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Youth Unemployment: Policy failure

Neale Towart writes: The proportion of young people engaged in full-time employment has declined from 40% of all young people aged between 15 and 24 in 1995 to 29% in 2015. In contrast, part-time employment for young people increased over the period from 20% in 1995 to 30% in 2015 …Young people are a central part of the “new precariat” for whom insecure and non-standard employment has become the norm in a flexible, deregulated economy like Australia (Denny and Churchill).

We must invest in our education and vocational training systems. The most effective vocational training is done within the paid work environment rather than being isolated from that environment.

Governments and businesses seem to feel that reducing youth wage levels to what the market demands (low pay, no penalty rates) will magically create more jobs. It is great to get any job sometimes when you need that income, but a career path with a constant upward mobility of wages, responsibilities and skills is not a prospect for many these days. This not a natural order of things, but a situation created by economic policy developed since the 1970s, The following graph from the Centre for Future Work shows, the decline has been in concert with decrease government commitment to employment, with inflation as the big bogey at the expense of social well being.

public investment

“Creating” low paid casual and unskilled jobs has never been a successful way of boosting decent standards of living. Increasing standards of living are based on higher quality training, skills and jobs enabling better ways of doing things and more time to do other things .. like thinking, relaxing, educating yourself.

underemployment.png

The attitude we seem to have is dividing those who have jobs from the “unworthy” who are dependent on welfare.   Society has failed them. The real life examples in many western countries where the ideology of low pay, punishment of the unemployed, persecution of migrants and asylum seekers is not healthy for people or planet.

Underemployment rates exclude those who have given up and we know that participation rates have fallen.

We also know that fiscal stimulus (ie targeted government spending) does decrease unemployment and encourages participation. The graph highlights this with the ALP stimulus to combat the GFC decreasing underemployment and the underutilisation rates. The lessons so clearly visible are not learned.

Instead punishment and fiscal rectitude at the behest of financiers and at the expense of the population rule the roost.

The Intergenerational reports begun by Costello have, instead of addressing youth unemployment as a social issue, focused on forcing people to work for more years because of so called economic/budget issues.

At the same time governments have been increasing skilled migrant quotas because of employer claims of not having enough skilled workers Denny and Churchill point to

“a consistent trend over the past two decades, with a slight deterioration evident since the economic boom and bust of the late 2000s: young people aged between 15 and 24 have had considerably higher levels of unemployment and lower levels of participation relative to all other age groups. The findings also suggest that older age groups, to the detriment of the youth cohort, have benefited from increases in employment demand in the labour market over the 20-year period.”

Maximising employment and output in each period is a necessary condition for long-term growth. It is madness to exclude our youth – many of whom will enter adult life having never worked and having never gained any productive skills or experience.

Increased casualisation and allowing underemployment to rise is not a sensible strategy for the future. The incentive to invest in one’s human capital is reduced if people expect to only have casual and part-time work.

We must stop saying that 5% unemployment equals full employment. It does not and never has. The labour underutilisation rate is over 12% and over 22% for young people, allowing for those in education. This is a far worse situation than at any time since the 1930s. Vague commitment to subsidies for employers, and a continued path of making training and skills education a “competitive market” which has clearly lead to profit taking by training providers at the expense of those who can least afford it (who get minimal training at best) and a reduction in quality TAFE based courses which were originally established with direct linkages to workplaces.

As  Bill Mitchell puts it the  “ ‘unemployment industry’ has sprung up in the neo-liberal period to manage the unemployment that the government has deliberately created as a result of its obsession with fiscal austerity. …we have erected a massive corporate sector funded by government to manage the fiscal failure.” The ACTU hasattacked the total policy failure.  The NSW Upper House Inquiry gathered masses of evidence of the failure of the “Smart and Skilled” program to provide adequate training and lots of evidence that is successfully undermined the TAFE system.

Damian Oliver and Serena Yu point out that a “ lot is demanded of Australia’s VET system. It is expected to be a place where young people leaving school can pursue non-academic pathways, where workers can retrain and gain new skills to keep pace with a changing economy, and where people marginalised by the traditional education system (particularly Indigenous learners and migrants) can get a second chance.”

There is plenty of work we need to do to sustain and improve society and the environment. It is the commitment to funding that necessary work that is lacking.

( Lisa Denny and Brendan Churchill, Journal of Applied Youth Studies vol 1, no 2, 2016: Youth employment in Australia: A comparative analysis of labour force participation by age group)

 

 

 

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