Research from the Brotherhood of St Laurence has found over 310,000 people aged between 15 and 24 are in non-permanent jobs or would like more work, the highest in 36 years.
Coupled with unemployed youth, this figure tops 580,000.
"Over half of the jobs that young people are getting are casual in nature," the brotherhood's Tony Nicholson told ABC Radio
"Some work is better work than no work, particularly as it gives some work experience, but it does leave them in pretty tenuous circumstances from week to week, particularly for young people who don't have the support of family.
"This makes meeting their every days needs very, very difficult for them."
Mr Nicholson also criticised the Government's proposed 'earn or learn' policy, saying the scheme would carry an "unacceptably high risk of harsh, unintended consequences".
"We need to do much more than just make changes to income support; we need a much more comprehensive, overarching strategy that reflects the realities of the challenges faced by young people, as they're trying to make the transition from school to work," he said.
Youth underemployment has steadily risen since the wake of the new millennium and accelerated after 2008 global financial crisis.
See the full report here.