There is a yawning chasm between the prospects and prosperity of generations in Australia and our legislators seem unwilling to even acknowledge the problem, let alone tackle it, writes Ian Verrender.

Treasurer Joe Hockey is certainly right about one thing. This truly is the end of the age of entitlement, at least for anyone born after 1985.

While Hockey divides the world, or the nation, into "lifters" and "leaners", the yawning chasm between the generations and the unwillingness of legislators to even acknowledge the problem let alone tackle it is of much greater concern.

As a legion of post-war baby boomers eyes a retirement supplemented by surging real estate values and tax free superannuation income, those under 30 find themselves saddled with mortgage sized education debts, no chance of ever buying a home and shrinking employment opportunities in their chosen field of study.

Ever since the last great recession, in the early 1990s, our youth have been delivered a simple but stark message: the world is changing, and if you are without skills, you will not survive.

Large numbers heeded the call. School was suddenly transformed into an academic battleground, university entrance marks assumed a life or death importance, determining who and what you will be in life.

But a degree no longer is an entre to a career. Nor are post-graduate qualifications. And the corporate world, sensing the opportunity for advantage, now routinely employs new graduates as trainees or interns for extended periods on no pay whatsoever.

The following is an excerpt from a letter penned by a new graduate to the latest edition of InPsych, the Australian Psychological Society's journal.

But what strategies do these graduates use to cope when they discover there is little prospect of meaningful employment? What is the state of their mental health?

Last week's unemployment figures showed a rise to 6.3 per cent. The good news, we were told, behind the raw numbers was that jobs were being created. It's just that more people have begun actively seeking work.

But what kind of jobs are they? How many law graduates have abandoned the dream of joining the bar and are instead serving drinks behind one? What will all those young engineering students do in a land that has precious little infrastructure projects on the go despite all those long forgotten pre-election slogans?

The only meaningful research on graduate employment comes from the annual survey conducted by Graduate Careers Australia and its latest findings are disturbing.

The anecdotal evidence from young lawyers who've given up, from the psychologists packing shelves at Woolies, finally is showing up in the data.

It is still true that those with tertiary qualifications are more likely to be employed. And they have a better chance of earning a higher income than those without a degree. But the position for new graduates now is the worst since the recession of 1992.

According to the survey, 32 per cent of graduates remained unemployed four months after finishing their degree in 2014.

That is a sharp downturn from the previous survey, which showed 29 per cent unemployed. And it is a continuation of a trend evident since 2008.

Among those employed, an even darker picture emerges. Between 15 and 30 per cent of new graduates in the vast bulk of professions who do have a full time job are looking elsewhere.

That too is significantly higher than in 2008. So, the number employed is much smaller, and many of those with a job want something else, indicating that an alarming number of new graduates cannot find work in their chosen field.

Clearly, many have grabbed whatever they can whether it be in hospitality or labouring. It is almost certainly not in manufacturing, which continues to shrink in the aftermath of the resources boom.

Little wonder then that Hockey's recent advice to would-be first-home buyers touched such a raw nerve. If they wanted to get into the housing market, he said, they should start by getting a decent job.

There isn't a great deal a government can do to directly boost employment for professionals apart from ensuring the economy runs smoothly.

But ignoring the vast transfer of wealth currently taking place, courtesy of the superannuation taxation concessions while encouraging property investment through generous tax concessions is neither politically wise nor sound economic management.

For many under thirties, the working world is a much less secure place than that experienced by their parents. Many now are contractors who do not receive the conditions enjoyed by older Australians on awards. And they have far less bargaining power when dealing with well heeled corporate "clients".

Economic purists would argue that the erosion of award conditions has delivered greater "flexibility" to the economy. That may be true. But if the proceeds of that increased flexibility are redistributed to an ever more concentrated section of the economy, social consequences soon follow.

The Productivity Commission report on workplace relations last week pointed out in its own report on "flexibility" that there was little link between workplace relations and productivity. And regular Drum contributor Greg Jericho last week did a neat job highlighting exactly that; increased "flexibility" does almost nothing to lift productivity.

Which begs the question: why was the Productivity Commission doing a report on something that it acknowledges has an indiscernible impact on productivity?

The Productivity Commission noted that ours is a unique workplace relations system. It also noted that it is one that largely works. Industrial disputes are low by international standards. Wage growth has been modest, even during the greatest resources boom the nation has seen. Right now, wages growth is about the slowest since records began.

For a generation that has faced far greater competition and worked harder than its predecessor, and found little reward at the end, the idea that their already meagre wages should be cut and that standards for them should be lower than their parents will not be easily swallowed.

Flexibility is a fine ambition. But what about fairness? That's something to which we all should be entitled, regardless of your age.

Ian Verrender is the ABC's business editor.