COVID will cripple Australia’s jobs market for years
We were still recovering from GFC when pandemic hit.
It takes years for job opportunities to recover after a major economic event, according to a new survey of post-graduate employment outcomes that bodes poorly for current Australian university students staring down an increasingly unpredictable post COVID-19 employment market.
The three years before the pandemic saw a surge in post-graduation employment, with 73 per cent of respondents reporting in 2017 that they were in full-time employment (FTE) four months after completing their course.
The same cohort reported a FTE rate of 90.1 per cent this year, according to the 2020 Graduate Outcomes Survey – Longitudinal (GOS-L) report by QILT (Quality Indicators for Learning and Teaching).
The survey tracks employment outcomes based on how long it takes graduates to find work in the short term (four months after graduating) and medium term (three years later).
High short-term figures suggest that graduates of a particular course are in high demand, securing jobs before or immediately after graduation.
A time analysis of GOS-L figures lays bare the effects of major economic disruption: short-term employment dropped from 83.6 per cent in 2007 to 76.2 in 2012, then plummeted to 70.9 in 2013 due to job-market restructuring in the wake of the global financial crisis (GFC).
It took most of the past decade for the market to recover, with figures suggesting that today’s workers are taking much longer to find jobs than in the past.
Where just 9 per cent of workers took more than 4 months to land full-time work in 2007’s pre-GFC market, GOS-L figures found that gap had exploded to 22.1 per cent by 2015.
That figure currently sits at 17.1 per cent – suggesting that nearly twice as many Australian students were unable to find short-term work than they were before the GFC.
Past analysis has found that “crowding out” in the post-GFC employment market dramatically reduced opportunities for young Australians, with University of Melbourne professor of economics Jeff Borland recently arguing that the COVID-19 pandemic would be a double hit for an economy that was “still reeling” from the GFC.
The GOS-L figures don’t reflect the effect of the COVID-19 pandemic, with just 5 per cent of survey responses received after 23 March – yet even in that short time, the effect of the labour market implosion was starting to be felt as employment figures dropped from 90.2 per cent before 23 March, to 88.6 per cent afterwards.
Feeding the government’s war on humanities
The report identified sizeable gaps in outcomes based on areas of study, with 92.9 per cent of computing and information systems graduates finding employment after three years.
This had increased 16.2 per cent since 2017 – well behind the surge in demand for graduates of areas like science and mathematics (25.5 per cent); humanities, culture and social sciences (25.1 per cent); agriculture and environmental studies (22.6 per cent); psychology (25.2 per cent); and architecture and built environment (13.6 per cent).
A small change suggests high overall demand for graduates with those qualifications, since more graduates land jobs shortly after graduation – hence the ongoing strong demand for graduates in areas like veterinary science (with a 6 per cent gap), medicine (0.7 per cent), and pharmacy (0.6 per cent).
The gap for students with creative arts degrees, by contrast, is 26 per cent while humanities, culture and social sciences degrees, by contrast, is 25.1 per cent – suggesting that graduates with so-called ‘soft skills’ are waiting longer to find full-time employment than those with ‘hard’ technical skills.
An early release of the report was found to be overstating the shortfall for humanities graduates in a move that critics said was meant to further the government’s ongoing efforts to promote ‘job-ready’ university degrees by cutting the cost of high-demand courses.
Those changes would boost the cost of humanities degrees, putting them closer to professional courses like law and commerce despite having less robust employment prospects.
“We are encouraging students to tailor their studies to learn the skills that will be in demand in areas of future jobs growth,” Minister for Education Dan Tehan said in launching the latest outcomes figures.
“That means breaking down the traditional degree ‘silos’ by choosing units of study across disciplines and introducing a price signal to students by making degrees cheaper in areas of expected job growth.”
The figures suggested that postgraduate degrees remain an effective way of both securing jobs and getting paid more for them.
Some 94.1 per cent of workers with postgraduate degrees had secured full-time work within six months, compared with 86.2 per cent back in 2017.
Median salaries for postgraduate coursework graduates increased from $83,300 in the short term to $98,000 in the medium term.
Research jobs were harder to come by – just 81.4 per cent had full-time jobs within six months back in 2017, compared with 90.1 per cent in 2020 – but paid better, with median salaries increasing from $89,500 to $103,000 over the same time.
The OECD has called the COVID-19 pandemic “one of the worst jobs crises since the Great Depression”, noting that it had destroyed jobs 10 times faster than the GFC and would keep unemployment high through 2021 and beyond.
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