Youth Unemployment Creeps Up Again: Warning Signs Behind the Numbers

Australia’s youth unemployment rate climbed to 10.4% in June 2025, up from 9.5% in May and 8.9% in April, according to fresh data from the Australian Bureau of Statistics (ABS).

That rate is the highest since early 2023, marking a second consecutive increase following 8 months of consistency around the 9% mark. While still far from the recent COVID-era peak of 16.6% in mid-2020, the uptick is beginning to erode the post-pandemic recovery that saw youth unemployment hit a record low of 7% in July 2022.

The Longer View

It’s important to place these figures in historical context:

• In the second half of the 2010s, youth unemployment sat consistently above 11%.

• The COVID crisis drove the rate to 16.6% in mid-2020.

• The sharp decline in unemployment in 2021–2022 was seen as a major policy success, driven by stimulus, a reopening labour market, and a surge in retail and hospitality hiring.

  
  

But now, the positive trend may be reversing, not dramatically, but steadily, and the rate has been above 8.8% since October 2023.

Why the Rise?

Several factors may be feeding into the current upward trend:

1. Cost of Living Squeeze on Employers

   Small businesses, who traditionally serve as major employers of young workers, are cutting hours or reducing hires as monetary pressures mount.

2. Competition from Older Workers

   In uncertain times, older workers may re-enter or remain in the workforce longer, competing directly with younger applicants for entry-level positions.

3. Mismatch Between Skills and Jobs

   Employers increasingly demand “job-ready” skills even for junior roles, leaving some school leavers and graduates struggling to meet expectations without further training.

What This Means for Young Australians

Youth unemployment is not just a short-term problem. Long periods out of work early in life can have long-term impacts on earnings, career progression, and mental health. Economists call this “scarring”, and evidence from past downturns shows that it can persist for a decade or more.

Rising from a record-low 7% in July 2022 to 10.4% now may not sound catastrophic, but for the individuals affected it can mean:

• Taking longer to secure a first job.

• Accepting roles below skill level, slowing career growth.

• Increased likelihood of insecure or casual work.

Policy Questions Ahead

The trend raises two big questions for policymakers:

1. Should interventions be targeted now, or is this just a temporary blip?

   Waiting risks embedding the problem, but acting too soon could see heavy spending directing towards what might still just be a short-term fluctuation.

2. Where should support be directed?

   Programs that work well in metropolitan areas may not address the barriers faced in regional communities, where transport, housing, and fewer local employers present different obstacles.

The Balancing Act

For now, Australia still remains well below the youth unemployment averages of the late 2010s. Tell someone from 2015 that five years later the rate would be 10.4%, and they may have made some remark about a long-term positive trend. But trends can change quickly, and the fact that rates have been above 8.8% for twenty-one months suggests more than a one-off statistical bump.

If the pattern continues into the second half of 2025, we may be looking at a more entrenched slowdown in youth job opportunities, one that could even outlast the current cost-of-living pressures.

The lesson from the past decade is clear: once youth unemployment takes root, it is far harder to bring down than it is to prevent in the first place.