Why Australia is facing a youth unemployment crisis

A recent report by AKG reveals systemic barriers that prevent young people aged 15–24 enrolled in government employment programs from securing work, particularly long-term, non-casual employment.

The AKG 2026 First Job to Future Career Report shows that aspiration and perception gaps between employers and young jobseekers are trapping youth in these cycles of casual employment and joblessness.

The study indicated that youth are 1.3 times more likely to be unemployed and 1.5 times more likely to be underemployed than the general adult population.

Capturing data from both employers and young people enrolled in government employment programs, the report showed a “chicken and egg” scenario in which youth barriers are being misdiagnosed by employers as behavioural issues.

The report uncovered key takeaways in both barriers to employment for young people and employers’ top three perceived challenges when employing young people.

In terms of employment barriers for young people, 35 per cent of people struggled with transport issues, and 32 per cent indicated mental health and low self-confidence as common hindrances.

Meanwhile, regarding employers’ top three challenges when employing young people, 62 per cent highlighted a lack of commitment, 59 per cent indicated differing expectations, while 58 per cent noted a lack of experience to be quite a difficulty.

In terms of what employers look for, they believe that foundational skills and self-assurance should be developed before young people begin working.

In fact, 37 per cent of employers in the report acknowledged that they’d be more willing to hire young people who had undertaken pre-employment skills programs.

Moreover, employers want young jobseekers to improve on particular skills. Specifically, 81 per cent see time management and reliability as skills that need improvement, alongside communication (67 per cent) and professional behaviour (54 per cent).

Findings in the youth report also discovered that a lack of basic skills is affecting young people’s ability to seek work in the first place, with only 22 per cent of people saying they had researched local job opportunities.

AKG emphasised that this is due to young people’s naivety surrounding the modern labour market and what particular roles entail, more so than a lack of initiative.

The report also showed that 27 per cent of people hire young people to handle busy periods and changes in workload, being the most common reasons. Not far behind as to why organisations hire youth is to keep staff flexible and manage costs (24 per cent) and to cover peak times, including weekends or short-term needs (17 per cent).

Seventy-nine per cent of employers surveyed believe that their young staff have minimal interest in additional hours, yet conversely, 79 per cent of young people who are already in casual or part-time roles report that they do in fact want more hours or even a transition into full-time security.

However, it was found that 49 per cent of employers also said that casual employees rarely or never progress into permanent roles, ultimately leaving many young people trapped in work insecurity, marked by unpredictable hours and wages and limited access to paid leave.

AKG executive manager Karen Massier said the COVID-19 lockdowns have had a significant impact on the professional and social development of young people, calling it a “tragic misalignment”.

“Because of COVID-19 lockdowns, [young people] are often entering the workforce with eroded confidence, a lack of workplace skills, and mental health challenges,” Massier said.

Massier attributes this as the prominent reason for young people struggling to navigate the workplace, being “frequently interpreted as [having] a ‘bad attitude’ or ‘lack of commitment’.”

“Employers hesitate to offer permanent roles, trapping these young Australians in a cycle of casual insecurity that further damages their mental wellbeing and long-term prospects,” Massier said.

As a solution, AKG calls for sector collaboration focusing on enabling long-term career pathways for Australia’s young people.

AKG’s key recommendations begin with early intervention, addressing barriers such as workplace readiness skills, transport, and mental health challenges before a young person reaches the interview stage.

Further, the report encouraged a bespoke approach for every young person, building a tailored runway to employment specific to their unique circumstances.

Additionally, the report sees embedding clinical mental health support and professional mentoring as core functions that can be potentially beneficial.

Finally, the report calls for employer co-design, ensuring organisations become active partners that provide structured pathways from entry-level casual work to long-term permanent stability.

Massier indicates that a systemic pipeline failure cannot be fixed by “blaming youth motivation”.

“Success demands a coordinated effort to replace fragmented entry-level roles with supported pathways towards permanent stability. Australia’s future prosperity depends on whether we choose to bridge this gap now,” Massier said.

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