Wednesday, August 24, 2011

Steve Baron: Unemployed Youth: The Bane of Society


We are seeing riots around the world, many of which appear to be fueled by delinquent youth looking for an opportunity to express their anger with society. Many of which have a burning desire to take what is not theirs and what they have not earned. Unemployment rates amongst these youth have risen dramatically through the continuing economic down-turn. Unemployed teenagers walk down the streets of every town in New Zealand, spray cans hidden under their hoodies, usually looking for trouble rather than work.

I sat outside my local cafe listening to their derogatory comments as our local Senior Sargent drove past a group of them, in his unmarked car. They knew who he was and he knew who they were, as he glanced sideways with a glaring eye. These youth have an unemployment rate three to four times that of the entire work force. With an economic down-turn fewer jobs are available, making them more vulnerable to unemployment. This is partly because of their lack of skills and work experience. Maori and Pacific Island youth face even higher unemployment rates than Pakeha. Why would an employer employ a youth when he could have someone much older and far more experienced for the same minimum wage? It's just common sense really.

Many years ago I found myself in a similar situation, unemployed and looking for a job to keep me out of trouble. I walked into the Department of Social Welfare as it was called at the time. I didn't want the dole, just help to find a job. I was interviewed by this scruffy slob of a bloke who got me to fill out a form, which amongst other things asked me what jobs I preferred. I listed Prime Minister and Minister of Finance, trying to show a sense of humor and an aspiration of better things to come. He ripped the form apart and stormed out of the room in disgust. I yelled a few obscene words at him like... Quantitative Easing, Dead Weight Loss & Fiscal Deficit. This bought a gasp from the lady behind the counter who was amazed at my comprehension of economic language! The attitude is now changing and the New Zealand government is focused on welfare reforms aimed at young disengaged youth. This is an issue that has been festering for a long time, and only now that it is election year, is this festering boil bursting onto the political scene.

A number of different approaches to the problem have been discussed. One approach which has been proposed by the ACT Party is to re-instate youth rates. This was being conducted as a measure to help fix the problem, although the government has refused it so far. Alongside this, the minimum wage continues to increase which gives me great cause for concern. Increasing the minimum wage, or even having one at all, creates what economists call a 'dead weight loss', which leads to higher youth unemployment. Such academic insights are learned in Economics 101. Raising the minimum wage is great for those who currently have a job but it adversely affects the uneducated unemployed trying to get a job. Put it this way, I'd rather see my seventeen year old son earning less than the current minimum wage, than being on the dole earning just over $150 and bored out of his brain walking the streets looking for trouble.

There will always be those who argue everyone, including youth, are entitled to a minimum wage, so they can maintain a minimum standard of living. The reality is that these demands keep our youth, particularly those uneducated youth, out of work. They roam around with too much time on their hands and usually end up creating more than their fair share of crime. The government has offered some incentive for employers, by subsidising the wage of youth workers. Youth workers are abundant though, and those who need work rarely find it under these schemes.

Political pressure almost guarantees the government will never remove the minimum wage. It then falls on the local community, perhaps in association with Police, to find a way around the problem of unemployed youth. One way or another it will cost us, whether we do or don't find them employment. They do need work and education schemes to teach them the skills they need and to occupy them until full time work comes along. It is very easy to blame bad parenting as one reason for the behaviour of these youth, but there is only so much even the best of parents can achieve. Blaming parents will not fix the problem, it will only make us feel better to apportion blame without addressing the problem at its core.

1 comment:

Mike said...

Politicians will only show sufficient courage to re-introduce youth pay rates when the screams of the lefties are of no consequence at the ballot box. So, much as I hate to say it, if we want this to happen we need to ensure that national is returned at the forthcoming election with a truly massive majority. Then they may show some backbone and do what so many of us want: scrap the pointless ETS, return the seashore and seabed to public ownership, and scrap the anti-smacking legislation, as well as introduce youth pay rates or even scrap the very idea of minimum wage rates! Pigs might fly!