For tens of thousands of young Australians, today marks the start of the rest of their lives: orientation week and the beginning of their university careers. Most of this year’s freshers will emerge from university in the early 2020s, better-qualified in a world where uncertainty is the only certainty.
Unless they are especially fortunate they will be saddled with debt and are likely to have a vanishingly small chance of buying a home in an urban centre. And the current political climate, in Australia and abroad, suggests things that not so long ago were tracking in the right direction – action on civil rights and climate change, for instance – appear to be in reverse. The key to their next few years in university, says Richard Miles, pro vice-chancellor at the University of Sydney, will be getting students to be agile enough to adapt to change, to cope with complexity, to “listen and learn and keep moving”.
Miles, a professor of Roman history and archaeology, has listed research interests including the decline and failure of complex societies – but he’s optimistic about the future, and says his students by and large are, too. Somewhat apologetic for the cliche, he says they face opportunities and challenges, and have to be ready for them.
It may sound like universities are getting into the business of personal development, he observes. “And in some respects we are. Can you really separate education from personal development when you get somebody coming through your gates at 17, 18, and leaving at 21 or 22? Those are really transformative years, right?”
The key will be soft skills, he says, as much as he hates the term. “It makes it sound like there are some big, hard skills you need to have, then there’s all this flim-flammery around them ... They sound like quite essential skills to me.”
Critical thinking and problem-solving, communication and presentation skills, the ability to summarise, emotional intelligence – these are attributes that will benefit the younger generation.
So what are their chances?
The job market
Young people today are more educated than ever before. The retention rate to year 12 has steadily increased over the past two decades, and there has been a flow-on effect for higher education. In May last year, 59% of nearly 300,000 school leavers aged 15 to 24 were studying towards a post-school qualification.
The good news is that investment in education looks likely to pay off. Though it takes young people on average 4.7 years after leaving full-time education to enter full-time work (it was about one year in 1986), the unemployment rate for graduates remains low. Over their working lives, people who study at university will earn significantly more than people who finish their education at year 12.
But they’ll bear the financial burden for some time. According to 2016 figures from the Foundation for Young Australians (FYA), a three-year bachelor’s degree costs $26,298 – adjusted for inflation, two-and-a-half times what it did in 1991. And there is evidence to show that the time and money spent on education may not be adequately preparing them for work. Though 75% of future jobs are forecast to involve science, technology, engineering and maths, proficiency in those subjects is falling.
Bronwyn Lee, deputy chief executive of FYA, says formal training is “definitely important”, but points to research that shows one in three young people to be unemployed or underemployed. “And this is a big challenge for Australia.”
Lee shares Miles’s belief in the importance of critical thinking and problem-solving, communication and presentation skills, the ability to summarise, and emotional intelligence. The FYA’s analysis of 4.2m online job postings from 2012 to 2015 found wages were higher for jobseekers who were creative, digitally literate and able to solve problems and give presentations.
“Evidence shows that employers are increasingly demanding these skills in early career jobs, and we believe they will be important for young people who are navigating a changing world of work,” she says.
Implicit in the premium placed on these kinds of skills is the fact they can’t be programmed. A June 2015 report by the Committee for Economic Development of Australia found there was a “high probability” that more than 40% of the country’s workforce – more than 5 million people – could be replaced by robots within the next 10 to 20 years.
The FYA, meanwhile, found that more than half of university students were being trained for jobs that would be radically affected by automation in the next 15 years.
The “robot economy” was a significant stressor for today’s millennials identified in a recent Deloitte report that also showed, perhaps relatedly, that Gen Y (roughly covering the generation in their early 20s to mid-30s) were starting to move away from the “gig economy” hailed as a hallmark of their generation, and back towards the relative security of full-time work.
Miles says the interpersonal and transferable skills necessary to weather these sorts of changes have always been part of a university education, but they are increasingly being put front and centre. “Of course people are studying maths, biology, medicine, law, but these are core skills that we all need.
“The last thing I’d say is resilience is so, so key – that sense in which if something doesn’t go your way, you can dust yourself down, put it in context and move on.”
The ability to recover and adapt is central to coping with job insecurity: a greater threat than automation, and one that seems to becoming entrenched, particularly for young people.
The FYA puts the number of young people employed part-time at nearly three times what it was 30 years ago. Australian Bureau of Statistics figures, too, show that 15- to 24-year-olds in part-time work eclipsed those in full-time as a share of the labour force in 2015, and that upward trend continues.
Lee says the FYA believe the number of people earning their income through multiple roles would grow – but that that this “doesn’t necessarily reflect a preference for this way of working”.
“Even if they want full-time positions, in a perpetually disrupted work space, this may become increasingly difficult,” she says. Many would be forced to take on casual and part-time jobs that they were overqualified for to make ends meet.
Johanna Wyn, the director of the University of Melbourne’s youth research centre, says those stresses are already evident among students. By international standards the percentage of Australia’s students who combine study with work is high. In the 2011 census, 62.4% of tertiary students were in work, with nearly twice as many working part-time as working full-time.
“This is a very pressurised time – many students are very financially stressed. A lot of the youth allowance and welfare payments that are available cut off at a level that leave a lot of people in hardship ...
“The tough nature of the labour market means that if you want to keep your job you might have to skip lectures. It’s a terrible thing to say, but what are you going to do?”
Though Australia was far less affected by the global financial crisis than most other Organisation for Economic Cooperation and Development countries, the labour market situation for young people has improved little since. The unemployment rate for Australian 15- to 29-year-olds was just above 10%: lower than the OECD average but higher than it was in 2007, and about the same as it was in 1985.
A significant number of young people, particularly those who have not completed year 12, are not in education or work: about 580,000 15- to 29-year-olds (11.8%) in 2015, below the OECD average of 14.7% but considerably higher than the best-performing countries.
Overrepresented among these so-called “Neets” – not in employment, education or training” – are young Indigenous Australians, and particularly those in remote areas where the labour market is weak and it is harder to gain skills and experience.
Participation of young Aboriginal and Torres Strait Islander people aged 15-19 in education has been decreasing since 2008; they now make up 3% of the total youth population, but 10% of all Neets.
Young women are 50% more likely to be Neet than young men, and nearly half of them have young children. OECD findings suggest many would rather be working but can’t because of either a lack of affordable childcare or insufficiently flexible work arrangements.
This is an issue for university graduates, too, says Wyn: investment in education and any return is very gendered, with women put under pressure to drop out of the workforce once they are of child-bearing age.
“It doesn’t seem so obvious when you’re in university but once you get through the other side ... It comes as quite a shock,” she says. By the time graduates are in their late 20s or early 30s, there is a “dramatic” difference in men and women’s positions, including in terms of pay.
“The women just don’t catch up. Australian workplaces haven’t yet become family-friendly enough to give everyone a fair go.”
Despite all that’s changed for women in recent decades, the gender pay gap – which stands at 17.3% – has remained fairly consistent over the past 30 years. But income growth has been minimal across the board, and inequality is increasing in Australia as it is elsewhere in the developed world.
Health and home
A rapidly approaching challenge for Generation Y, Generation Z and beyond is the ageing population. By 2054-55, when the oldest of Gen Z are about 55, the Treasury projects that 4.9% of the population (nearly 2 million people), will be 85 or over – and there will be 2.7 people aged between 15-64 for every person aged 65 or over, down from 4.5 in 2015.
Though many people will work past 65 due to improvements in quality of life and healthcare (the same goes for Gen Y and Z), workforce participation is expected to decline and the younger generations will have to bear the associated costs. Taxes may be higher to fund public services and pensions; the FYA says today’s young people could be the first generation to contribute more to government spending than they receive.
There will also still be the incentive for politicians to cater to older generations at the expense of the younger, for example on housing affordability. The question of where today’s university students will live in future is dependent on whether the property bubble bursts. However, the prices keep climbing.
A house in Sydney cost 10 times the average annual income in 2015, up from four times the average in 1985; it takes 15 years to save for the average deposit.
Those graduates who do manage to buy – likely with help from their parents – are burdened by debt, leaving them more vulnerable to changes in their income or “adverse life events” such as illness or divorce. In 1988, the average home loan was 32% of the average disposable household income. In 2015 it was 134%.
“Given these conditions, the likelihood is most young people will be forced to either move further beyond urban centres, or alternatively continue to rent,” says Lee.
But, with 89% of Australia’s population living in its cities, that poses its own set of problems. On medium projections, by 2031 these urban centres will be home to 6.4 million more people (principally from migration, due to a downward trending fertility rate), putting pressure on housing supply and infrastructure.
Average rental costs have increased by 44% in the past decade and with a shortage in supply that trend will only continue upwards, increasing the barriers to young people’s independence and security.
The property market itself has been identified as a “source of impoverishment”, with costs so high that people are unable to save for their retirement – women are particularly at risk. Academics have urged the government to act to ease the pressure, but it has thus far shown no inclination of doing so.
With the housing crisis one of the preeminent culture clashes of their generation, more millennials in power could resolve it – or maybe not.
Future-proofing
To quote FYA research, there has been “widespread withdrawal of trust and engagement in domestic governments, and not just from young people”. In the 2013 federal election only 75% of adult Australians cast a valid vote and that proportion is shrinking.
Lee says young people are becoming “increasingly detached” from institutionalised political processes such as parties or trade unions – but they are far from politically disinterested. Young Australians are instead “actively creating and contributing to new ways to shape society” by transforming businesses and community organisations through social enterprise and technology.
Miles describes his students as “quite robust” and accepting – even optimistic – about the changing world they live in. Far from self-involved and apathetic, as Generation Y is often depicted, they are also doers.
“What I like about some of our students now is that they actually want to tackle these issues. You don’t get a sense that they’re little ants, waiting for things to happen to them ... Young people now, they’re quite solution-based. You get people saying, ‘What can we do about this?’”
But there may be a point to common criticism of millennials’ need for instant gratification, he concedes.
“Not all problems are solved immediately ... and again, that’s what we’re trying to bring into the educational DNA. With some things you need to chip away at them; you have to show some grit. You won’t get a silver bullet but if all of us do something, you will get there. It’s not defeatism.”
That persistent, little-by-little approach will be key to dealing with climate change: the issue that will have overarching influence over all future generations, the impacts of which are already being felt.
CSIRO and the Bureau of Meteorology’s projections express “very high confidence” that hot days will become more frequent, and hotter. For the near future (2030), the mean warming for Australia’s east coast is about 0.4C to 1.3C above the climate of 1986–2005; for late in the century (2090), projections for some scenarios show warming of up to 4.7C.
The change will not just mean more extremely hot days. Sea levels will rise, oceans will become more acidic, and snow will be less deep. There will be, on average, less rainfall, leading to an increase in droughts – though extreme rainfall events are likely to become more intense – and more days with weather “conducive to fire” in southern and eastern Australia.
Yet Miles remains optimistic despite the challenges. “You have to remember the people in the 1960s were imagining a dystopian world where robots would be running everything, and they thought that was going to happen by about 1978 … Some problems seem to inhabit a huge vista – the idea of robots running the world, or retreating underneath a huge tidal wave seems like a wicked, intractable, huge problem. But some of the challenges are actually here now.
“If we spend a lot of time thinking too far ahead, we can miss things that are right under our noses.”
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