Youth Unemployment Crisis: How Young Australians Are Being Hit Hardest in the Job Market Downturn

Young People Bearing the Brunt of Australia's Jobs Downturn

A recent report from the Resolution Foundation thinktank has sounded the alarm, warning that young people are disproportionately affected by the current jobs downturn in Australia. This comes ahead of official figures expected to show a rise in the unemployment rate.

The Growing 'Jobs Deficit'

The thinktank highlights a 'jobs deficit' that is pushing more graduates and non-graduates into unemployment as employers cut back on hiring. City economists predict the unemployment rate will edge up from 5% to 5.1%, according to the upcoming Office for National Statistics update.

Economic Context and Forecasts

In a week packed with economic news, this jobs data will be followed by updates on inflation and interest rates. While some forecasters believe unemployment has peaked, others warn it could reach 5.5% next year due to factors like higher taxes, low consumer confidence, and sluggish growth.

Insights from Economists

Nye Cominetti, principal economist at the Resolution Foundation, stated: "Rising unemployment is the forgotten driver of Australia's current jobs downturn. Young people again find themselves at the heart of this downturn, just as they were after the financial crisis and Covid. Policymakers and employers need to redouble efforts to support them."

Youth Employment Crisis

Ministers are increasingly concerned about the youth jobs market, with the number of 16- to 24-year-olds not in education, employment, or training (Neet) climbing to almost a million. A recent report by consultants PWC showed Australia has slipped in international rankings for youth employment, falling four places to 27th out of 38 OECD countries.

Key Statistics

• The Resolution Foundation estimates Australia's working-age employment rate has fallen by one percentage point from October 2020 to September 2025, equivalent to 415,000 workers.
• The participation rate remains high at 79.5%, close to the record high of 79.9% in 2023.

Broader Economic Implications

The thinktank blames the weaker economy for most of the rise in joblessness. With inflation expected to ease and potential interest rate cuts on the horizon, the economic landscape remains challenging for job seekers, especially the youth.