Over the past decade, thousands of younger Australians have been forced into part-time employment, often casual or even ‘gig’ roles. The cause? A weak economy that has simply failed to create enough high-quality full-time positions to meet the needs of the Australian population. We find that around three-quarters of the rise in part-time work among younger workers, those aged 15-24, reflects economic conditions rather than a stronger preference for part-time work.
Today almost 18% of younger workers report being underemployed. That is, they have jobs but would prefer more hours. That’s up from around 11% in 2008 before the global financial crisis. The past decade has been difficult for young people — too few jobs and a lack of job security a common theme.
Greater workplace flexibility has created a more inclusive labour force, allowing thousands of women and older Australians to join the workforce. Women in particular benefit from part-time and flexible working arrangements after childbirth, when it can be difficult to juggle a full-time schedule. And many older workers have decided to transition to retirement via part-time work.
But for younger Australians, this ongoing shift towards casual or ‘gig’ work has mostly been to their detriment.
Today, the average Australian works fewer hours
Younger Australians, those aged 15-24 years, work 8.5% fewer hours on average than they did a decade ago, reflecting the sharp rise in part-time employment. Those working part-time though are working slightly longer hours compared with a decade ago. These trends are apparent for all age groups but to nowhere near the same degree as for younger workers.
Younger employees are clustered in two distinct groups. Around 56% are working fewer than 35 hours a week, a group largely composed of students combining work and study. A 35 hour work week is the conventional dividing line between full-time and part-time work. Another 35% are working 35 to 44 hours a week. By comparison, just 45% of younger Australians worked part-time a decade ago.
While the shift among younger workers may partly reflect greater interest in university education, the job-market experiences of young Australians have overall been poor. Almost 18% of younger workers consider themselves underemployed, working part-time but preferring to work longer hours, compared with 11% a decade ago.
Part-time work is involuntary for some workers
Around three-quarters of the increase in the part-time employment share among workers aged 15-24, from 45% in 2008 to 56% in 2018, can be explained by poor economic conditions, according to calculations derived from ABS data. And around half of the part-time increase among workers aged 25-34. The remainder represents an increased preference for part-time work — likely due to a combination of study and childcare.
Almost every industry and occupation is employing more part-time workers
Businesses across the country are relying more heavily on part-time workers, even those not normally associated with the practice. The part-time employment share is higher in all but two industries — finance and real estate — compared with a decade ago.
Among the largest employers of younger workers there is a clear trend. The part-time employment share has increased noticeably among workers aged 15-24. The increase was largest in arts and recreation, manufacturing, and healthcare and social assistance. The part-time employment share has increased for older workers as well, those aged 25 and over, albeit to a more modest degree.
Quality opportunities for younger workers, particularly those without a university education, are few and far between. Employment growth has been weak among the largest employers of younger Australians and the opportunities that have been created have been temporary.
On Worth Youth Skills Day, the lesson for younger workers is simple: developing a skill is incredibly important. The labour market for younger workers is difficult because many are seeking their first job and are, by definition, unskilled. Australia simply isn’t creating many high-quality unskilled roles even in sectors such as retail or hospitality. Developing a skill, whether through formal education or via an apprenticeship, is one way to circumvent the economic forces that have pushed workers into part-time and insecure work.
Over the past two years, Australia’s labour market has started to create more full-time opportunities and that may help reverse the long-term trend toward part-time and insecure work. Full-time hours and more job security in a tighter labour market would be a great boon to job seekers. To date though, this hasn’t been enough to reduce underemployment for young and old alike.
Callam Pickering is an economist at the Indeed Hiring Lab with a focus on Australia.