Boards must play a bigger role in helping to address the growing threat of youth unemployment in Australia, says Tony Featherstone.

    Rising youth unemployment in Australia is attracting plenty of headlines. Less considered is what boards can do about it through governance of charities, schools and universities.

    The jobless rate for those aged 15 to 24 was almost 15 per cent in July. Sadly, one in five young people in parts of North Queensland and Tasmania are unemployed, and not-for-profit organisation, The Brotherhood of St Laurence, predicts youth unemployment will hit 33 per cent in parts of Tasmania within two years.

    Australia faces a social disaster if these trends continue. Generations X and Y will be followed by Generation Jobless: more teenagers and twentysomethings who cannot find a job through no fault of their own.

    Consequently, some young people will face long-term unemployment, or have several lower-paid, casual jobs to make ends meet. Our country’s greatest resource – talented, motivated young people – will start to decay if action is not taken.

    This problem’s traditional solution, education, could become less effective, at least in its current form, for some students. Almost 30 per cent of new bachelor-degree graduates available for full-time work had not found a full-time job within four months of graduating, according to a 2013 survey by Graduate Careers Australia.

    More than half of these at least worked in a part-time or casual job. But that is little consolation after several years of full-time study and incurring a big student debt. Graduate recruitment rates will surely fall further this decade as companies downsize.

    Worrying trend

    I have written on the trend of rising youth unemployment for the past few years, principally for The Age newspaper, and highlighted challenges in the education system, namely, a risk of funnelling too many students into higher education and creating an oversupply of graduates in some fields.

    I have taught thousands of university students in the past seven years and seen too many finish without a full-time job, or rely on a menial part-time service job that does not need a degree. For good measure, they have a $30,000 student debt that will take years to pay off. Future students will have significantly higher debt if proposed university fee deregulation is passed.

    There is no clear solution to youth unemployment. Technology will replace more white-collar jobs, just as it has affected aspects of blue-collar work. Robotics, algorithms and outsourcing work to cheaper labour overseas, will also affect long-term demand. In the short term, a global economy struggling with oversupply and persistent weak demand will dampen the labour market and supress wages growth. If teenage unemployment is 15 per cent when the Australian economy is at a near-trend pace, what will happen if the economy contracts sharply as the mining investment boom fades and commodity prices fall?

    So what can boards do about youth employment? Some charities are doing an excellent job, lobbying governments to take more action, and preparing for higher demand from struggling young people for their services. Other boards will need to ask management what higher youth unemployment in coming years means for their charity.

    Directors of schools and universities also have a role to play in addressing the issue of youth unemployment. I have long argued that we need to equip young people with greater skills to create their job. Yet the education system mostly teaches young people how to apply for existing jobs.

    Boards of educational institutions need to ask school principals and vice-chancellors: does our organisation give students sufficient skill to apply for their job and/or create it? Is our current curriculum equipping students to deal with a future of sharply higher youth unemployment? Are students capable of mixing full-time work with self-employment during their career?

    I am concerned that our education system is not responding quickly enough to what could be a structural change in youth unemployment. The days of doing well at school, going to university and getting a plum full-time job that lasts for years are rapidly fading for many young people.

    In this changing labour market, young people will need to be more creative, innovative, and adaptive than ever. Increasingly, some will move between full-time employment, casual work and self-employment, and need different skills for each. There is much that boards can do. Directors of schools can ask if there is an opportunity to expose students to business creativity, innovation and entrepreneurship much earlier in life, ideally at primary school.

    University boards can ask how entrepreneurship and innovation teaching is embedded into other programs. Every faculty should teach innovation and entrepreneurship — not just business schools — so students across campus can be exposed to the concept of starting a business, creating a job for themselves and others, and adding significant value to the community.

    Yes, self-employment is only a small part of the youth unemployment puzzle. But every bit counts. The current system of loading students up with debt, over-educating some for corporate jobs that will no longer exist in the same quantity, and demoralising them, is a looming social disaster.

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