Kiwis frequently like leading the world in the many ways that outmatch our ‘weight’. I wish we weren’t leading the world in this one.
We have one of the worst youth unemployment rates in the world. The Economist compiled this chart showing the ratio of unemployment in the 15-24 age group compared to that of the 25-54 ago group. In our case we are world leaders in the worst way. If you are young then you’re four times as likely to be unemployed as the older age group.
THE global recession has hit young workers particularly hard. In the mostly rich countries of the OECD, the youth-unemployment rate (the unemployed as a proportion of the labour force aged 15-24) increased by 4.9 percentage points between 2007 and 2009, to 18.4%. By the second quarter of 2010 it had risen to 19.6%. Young people typically struggle to gain employment and are the first to be laid off; in nine countries more than one in four are now jobless. Spain has the highest youth-unemployment rate, at 42%, more than twice the unemployment rate of adults aged 25-54. In New Zealand, Sweden and Luxembourg, the youth-to-adult unemployment ratio is more than four. Germany has the lowest ratio (1.3), largely thanks to its successful apprenticeship system. The OECD warns that recovery will be slow and forecasts that youth unemployment will still be around 20% by the end of 2011.
The favourite excuse for some on youth unemployment is minimum wage rates. However, when you look at minimum rates by country and then look at the chart above, there does not to be a significiant correlation overall. There is lots of room to cherry pick individual countries. In fact when you look at almost any correlation the only one that appears to make a difference is the attitude of the society towards youth unemployment and how much resource they throw into making sure it doesn’t happen..
Knockon effects of youth unemployment get quite extreme over the longer term. The longer that kids are unemployed, the more damage they take to their confidence and skill, and less likely it becomes for them to have a productive work life later. The effect isn’t confined to the people directly unemployed. It carries through to their families as well.
Perhaps this Xmas, kiwis should review if having one of the worst youth unemployment rates in the world is how they wish to lead the world?