Understandably, youth unemployment has been the topic du jour this week.  Many have offered insights into causes and solutions, based either on supply or demand side arguments.  

On the supply side, causes are identified as lack of appropriately skilled and experienced youth who are work ready with an acceptable work ethic.  On the demand side,  there are few jobs available in Tasmania for our youth.  From the perspective of solutions, on the supply side is to increase investment in educational attainment and on the demand side, create confidence in the economy and thus jobs.

While from a helicopter view, these explainers for the causes and solutions of high levels of youth unemployment are well supported, greater understanding of the interaction between education and its influence on employment outcomes is required.  

Critically there is a misconception about who of our youth is unemployed.  Assumptions are that it is those who have low levels of educational attainment, particularly literacy and numeracy.  While there is a proportion of our youth who do fit this description, there are many recent graduates (and not quite complete apprentices) who fill the unemployment queue, particularly in Tasmania.  This is primarily due to the mismatch between educational qualifications and employment opportunities, including whether or not educational qualifications prepare an individual for the workplace.  Many argue that tertiary education does not.  This leads to our youth being overqualified and under-experienced.  Eventually these overqualified people leave the state, adding to our population challenges.

Even tertiary educated individuals require on-the-job training to get them in a position where they make a positive, productive contribution to the business - this period of training is an investment (cost) to the employer and can take many years to achieve (around three years for most occupations).  In order for an employer to take on either an apprentice/trainee or a recent graduate they need confidence in the (long term) market to achieve a return on this investment. In Tasmania three years is a long time to invest getting an employee to productive stage.  It also means freeing up resources (skilled people, time and money) to train individuals, meaning those resourced are also not fully productive.  

So what do we do?  Take a step back and reassess - focus on three areas of responsibility: education, integration between education and employment and employers. 

1) The foundations of literacy and numeracy are critical.  Unless these levels meet national standards, employment will be difficult for individuals (at any time of their life).  Our youth needs to want to be educated.  They need to be surrounded by jobs to which they aspire to do, jobs which require completion of year 12 and further education. High school must go to year 12.  Subject choice needs to be reduced.  The foundations of education; literacy, numeracy, problem solving, critical thinking, expression and creativity are the priority.  A large subject choice narrows students abilities and choices in the future.  In an economy always changing and with occupations no longer guaranteed to exist in 10 years time, our youth need solid foundation skills and abilities. This will widen their opportunities in the future. 

2) There is complete miscommunication between industry and education providers with regard to skills and abilities required in the workplace, partially to blame is the way in which education is funded.  In any case, both industry and education providers have a responsibility to each other, to prospective students and employees about expectations and outcomes.  

Efforts to improve educational attainment are evident, however, the recently signed MoU between TasTAFE and UTAS includes increasing the level of educational attainment and the number of completions, however, it does not include securing employment by graduates in its scope.  There is little point the state investing in the education and skill development of Tasmanian-based students if they can not be retained in the state (essentially we are investing in the future prosperity of another state).  Furthermore, while UTAS has introduced a formal internship process for international students with the objective of retaining them in the state upon completion, aimed at completing the link between education and employment, the same internship process is not available for Tasmanian students.  

3) Employers also need to adapt and compromise.  This is particularly evident in the type of entry level jobs offered to our youth.  While our teaching styles have evolved over time to encourage independent thinking, using initiative and problem solving, entry level jobs have not adapted to these new skills and abilities offered by our youth (I wrote more about this here).  Accusations of youth being transient and unloyal are the direct result of lack of job security offered in employment.  While businesses mitigate against future risks by offering less than permanent employment, youth also mitigates their risks by continuing to pursue employment opportunities which will provide security (or increased experience).  

A final, important point, is that our youth are our future, and always will be.

Solutions to the challenges of population ageing forget about the opportunities provided by our youth and future generations.  As we enter a period of time in which there will be more labour market exits (due to the large cohort of baby boomers reaching retirement age) than labour market entrants, maximising the utilisation of the available supply of labour is paramount.  In Australia, the focus is on increasing the labour force participation rate of women and older ages (as well as productivity).  This solution does not consider the contribution of youth at all.
 
In fact, since the early 2000s Australia, and to a lesser extent, Tasmania, has been experiencing a mini-baby boom.  Critically, this cohort of children will enter the labour market as the last of the baby boomer reach retirement age (around 2023).  This generation is what my colleagues, Brendan Churchill and Natalie Jackson, and I call the Thank God You're Here Generation (Gen TGYH).  Gen TGYH will be the replacement labour that we are so desperately seeking.  However, they are not round pegs who will fit in round holes (left vacant by baby boomers).  Gen TGYH need to be shaped and nurtured to meet our future needs.

It is the responsibility of parents, educators and employers to ensure that Gen TGYH and subsequent generations have strong foundations on which to build knowledge, skills, flexibility and adaptability as well as build a career.   

Much emphasis is placed on the creation of full time jobs in Tasmania, but the reality is that the growth in employment since data collection began in 1978 has been in part time employment (or less than full time - 35 hours per week).

In the 15 years since 1998, part time employment in Tasmania has increased by 37.8 per cent, compared with 8.5 per cent for full time employment (overall jobs growth of 15.3 per cent).

There are a number of reasons explaining this increase in part time employment.  First, the considerable increase in female labour force participation rates (increased from 39.9 percentage points in February 1978 to 55 percentage points in December 2013).  Compared with men, a higher proportion of women are employed on a less than full time basis, particularly those who combine paid work with the role of raising a family.  Second, structural change in Tasmania's industry sector base combined with an ageing population, has resulted in growth in services sectors such as health and community care and education.  These sectors are traditionally feminised workplaces and thus have a higher prevalence of part time employment.  Third, recent efforts in job creation have focused on industry sectors which have a higher proportion of employment in less than full time work such as tourism and retail. 

Important to recognise however, is that part time employment is not necessarily a bad thing.  In fact, the availability of part time and flexible work has the potential to increase labour force participation for both men and women in all age groups. 

Job creation, whether it be full or part time work, is of critical importance for Tasmania, economically and socially.  However, as evident in the above chart, employment growth in the state has been volatile at best.  Since the GFC in 2009 which resulted in a contraction of employment of nearly 4 per cent, the only period of growth in employment occurred in 2010 and was supported by Federal Government economic stimulus packages such as the building the education revolution and nation building infrastructure.  Since then, employment in Tasmania has continued to contract. 

Importantly, future job creation is likely to continue to be dominated by less than full time employment, influenced by increasing female labour force participation, maintaining labour force attachment of older workers through policy strategies such as transitioning to retirement and the increasing trend of men working part time as they 'share the care' of raising families with their partners. 

As this trend continues, the number of jobs created will become less important, and the productivity of those employed will become more important.  Productivity can be measured in a number of ways, but when assessing from an employment to population perspective, labour underutilisation provides a significant insight into the true state of the employment market.  Labour underutilisation is the sum of those unemployed and those underemployed (that is those who have a job but are working less hours than they would like to and are able to). 

So while part time employment is desirable for many people and can facilitate increases in labour force participation, if people are not working as many hours as they would like to, they are not being utilised effectively.  As is evident in the below chart, labour underutilisation is significant in Tasmania and trending upwards with over 20 per cent of women and 17 per cent of men underutilised in the labour market.  Underemployment masks the true nature of the employment market in Tasmania.

Any analysis of job creation and employment growth in Tasmania and its contribution to the economy must also consider labour utilisation. 

The short answer, in recent times, very little.

The below chart shows the labour force participation rate for those of prime working age (15 to 64 years) and the working age population (all those aged over 15).  The difference between the two rates can be described as the ageing effect.

When the difference between the two rates increases, this can be explained by an increasing ageing population.  From around 2010, the gap between the two rates started to widen, co-inciding with the time that the first of the Baby Boomers starting reaching retirement age, indicative of an ageing effect on the working age population labour force participation rate.

However, since around 2012, both the labour force participation rates of the prime working age population and the working age population have declined considerably which can not be explained by an ageing effect.  The decline suggests that the primary reason for the most recent drop in the labour force participation rates is due to cyclical factors such as poor economic performance and people losing confidence in finding employment - therefore withdrawing from the labour force. 

Additional explainers for the ageing effect include a preference of employers to employ younger workers, particularly in tough economic times, as well as an increase in confidence of older people to retire given that superannuation performance has returned to pre-GFC levels. 

Regardless, while the gap between the two labour force participation rates has only increased marginally in recent times, it can be expected to continue, and even increase, given that there are now more people of labour market exit age than entry age in Tasmania. When a return to positive economic performance occurs, it is likely that Tasmania's labour force participation rates will remain relatively low, compared with other states and territories) giving the accelerated rate of ageing in the state. 

Much debate exists around why youth unemployment is the highest of all age groups in Australia, with employers complaining that Gen Y has no work ethic, is disloyal,  arrogant, has unrealistic expectations and want it all.  General consensus is that society and educational institutions are failing to prepare 'work-ready' future generations.

The reality is, however, that successive generations are the product of the environment they were born into and spend their formative years.  This is particularly evident as the value of education becomes increasingly important. As the importance of education increases so too does the pressure on education providers to produce a quality product, so much so that teaching and learning practices are continually evolving to meet these demands.  Students are now encouraged and nurtured to develop ways of creative and independent thinking, problem solving and critical analysis.  Even before children start formal education, playgroups and childcare centres are fostering a culture of 'play-based learning' encouraging imaginative and creative play, utilising both the left and right sides of their brain. Our youth is experiencing a contemporary learning environment which encourages challenging the status quo - questioning the who, what, where, why and how. 

However, our workplaces have not evolved in the same way.  Entry level jobs prescribe how to do a job, where and when to do it and why.  The workplace experience is a total discord to the empowering educational experience Gen Y are provided to foster innovative thinking.  Organisations have not adapted to capture the new skills and thought processes which accompany Gen Y (and future generations) into the workplace. Job roles have remained stagnant and thwart any potential productivity gains attached to the skills and abilities of younger generations (which is critical in replacing a large, ageing workforce). Critically, Gen Y are not round pegs to fit into round holes left vacant by obsolete jobs or retired baby boomers.  While jobs have evolved as a response to the demands of new technologies and related opportunities; workplaces, structures and job descriptions have not.  Maintaining the historic trend and status quo attached to job design and workplace hierarchies inhibits the potential attached to the future supply of labour and their associated educational asset.  Evolution needs to occur concurrently - education, jobs, job design, workplace structure and culture.

While the education system appears to be preparing our future generations for the changing needs of an economy transitioning from an industrial-based economy to a knowledge, service based one, our workplaces appears to be failing to keep pace with the opportunities attached to our successive generations. The focus should be on achieving both contemporary educational outcomes and contemporary, productive workplaces rather than retrofitting Gen Y to out-dated workplace practices. 

Last week I attended the cepar International Conference on Population Ageing and following a long day of presentations and networking a group of us decided upon an impromptu dinner out nearby. Hailing a cab as you do, I jumped in the front seat as I find people interesting and enjoy speaking with taxi drivers. I didn't need to initiate conversation as the driver asked me what had brought me to be at the Uniiversity of NSW. Explaining I was attending a conference he asked me what I do. Keeping it simple I replied that I am a researcher in population ageing. He then asked if I was doing a PhD. Mildly taken aback I said yes, that I am, and I am researching the utilisation of skills in the labour market in response to the challenges of population ageing and the proposed 3Ps solution. He then asked if I asked people why they wanted to work. I advised him that I am a quantitative researcher and so do not interview people. He told me that was my mistake and proceeded to tell me his story. An Eastern European immigrant in his sixties with three degrees, one of which in engineering, from the very university at which I was attending the conference. He has never been able to get a job in Australia to match one of his qualifications and so has to drive taxis to make a living. By this time we had arrived at the restaurant we had booked, and all I could do was apologise to this highly articulate, obviously educated man, and wish him all the best. I wish I had been able to ask him more (qualitative) questions about why he wanted to work and also why he thought he couldn't get work in Australia, but instead I headed off for a night of networking with other population ageing researchers.

Often we get wound up in the technicalities and policies surrounding population ageing and completely fail to consider the human element. A lesson to be learned.

Initial reactions to Tony Abbott's parental leave scheme suggest that (big) business will be opposed to the levy placed on them to pay for it.  Here is a quick snapshot of why it would be good for business, as well as the economy and society in general.

• The policy will create a level playing field for all.  There is growing evidence that women are choosing their employers based on the parental leave entitlements and this occurs a number of years prior to child-bearing intentions. 
  
• Costs may decrease or increase for some organisations and industries, but will be constant and can appropriately be budgeted for. 

• Support working mothers provide at least six months of critical infant care without the pressure to return to work
  
• Female labour force participation is likely to increase, and women will return to the workforce sooner after having children
• Protection for women from loss of income upon having children, employment security, superannuation continuity and engagement with the workforce provides greater equity for women as they age
• Women are over half the population and have greater levels of educational attainment than men, any loss of their contribution to the workforce is a cost to business
• Disincentives to employ or promote young women will be removed
• May increase incentives for some industries to improve their gender balance
  
• As population ageing increases and the supply of labour diminishes further, women will become increasingly important participants in the labour market, increasing the competition for them.
  
• Women will have greater opportunity to obtain senior positions and increase board representation (due to continuation in the workforce)
  
• The fertility rate will likely stabilise or slightly increase, providing insurance for a future supply of labour 

The empirical studies into the impact of both pronatalist policies and paid parental leave schemes in Australia suggest there is little capability of policy intervention influencing the increase of fertility rates, supporting the concept that low fertility and low female labour force participation is the result of observed market failure.  That is, it is society’s reliance on the tax transfer system which has shifted the economic benefit of having children from the private to the social domain, meaning that those who choose not to have children still have equal rights to the intergenerational transfers from other people’s future tax-paying children.  Essentially, those who have children create the future workforce and tax base, largely through their own private sacrifices.  Therefore, until greater value is placed on childbearing and rearing by society, and the opportunity cost of having children is significantly reduced, it is unlikely that fertility rates or labour force participation rates by women will increase further. 

An article published in The Conversation

https://theconversation.edu.au/tackling-the-challenge-of-tasmanias-ageing-population-11336 

Released today, the ABS Labour Force data suggests that employment continues to languish nationwide.  In Tasmania, around 5000 full time jobs were lost in the past year, partially offset by increases in part time employment so that total employment fell by around 2000 in the twelve months since December 2011.  However, over the same period total employment for males increased slightly while for females it decreased.  This is evident in the unemployment rates where the male rate remained steady at 6.9 and the female rate increased from 5.8 to 7.1, resulting in an unemployment rate of 7.0 in trend terms for the state (compared with a national rate of 5.4) and the participation rate decreased slightly to 60.3 (65.1 nationally).

In finding a solution to the employment challenge, there is little to gain from increasing investment in education and training given that it is likely that many of those actively seeking work already have qualifications, skills and experience.  In addition, many recent graduates are likely to be joining the employment queue.   

The most effective means for increasing employment opportunities will be to attract investment to the state and stimulate demand for workers.  While there will be those touting the silver lining of the recent bush fires and the stimulus involved in rebuilding vital communities, this will provide short term relief only, The state needs to continue its investment in creating a competitive business environment to leverage our natural competitive and comparative advantages.  This includes investment in infrastructure, particularly freight logistics as well as regulatory reform in terms of planning and the labour market. 

I would like to provide you with my ‘wish list’ for the future provision of education in Tasmania.  These are simple dot points which I would be happy to expand on if you require further clarification.

1.       That all schools; rural, regional or urban provide education to year 12
2.       That the provision of education services be demographically informed
3.       That the provision of education be aligned with the industry make-up within the relevant rural, regional or urban context
4.       That a first class transport service be provided to students
5.       That education services be integrated with LINCs, post-school education providers (vocational and tertiary) and other education and training providers.
6.       That other public services be integrated with the provision of education so that employment opportunities and optimal health is ensured
7.       That the provision of education services are integrated on a long term basis with the State and Regional Economic Development Plans as well as the Industry Diversification Plan resulting from the Tasmanian Forests Intergovernmental Agreement. 

Historically, Tasmania has always experienced net migration losses in the younger education and working ages of 15 to 29 years as a direct result of a lack of education and employment opportunities. This is particularly exacerbated in rural and regional areas of the state where schooling is not often provided beyond year 10 and where there are no post-school education options at all.  Yet, at the same time, much of the state’s contribution to economic growth is sourced from industries in these rural and regional areas.  This results in a serious mis-match between supply of labour and demand for labour - particularly educated, skilled and experienced labour.

I believe that the above dot points can be achieved through a strategic approach to integrate education with economic development through the provision of infrastructure, services and amenities.  Following the process of identifying potential industries and areas of economic growth, investment in ‘infrastructure hubs’ should be a priority.  These hubs should include the provision of education to year 12 as well as vocational and tertiary (utilising LINCs and the NBN), health, transport and recreational services, including services such as aged, disability and child care and cater to the needs of the sub-population.  The need for these hubs should be informed by the population demographics, the industry make-up and the prospects of the region. 

An infrastructure hub approach to the provision of public services has the potential to provide opportunities to Tasmania and Tasmanians not previously possible, including reducing the disbursement of the population, the opportunity for critical mass and economies of scale.  

Population ageing is sometimes overwhelming, often misunderstood, and, more critically, its importance to our economy and livelihood is ignored.

Demography is the study of human populations and thus population ageing. 

For all countries and regions (apart from one) economic growth is the mandate for all governments and economies. It is believed that economic growth increases standards of living. It is the term used to indicate the increase of per capita gross domestic product (GDP) and refers only to the quantity of goods and services produced.

Economics is the branch of social science that deals with the production, distribution and consumption of goods and services and their management through the analysis of the Factors of Production. The factors of production are the four resources which enable production; land, labour, capital and enterprise.

Focussing on the labour component, labour is a measure of the work done by human beings. Labour economics seeks to understand the functioning and dynamics of the market for labour. Such analysts are predominantly concerned with labour in terms of labour force participation and unemployment.

But, given that labour must be produced on a daily basis to achieve economic growth it should also be accepted that labour must be reproduced on an intergenerational basis. 

This theory results in a concept known as Total Social Production. Total social production is where neither production nor reproduction can take place in the absence of the other. Therefore economic production and demographic reproduction are mutually interdependent. 

Most economic analysts see demographic reproduction as secondary to economic activity. This ignorance has been a significant contributory factor as to why we are experiencing population ageing now. What has been missed by policy makers is the ability to ensure that production and reproduction can co-exist.

To manage the implications of population ageing into the future, the role of demography is paramount and can not be ignored any longer. It is time social policy and economic policy co-existed.