Young Aussies are currently facing the worst time to enter job market in living memory, and it may end up costing them $35,000 over the next decade.
The figure was calculated by The Greens using modelling by University of Melbourne Economics Professor Jeff Borland, BuzzFeed News reported.
The theory is that the coronavirus pandemic has scarred the job market, meaning even when it’s passed, the impact will be felt for a long time. In terms of cash, this translates to a 6% reduction in yearly income for young people entering full-time work.
Considering the average yearly wage for a 24-year-old is $57,403, The Greens used Borland’s research to estimate losses of $35,000 over 10 years.
“Scarring happens partly because workers who enter the labour market in a downturn find it harder to get employment and partly because they earn lower wages once employed,” Borland wrote in his latest monthly analysis of the Australian job market.
“Lower wages happen because workers getting their first job in a downturn need to accept lower‐paid jobs; which then takes time to undo.”
People in jobs which require minimal education are most vulnerable to this situation, he added. As fewer and fewer good jobs are going at the moment, people will be forced to settle for worse-paid positions.
Borland also noted the issue of having a gap in your resume from the pandemic, during which your skills may well go down the toilet. This makes it harder to find work down the line.
Prime Minister Scott Morrison said on Wednesday that the coronavirus pandemic had already dealt a “heavy blow” to the economy.
It’s decisions like these which could have a significant impact on employment and wages over the next decade.