FRIDAY GRAPH: THE YOUTH UNEMPLOYMENT SCANDAL

This chart from a recent New Zealand Institute publication tells a familiar story.

We think of countries like France and the United States as having shocking rates of youth unemployment (see my Friday Graph of 15 July for the United States).  And indeed they do.  In those countries youth unemployed as a percent of total unemployed is around 25%.  This is a far higher rate than in earlier decades when labour markets were less regulated.

But the chart shows that it is New Zealand that stands out with youth unemployment being 45% of total unemployment, the worst outcome in the OECD.

Why are our political parties not talking about this appalling state of affairs?  One reason is that many of them are complicit in bringing it about.  The abolition of the youth minimum wage, sponsored by the Greens and Labour, is clearly a major contributing factor to the surge in youth unemployment.  National in office has declined to reintroduce youth wages.  The New Zealand Institute in its report also ducked the issue.

This conspiracy of silence on the subject is an indictment of New Zealand’s seeming inability to face up to grim social realities.

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15 thoughts on “FRIDAY GRAPH: THE YOUTH UNEMPLOYMENT SCANDAL

  1. Question: N.Z. does not have a youth wage, and it’s at one end of the scale. O.K., but which of the OECD countries DO have a youth wage (or more correctly, did have one in 2009)? In addition, you have to be careful – the existence or not of a youth wage varies from state to state (province to province) in some of these countries.

  2. Could look at it another way. That employment in NZ is strong amongst older groups.

    NZ has 6.6% overall unemployment (OECD average is 8.2%) and 17.5% youth unemployment
    (http://www.dol.govt.nz/publications/lmr/quick-facts/youth.asp)

    Taking Spain as an example it looks relatively GOOD on the above graph – 8th lowest.

    Yet it has the highest overall unemployment at 20.5 percent (HLFS Tables). And very high youth unemployment at 43 percent. The reason it looks good above is that their high unemployment is more evenly spread across the age bands.

    Just taking the glass half full approach:-)

    High unemployment is always undesirable and represents lives that are frustrated at the least.

    • We’d need something beyond just the country list, David. NZ’s minimum wage is roughly half the average wage and applies to 15 year olds. Another country without a differential youth minimum wage mightn’t have the problem we’re having if their minimum wage is a quarter or a third the average and consequently less likely to be binding.

      Something seems to go wonky in the youth unemployment rate in New Zealand starting around third quarter 2008. Yes, recession. But I mean relative to the adult unemployment rate and looking back to the start of HLFS data in ’86 – a period spanning two far worse recessions in terms of adult unemployment. And third quarter 2008 is about when we’d expect the abolition of the differential lower youth minimum wage to start biting.

    • with a saturated unskilled labour market it is no-wonder 15-19 year olds are unable to find jobs, they are competing with unskilled mature people who are not retiring until much later in life. a youth minimum wage(ymw)with its cheaper labour costs takes jobs from mature people with mortgages and mouths to feed. the absence of a ymw (and the reduced opportunities for youth employment it creates) influences youth into training, with a growing demaind for skilled labour we need youth to be in training, they need to be our skilled labour force of tomorrow not adding to an already staturated unskilled labour market.

      • Very interesting comment. It makes sense to look at other factors that could influence the data.

        The data could be perfectly consistent with a healthy labor market in the way you described. Market forces are giving young people the incentive to train/study etc, which is what should happen?!

  3. I left school ( a good one ) aged 15. In 1954.
    Joined the Royal Navy.. As a Boy Seaman.

    The City of London Police force was over 90% ex Boy Seaman..
    The London Metropolitan Police were over 42% ex Boy Seaman..

    My point ??..

    Why are we wasting so many young lives by not giving them an outlet for their potential.. ???..

    My pay ??.. 30 shillings.. $3.00

    Pay was not even a thought in my mind at the time..

    I had adventure in front of me..

    at one time

  4. I left school ( a good one ) aged 15. In 1954.
    Joined the Royal Navy.. As a Boy Seaman.

    The City of London Police force was over 90% ex Boy Seaman..
    The London Metropolitan Police were over 42% ex Boy Seaman..

    My point ??..

    Why are we wasting so many young lives by not giving them an outlet for their potential.. ???..

    My pay ??.. 30 shillings.. $3.00

    Pay was not even a thought in my mind at the time..

    I had adventure in front of me..

  5. Ooops !!

    Excuse the double up..

    If you can find a fully fledged Boy Seaman prior to 1956 today that came out of.. HMS St VINCENT ( The best ) or From HMS GANGES ( Those others )..

    You ,will be hard pressed to find a single one.. WHO REGRETTED ever enduring the harshest training meeted out in those days….

    We all carry it with PRIDE..

    One thing that is missing in so many young peoples thinking ..

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