign workers residing in Australia

    There aren’t – there are just over 100k foreign workers with 457 visas.

    From the most recent border, 457 Visa quarterly report:
    “The number of primary visa holders [note: it’s the primary visa holders who are here to work] in Australia on 31 March 2015 was 106,750, 4.5 per cent lower compared with the same period in the previous programme year.”

    It’s deceptive to add in the secondary visa holders (“generally dependent on a primary visa holder” according to into your figure.

      • It’s the visa the dependent partner and children of a primary 457 get. I assume the children under the age of 18 are not working, many of the children over 18 are not working (you need to prove you rely on the primary 457 for financial support to be eligible) and a large proportion of dependent partners are also not working.

        It’s deceptive if that is not made totally clear.

    • ‘It’s deceptive to add in the secondary visa holders’, why does MB continually present data sub-optimally in a rush to antipathy, when it comes to ‘foreigners’?

      The same ‘demographic’ technique is used to inflate ‘population’ and ‘immigration’ through the inclusion of temps, who are described as ‘immigrants’ strongly suggesting they are permanent, which they are not.

      Further, with the topic at hand, how about a bit more comparison over time vs now, other countries vs just Oz and demographics i.e. baby boomer bubble acting for better or worse as barrier to younger generations, or other variables?

      Article suggests weaknesses in science, technology and maths, one could add lack of critical thinking and analysis? Of course one is not insinuating that corners are cut to make a negative point e.g. excuse to include 457 and dependents, presented as all working….. to inflate headline number and create a headline. Why, it’s something one expects in the Herald Sun or on current affairs tv?

      • A temporary resident who is just going to be replaced by another temporary resident ad infinitum has the same impact in terms of congestion, demand for infrastructure, competition for housing, pressure on the environment, etc. as a permanent resident. You are implying that temporary residents are counted when they come in, but not when they leave. Not so. I would be interested in the proportion of secondary visa holders who are working.

    • No it’s not – the 457 figure is deliberately muffled down due political sensitivity.
      Many if not most 457 come in pairs and both parties (the spouse partner dependent) work.
      There is a racket in both student and 457 share one gets the primary Visa and the other then is allowed on to work FULL time – no limits to ‘support’ the other. Of course both are working full time often in vice or the blackmarket.
      Pre-arranged fake marriages prior to entry to get 2 people – often no real relationship – into Australia as a ‘couple’ are common with Thai, Chinese & middle eastern and Indian.
      The 205,000 456/457 figure is probably an underestimate.
      Figures again (DIAC)
      1.5 million foreign guestworkers in Australia.
      780,000 in sydney alone. 1 in 6 and nearly have the renter market..
      Root cause of job loss, lowered wages & conditions, Australian youth & mature age rocketing unemployment, congestion, ethnic slums and the capital cities property bubble.
      530,000 ‘students’ – mostly fake, almost all unskilled recruited from the slums and rural poor of Asia, India or gutters with a 4% success rate in achieving a professional role in the vocation choosing –
      That’s right 95% fail to achieve anything either here or back in their home country showing what a farce the whole ‘international student’ racket is here.
      Most stay at English learning or low level non job levels for over 4 years churning thru waste of time ticket clipping ‘colleges & institutes doing 20 hour weeks so they can all work full time in vice or the blackmarket.

      620,000 working holiday visas dominated by right of entry (NZ etc ) as back door for Asians & eurotrash all on same scam. Is also the preferred vehicle for PRC vice and Indian blackmarket labor churning between student and tourist visas to extend stay.

      180,000 (or more) overstayers and illegals.

      That’s 1.5 million.

      They bring in maybe $10B at best in fee or servicess income.
      They send out $36B in what’s officially recorded (APRA Austrack) but another $20B transferred onshore here to other parties that then Isnt traced back to them as income source. Paying back agent and racketeer debts on the ‘loans’ they got to fraud their funds for entry into Australia.
      We have 18 x the OECD average of ‘students’ to population ratio. (USA UK etc).

      Most countries do not allow uncontrolled free for all guestworkers without some control of what they are doing or remittance surveillance.

      But Australia does – why they are here.

      Some examples:

      Australia is highest source of income for NRI Indians individuls in remittances back.

      Isan province in Thailand has had a 10 year economic book due to remittance income sent back by their woman recruited into Australia for prostitution in Australia – $7.3 billion and its second largest income after the rice crop goes back from these ‘students’ in Australia.

      How much more evidence is needed ??

  3. Thanassis Veggos

    It’s ok they can work at the gas station and the bank will immediately loan them enough to start their IP portfolio. Cant go wrong mate.

  4. 4.7 years?

    That cannot be right. What proportion of school leavers go to uni these days? I’d imagine a fair chunk, and I’d bet every single uni graduate has found a full time job within 4.7 years of graduation.

    Something is amiss here.

  5. Part of the cause is the granting of maternity leave in areas like teaching ( I don’t have any knowledge of how this applies in other professions). Before maternity leave many women would go on leave and new permanaent employees would replace them. When they wanted to return to the profession they would compete with new entrants and other returning teachers. Many women (and maybe a few men) took years off while their children were young. Some with say 3 children spaced say 2 years apart would take as much as 10 or 11 years off before returning when their youngest child started school. Now their place is held open, more child care enables them to return earlier and they do not compete with the new entrants as they are guaranteed first entry. This means that perhaps 10% of the teaching profession, almost all new entrants, are not able to be offered permanent places and so are potentially disadvantaged in gaining home loans and have no security. Maybe that means that some less able new entrant teachers never gain permanent status as they might be generally perceived as marginal so never get offered permanent roles. This is not to argue that we shouldn’t have maternity leave, just to point out that some of the previous “costs” of having children have been transferred to new entrants by maternity leave.

      • No. I’m not saying there are too many, just that maternity leave has some impacts that effectively have transferred some of the costs from those who previously didn’t have guaranteed jobs to return to from them to the new entrants. The same number of people are still needed in the classroom each day but there might be some variance in the number who are on maternity leave but probably not much variance. It’s more about unintended consequences or about transferring costs. Much “cost saving” by corporations and government just shifts cost from one person to another or changes the type of cost. EG my taxes/goods are lower cost but I wait on the phone for half an hour in a queue to get service: the cost has been transformed and teh dollar cost shifted from the service provider to the consumer and is paid as wasted hours rather than dollars.

      • Explorer this could be said about any industry and you raise an interesting point. Because women these days are spending more time in the work force. Unless we create enough new jobs to absorb the UE rate will rise for new entrants.

  6. TailorTrashMEMBER

    Serious question ….what constitutes digital literacy ?………I guess it’s more than driving an iPhone …….

  7. Yeah this is true, it’s just increased casual and part-time/contract work, it’s a trend. The reason? Labour is too expensive and it’s too risky for employers… and the reason for this? Straya in bull market for 20 something years, driving up house prices which then drove wages to keep up. It took me years to get a permanent job, I’m a web developer so it’s easy for me to get work and I’m in high demand, so I can move around. But the amount of useless digital dinosaurs I come across in the work-place is staggering… the amount of explaining to boomers required is like talking to children, yet they’re sitting in all these cushy permanent jobs with million dollar properties – straya!

    They’ll always find a way to blame the young, I can’t wait until I’m old and can blame the young, even though they’re more educated and have more skills, they’ll have to listen cause I worked hard n stuff! – not because of a once in a lifetime terms of trade…. another 20 years of bull market I can’t wait.

    • Labour isn’t expensive, employers are greedy.

      The large shift in wage share makes it clear that employers have been making out like bandits for 10-20 years, regardless of how high you might think salaries are.

      • I probably phrased this wrong, I don’t have a problem with our wages, it’s just the reason I think businesses are doing it. They don’t want to pay rec/sick leave so they make jobs casual, they can’t afford the risk so they put short-term contractors on projects, basically they need to make it easier to get rid of people so they have financial fall back. Apart of it would be greed too!

  8. Interesting report…can’t argue with too many of the conclusions…I just wish it was written/championed by someone that has even the faintest vision of our collective future. For me it reads a little like one of those notes from the future where the “educated” 20 something me realizes that everything I studied post primary school was complete BS and sends a note back in time to the Twelvie me, here’s what you should study, here’s what you should do. Science, Math, Technology, Entrepreneurship …..Of course the note gets discarded with an indignant like-wtf-do-u-no-bro laugh….and so it is, was and will always be.

    The trick to increased high school STEM participation is to engage these Twelvies in their own STEM education, create projects that challenge them and provide the mentors and the environment where they can flourish, just let the experience be the reward, With this small change all your other metrics will fall naturally into place.

    • Failed Baby Boomer

      China Bob,
      I agree with your comment “The trick to increased high school STEM participation is to engage these Twelvies in their own STEM education, create projects that challenge them and provide the mentors and the environment where they can flourish, just let the experience be the reward, With this small change all your other metrics will fall naturally into place.”
      I come from an engineering background and have an interest in STEM. I have tried a few initiatives but I find the inertia, ignorance and hands-off bureaucracy of educators a complete turn-off. I would rather follow other interests.

      • Yea from my own very limited experience there doesn’t seem to be any established programs within Australian secondary schools where technology skilled parents can mentor tomorrows Engineers and Scientists. I remember many years ago back in Dallas Texas I would spend one or two afternoons per month mentoring on technology projects at the local high schools. It was an interesting program because in many ways they lets the kids explore their limits and than call in the “experts” to get the projects back on track, in effect find fixes for the problems that the kids couldn’t understand. Their projects, their objectives our skills (not to direct the projects but rather to rescue them) that’s what real mentoring is about. Sure there were some complete fiascoes and plenty of perpetual motion projects …that just didn’t seem to work, but surely that’s what real learning is ultimately about ….explore your limits.

  9. By the way when I got my 457 ten years ago, I had to present a written offer from an Australian employer (which was hard, it meant I had to come to australia just to sit interviews, and then fly back to apply at the embassy and wait for months). In the end I got the job in a middle tier accounting firm in Melbourne, and when I started work they told me they had been trying to fill that position for 3 years. Locals simply had better offers to take, but it was a great opportunity for me, so I thought it was a good deal for everyone. From talking to people now nothing has changed with regards to 457, it’s still bloody hard.

    Re the youth/jobs situation, it’s like everything else: nobody seems to have a long term plan for this country. They’re just playing it by ear, endlessly finetuning interest and tax rates just to survive another day, while letting productive industries and long term investment simply dwindle. It really feels like the prevailing attitude is a short term / early settler mentality: lets go to that place and grab what it’s of value, and when it’s out we can always go back where we came from. Grab and run. When thinking long term, kids future etc, I have no other option but to shield myself from that mentality. When my kids were born first thing I did was make sure they get their european passports, and then I started looking for schools with international baccalaureate. Over the years I grew to love Australia, but I have no idea where it will be 20 years from now, and I am not convinced that enough people care or it even crosses their mind.

    • ErmingtonPlumbingMEMBER

      “nobody seems to have a long term plan for this country. They’re just playing it by ear, endlessly finetuning interest and tax rates just to survive another day, while letting productive industries and long term investment simply dwindle. It really feels like the prevailing attitude is a short term”

      That’s Neoliberalism and Corporatism for ya, and it’s infected the whole world, not just us.

      • Ditto Thanassi. I got my European passport many years ago.

        As a fluent trilingual and dual national, I’ve nearly paid off my HELP debt. I saw this yesterday actually:

        “Australians who move overseas will be required to repay their higher education debts from 2017 onwards, following the Senate’s passing of new legislation closing the loophole. For the past 16 years, Australians living overseas have not been required to repay their HELP or HECS debts.”

        I’m sure large multinationals are quaking in their boots seeing the ATO adjusting their sights…

      • According to Education Minister Simon Birmingham, if Australians with higher education debts move overseas for six months or more, they’ll have to notify the ATO themselves – through the My Gov website.

        But if Australians have to flag their working status with the ATO, what’s stopping them from just …not?

        The Department of Education and Training told Hack the first priority is to encourage voluntary compliance.
        But for those who decide to ignore the whole situation, be warned: the Australian Tax Office can apply penalties for non-compliance – similar to late payment penalties.
        Worst case scenario (“in very extreme cases”) the ATO can apply for a departure prohibition order that “would be enforced by the Australian Federal Police at departure points”.
        What is a departure prohibition order? It’s a way for the government to stop you leaving the country if you have outstanding debts – like failing to pay child support, for example.


    • Hi Thanassis

      Have your kids started school?

      If so what do you think of international baccalaureate now?

      • Thanassis Veggos

        Hi Invert, not yet, the oldest one starts year one in Feb
        All I did so far is pay through the nose to be in the zone of a Govt IB school 🙁

      • Haha. I am looking now. Most don’t seem to be zoned – but I guess you want to close to the school and not drive 30 minutes to get there.

  10. Part of this is the dumbing-down of Australian Universities to accommodate Asian students who can’t speak English and plagiarise/ghost-write any written work. Presentations are incredibly rare and students are not asked to defend their work – they simply type out some words and receive a grade with limited feedback.

    Contrast this to Europe, where students must present their findings and objectively critique other’s work in front of the class, in addition to providing the written assignment.

    • Geez

      I would have failed in Europe, I hated speaking in tutorials.

      The funniest time was when the tutor asked for my answer…. and with a blank piece of paper I began to prattle on about the issue with nods of approval from a young twenty something (tutor) lawyer.


      • Ditto! Tutorials in my time were always a small group of attendees that wanted to nut out a problem, or explore a previous lecture more fully. I was asked to talk at, what I assumed to be my idea of, one these tutorial at the local Uni, and should have been alerted by being strapped up with a mic. When the polite applause had died down I was ushered onto the stage in front of what seem like 10,000 faces….Even with words on my trembling papers, it didn’t go well enough for me to accept another invitation to a tutorial…..Oh, and the topic was… “What is money?”

  11. I am not sure about turning education into a purely vocational apprenticeship for the young. I think the problem is primarily about a scarcity of jobs and the tide is unlikely to turn. 457s, boomers hanging on to exceed their 2nd or 3rd million. The same old dilemma about competition and sharing.

  12. Long time readers know that I am an advocate of lifelong learning. I believe that there is only one truly important thing that one should learn from a school; how to educate oneself.

    I thought “Rich Dad Poor Dad” was too elementary, but maybe not. The youth should read it along with other ‘forever books’ like Moneyball and Warren Buffett’s annual letters.

  13. There’s no such thing as over-qualified. What we have is an economy with no real tech jobs because the housing beast ate them all…

  14. Terror Australis

    Not saying the general conclusions are wrong. But i think it’s worth noting that STEM are all “left-brain” fortes.
    Thousands of years of human tradition suggests to me that there will always be opportunies for people to make a living through art, design and entertainment.

  15. A couple of questions/points.

    Does the artificially low interest rate cause an overinvestment in automation. Ie tasks are automated faster than they otherwise would be. I see plenty of automation projects where it is dubious whether the capital price paid for equipment is worth it over the cost of hired labour.

    Employers who upskill their employees need some economic reward over those who go straight for 457s or pull experience from the labour pool without providing training opportunity themselves.

    • That is a good point. The artificially low rates will cause all sorts of mal-investments, so I wouldn’t be surprised if over-investment in automation is one of them.

      Another factor to put into my feedback loop model……

  16. Seems the reality that we have 1.5 million foreign guestworkers in Australia exploiting student, tourist and 456/457 visas is hard for some to accept.
    That 780,000 of these are in sydney and they are the root cause of the ‘housing bubble’ is also hard for some to accept.
    Well here is some media reporting on just what is going on in sydney housing and why a 2 bed unit hovel in the CBD is worth $800k.
    It’s been reported on a bit – but the main stream media is not connecting the linkage of uncontrolled and illegal visa rorting leading of 1.5 million foreign guestworkers in Australia.


    1 in 6 people in sydney is a foreign guestworker on some fraudulent visa arrangement.

    They are living in unit & houses made into hostel and within the massive ethnic slums erupting across sydney.

    This group is 40% if not half the rental base and the sole driving force underpinning the rental income and thus property bubble in Sydney !!

    58 beds in one 3 bed apartment at $150 each
    Check out the photos of the bunks in the bathroom and the filth and squalor of these people in what we are allowing in. All the renters in this unit were ‘students’ or ‘tourist visas’ working in prostitution or the blackmarket. No prizes for guessing the nationally of the landlord.

    that’s $8,700 a week.
    $8,000 not declared.

    $475,000 income pa makes that a $15 million valuation at 3% yield according to claws maths
    This is what “capital city” residential valuations and the new urban development is all about.

    There are 110,000 more people living in the sydney CBD than sydney city council don’t even know about.

    They think it’s 5km square zone in CBD. Well it’s one in six people in sydney and goes from the city centre to the horizon. The actual unit they talk about is in pyrmont showing they have NFI what’s obvious to anyone on the street all across sydney now including out to Strathfield, pagewood, mascot in the slums being formed.

    These 1.5 million guestworkers do not bring money into Australia.

    They almost all come in with a loan from the racketeer to the family or whatever trouble they got into in their home country.. plus the guest worker is lent the funds to fraud their way in as a student or tourist.

    The average debt before they sneak the customs on their fraudulent papers is about $aud 25k to 35k.

    They have to pay that back plus money to others – so they are all working in breach of Visa conditions often 2, 3 or more jobs or ones pre-arranged in the vice or blackmarket.

    These 1.5 million guestworkers steal over 1.5 million Australian jobs and lower wages & conditions.

    They have destroy Australian youth and mature age employment.

    They send back over $36 billion largely untaxed offshore – nearly 3% of our GDP stolen out.

    They clog up and misdirect and overprice our education system.

    They clog up our cities and infrastructure into third world non English speaking filthy ethnic enclaves and slums.

    They don’t achieve anything in the so called education..

    That’s a farce and only 4.6% actually ever get a professional role in the vocation of their choice – over 95% FAIL. Nothing they do here in education couldn’t be done in their home country or isn’t already available for free online..

    Remove and enforce they can’t work and no one would come – not one, so they aren’t here to get educated.

    And they are not tourists working a bit and spending money on holidays : they are druggie drunk useless eurotrash hanging around the cities stealing black market jobs (here coz unemployable in Italy or Spain)

    or are aged Chinese hookers brought in to work in brothels as a well established phase of the end life cycle of aged Chinese prostitute’s retirement plan.

    They are not here as genuine students or tourists and bring nothing of value or to contribute.

    They are literally recruited from the slums of Asia, India and other places to transfer that slum into Australia.

    They are only here to steal jobs or work in vice. Only here earn money, send it out, pay back their offshore money lender. Only here to try and get a PR and steal Medicare & social welfare. Only here to being in more like them, widen the problem.

    Time to review what’s been let in.

    Time to expose and shut down all these rackets and clean up Australia.

    Time to deport at least half a million or more illegals fraudulent foreign guestworkers who have sneaked in on all these rackets.