Image description: a young person lays sick on a couch under a blue blanket.
By Millie Muroi
Storme is one of tens of thousands of young Australians grappling with the financial fallout of COVID-19, with over a quarter of people in her sector, arts and recreation, aged 15 to 24.
“It’s stopped,” Storme, an actress, says of the entertainment industry she is usually employed in.
“The arts closed down really quickly…whole productions were shut down in a matter of days”.
Young people are relatively immune to COVID-19 fatalities but set to be among those most acutely impacted in economic terms.
Confronting wage stagnation, a widening generational wealth gap, and housing cost hikes, youth also comprise a substantial proportion of casual employment in industries most at risk.
As a snapshot, Australians aged 15 to 24 comprise 45%, 32%, and 27% of the workforce in accommodation and food services, retail trade, and arts and recreation services respectively according to the Australian Bureau of Statistics.
“I’m most concerned about my finances,” Storme says, “because university students live week-to-week.”
Residing until recently in New South Wales, Storme also worked in retail at a music shop, and as an administrator for events. She has now moved back to Perth for safety reasons and to be closer to family.
Storme recalls that shows were “cut within two days of each other,” adding that “it’s been sad to see friends who have worked so hard” suddenly have their work shelved.
When businesses in retail, recreation, and hospitality go bust, or downscale their operations, young people – because they are employed on a disproportionately large scale in these sectors – are especially affected.
Consumers are also likely to postpone spending on non-essential goods; an Executive Briefing by McKinsey & Company published in March argues that consumer companies often have “thin working-capital margins”, and therefore limited room to accommodate delays in demand.
Even consumer companies with capacity to absorb lost revenue however have, until recently, continued operating, often endangering their employees.
“They didn’t provide any protection,” comments Eve, who worked as a casual in a multinational apparel store.
“They said that you didn’t have to come to work if you didn’t feel safe, but that they’d just find cover for your shift.”
Protections offered by employment benefits, unionisation, and fixed-term contracts are also far sparser for young people, who tend to be employed on a casual basis.
While aviation, travel, and tourism face heavy headwinds, it is in sectors such as hospitality – where half of the workforce in 2018 were casuals – that employees are hardest hit.
Numbering approximately 3.3 million, casual workers are not guaranteed consistent working hours, notices of dismissal, or entitlements to paid leave.
Tom, who works in hospitality, was surprised at the influx of take-away orders at his workplace, but said that his store had “temporarily closed their doors” while they figure out how best to adapt.
Usually working a minimum of 30 hours a week, he says that he will be “lucky to have 15 hours a week” when the store reopens. For now, his shifts have been “slashed to zero.”
The government has taken action to alleviate some of the pain, with a series of packages, in conjunction with the Reserve Bank of Australia, totalling $323 billion.
Eve says that up until the announcement, the chain she works for was endangering staff by “basically saying that you were easily replaceable,” while refusing to enforce precautions in the store.
“They can afford to take the hit…but openly admitted they’d only shut when the government subsidised them,” she reveals.
The JobKeeper Program crucially entails a flat-rate $1500-per-fortnight payment that will cover all workers – including casuals who have been employed for at least the last 12 months – in businesses that have suffered substantial falls in their turnover since March 1.
The government has been widely praised for their prompt actions, but even this recent hike in fiscal support leaves certain workers behind.
The caveat for casual employees suggests that the 19.1% who have been employed for less than 12 months – a proportion that rises to 40% for seasonal sectors such as hospitality – will be excluded from eligibility for the JobKeeper Program.
When advice was issued that all events with attendance over 500 should be cancelled, it cost Storme her front-of-house job in event administration.
Meanwhile Cameron, who works at a French café, says that his hours have been cut to a quarter of what they were before, but that his main concern is for his co-workers.
“Some of them can’t get government support because they haven’t lived here long enough to qualify as a citizen or permanent resident,” he says.
Storme, Tom, and Cameron all say they are lucky in that they have their parents to support them throughout the crisis.
For those less fortunate however, existing income support such as Youth Allowance and Rent Assist already fail to cover costs of living.
According to the Guardian, government data indicates that three-quarters of recipients were encountering housing stress even before the COVID-19 outbreak.
A survey conducted by the Australian Council of Social Service of 900 young Australians receiving welfare indicated that 30% of participants skipped six or more meals a week, with over 50% resorting to couch-surfing due to food and housing costs.
Some, such as Trinity who works in a community pharmacy, are still waiting to receive support that they applied for before the proliferation of COVID-19, and are deeply concerned about their financial safety.
“It’s been seven weeks since I placed my claim for Centrelink, and it hasn’t been processed yet,” she says.
“My parents and I come from a very poor background, so my parents are unable to support me as they have to protect themselves.”
Further, the national median price per room rose 3.8% year-on-year as of January 2020, fronted by Perth where the 12-month change in price per apartment room increased by 10.5%.
These hikes have not been matched by wage growth – with the total wage price index changing by just 2.2% year-on-year as of December 2019 – undoubtedly contributing to escalating cost-of-living constraints.
Though it does not erase these concerns, the National Cabinet’s recent announcement of a moratorium on evictions will reduce rent-induced pressures for the next six months.
Finally, while savings are often a cushion in times of crisis, a widening generation gap in wealth leaves young people with a diminished sense of security amidst the crisis.
Storme knows of one friend in Sydney who had just “$2.50 left in their bank account” when the crisis unfolded.
Trinity says she has “recently moved out of home” and “has no savings”.
“I don’t have anything to financially support me,” she says.
Despite the average wealth of Australians rising in recent years, the wealth of households headed by those between the ages of 24 and 35 have plateaued since 2004.
In the medium to long-term, structural reforms such as tax changes are needed to allow young people to catch up to their predecessors; for now it is yet another obstacle for youth in a recessionary environment.
Small boons for youth include job openings in consumer staple retailers such as Coles and Woolworths, as well as fast food chains such as Dominos, with the former advertising 7000 additional jobs.
Fiscal policy from the National Cabinet has also been fairly timely, responsive, and generous.
However, Australia has one of the highest rates of casual employment amongst OECD nations, and a significant proportion of youth employed in sectors hardest hit by the spread of COVID-19.
A resounding sentiment amongst young people is that their biggest concern is “uncertainty about the future.”
While this cannot be easily cured, there are persistent gaps for young workers that still require stitches.