The crisis of jobless youth

Youth unemployment is the worst it has been for decades and is raising fears of a new generation permanently scarred by being locked out of work at the starting gates.

james sleepThe latest statistics reveal that unemployment among the under-25s has risen to 65,700. They now make up a staggering 44 percent of the total of unemployed people.

The Human Rights Commission describes it as “arguably the most significant economic and social issue faced by New Zealand society”. Their report is on

It’s way out of step with comparable OECD countries, in part because many of our young people leave school too early. The New Zealand Institute says we have the highest proportions of 15 to 19 year-olds at work, or looking for work, in the OECD.  “[Many] OECD countries are protecting their youth from unemployment by keeping them in secondary and tertiary education.”

James Sleep, co-convenor of Stand Up, the CTU’s youth movement, says much more needs to be done to help young people as they begin to consider their after-school options.

“The research suggests that one of the strongest things a government can do is to make sure every young person has the support they need and the knowledge and skills to move from school to higher education, training or work.”

While there’s a plethora of apprenticeship-type schemes and training programmes available, the quantity and variety make for a confusing picture that’s hard for anyone to make sense of, let alone a teenager wondering what to do after leaving school.


Lack of clear information

In James’ view, the current system is too weighted to people who will go on to university which, unlike other options such as apprenticeships, is generally a straightforward path.

“Many have no idea what they will do when they leave school. They can fall through the cracks simply because they don’t have clear information put in front of them.”

Employers who don’t reward qualifications in the pay packet aren’t helping the situation either. A 2009 study by Statistics New Zealand and the Department of Labour showed that successful completion of workplace-based training resulted in often minimal or zero pay increases.

In 2009 the government set up Job Ops and Community Max which give employers incentives to take on young people who would otherwise be unemployed. But the scale is far from being up to the task and rather than being beefed up in response to the surge in unemployment, they’ve had their funding cut.

“It’s ludicrous that the government would cut the funding for schemes such as these just when youth-unemployment reaches an all-time high,” says James.

More welcome is the government decision to invest $42 million in trades training for the Canterbury rebuild. But this needs to move fast before young New Zealanders are overtaken by thousands of tradespeople coming from overseas.  

The most recent announcement from the Government is to create a benefit card for 16 to 17 year-olds that will restrict their freedom to choose how they spend their money.

"This fails to look at the real problem which is a lack of jobs, a lack of training opportunities and a weak youth transition system,” says James.

"We are talking about 1,600 young people who are on an independent youth benefit, most likely because they have come out of broken families.”

The scheme also aims to get these young people into work or education. Private agencies will be contracted to provide mentoring and support, with bonuses for success. CTU economist Bill Rosenberg describes it as a “privatised form of social welfare”.


Youth rates

Despite pressure from the Act party, the prime minister has shown admirable reluctance to introduce youth rates that would see young people, say 18 and under, paid less for the same work. Even Treasury is not convinced that youth rates are a solution to youth unemployment. As James points out, it could simply result in 17 year-olds being preferred over 19 year-olds.

When unemployment rises, young people, often with few skills and lack of work experience, are always at the back of the queue. The IMF noted last year that “some of the largest increases in the unemployment rate have occurred in Spain, the United States and New Zealand”.

Youth unemployment will only be solved by a hands-on approach to job creation, not by cutting public sector jobs or sending them offshore. Building our rail wagons in New Zealand instead of China would have created not only jobs but also new apprenticeship and training opportunities.

CTU economist Bill Rosenberg says there are three pillars to a sound youth employment policy. The first is to reduce overall unemployment "which government policies have so far failed to"; second, there needs to be clearer school paths to vocational education and work-based training, along with much better recognition in the pay-packet for gaining qualifications.

"And finally, even though we recognise they don't shorten the job queue, youth employment programmes should be expanded. There is simply not enough being spent on helping young people get jobs," he says.


This article is from the September 2011 issue of the PSA Journal. You can read back issues of the Journal by clicking here.