The family problem

Written By: - Date published: 10:07 am, December 25th, 2010 - 36 comments
Categories: Economy, unemployment - Tags:

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?

36 comments on “The family problem”

  1. Bill 1

    On first blush, that would appear to be a component of an argument for lowering the retirement age, no?

    • lprent 1.1

      Not really, the group that they compared against excluded the 55 and over for a reason. They also have high unemployment.

    • Lanthanide 1.2

      Someone who is retiring because they’re 60 is unlikely to be replaced in exactly the same role by someone who is 20.

  2. Zaphod Beeblebrox 2

    If we pay them $1 per hour we may be able to match Australia. Then again it would be easy to move back to Australia, so your kids could have jobs when they finish school- not that hard to do.

  3. Colonial Viper 3

    This is a shocker. The damage this is doing to the future of NZ can’t be calculated. A youth population which doesn’t have the opportunity to develop good work habits, attitudes or skills is going to turn into an adult population which doesn’t have good work habits, attitudes or skills.

    As for career options? DPB anyone?

    Frakin cynical NATs.

    • Bill 3.1

      A youth population which doesn’t have the opportunity to develop good work habits, attitudes or skills is going to turn into an adult population which doesn’t have good work habits, attitudes or skills.

      There’s a bit of a qualifier missing there. The work habits, attitudes and skills you refer to are presumably those to be utilised or exploited in the context of Capitalist work relations? But good work habits are not dependent upon, and are arguably damaged by the orthodox structures of work environments.

      Attitudes too, are warped by that environment. And the development of skills is not wholly dependent upon that environment either.

      A bit of freedom from an oppressive orthodoxy that insists that an acceptance of degrees of disempowerment and exploitation are ‘good’, and that such acceptance is the key to the only path that can lead us to a meaningful working life could well be a good thing.

      I’m not saying it will pan out that way.

      Our accepted orthodoxy is very successful in crowding out or shutting down any propositions that suggest other ways of developing our work environments. And so ‘unthinkable’ alternatives that would be rewarding and meaningful in both psychological and material senses get to be ‘still born’.

      Which means, I guess, that in the absence of ‘prohibited’ thoughts, you’re right. Far too many unemployed will ‘waste away’ as they await their grand opportunity to become atomised wage slaves.

      • Colonial Viper 3.1.1

        There’s a bit of a qualifier missing there. The work habits, attitudes and skills you refer to are presumably those to be utilised or exploited in the context of Capitalist work relations?

        I’d argue that even in socialist work relations e.g. a dozen people working co-operatively together in a business enterprise that they are each part owners of, and each have an equal say in, certain basic work habits, attitudes and skills are required.

        For instance, turning up to work on time, appropriately dressed, fit for duty. Being able to see what needs to be done and doing it without needing to be told. And the ability to gain and use value adding skills on a consistent basis. Good communications skills.

        Yes these are all things useful for a capitalist enterprise. Interestingly though, IMO they are also useful – or adaptable – to work in a socialist enterprise. Although in a socialist enterprise, everyone needs to think a little bit more like an enterprising owner/innovator, and not like a capitalist do-what-you-are-told serf-drone, so there is a bit of a difference in emphasis.

  4. John H 4

    You do know it’s Christmas Day don’t you, miserable pricks. Why not leave the politics aside for one day a year?

    You obviously (hopefully?) don’t have kids (given you’re spending Christmas morning posting your leftie spin on a blog) which is quite possibly why you don’t understand the damage abolishing youth rates has caused.

    Anyway, relax, have a glass of Chardonnay and put your feet up for 1 day, eh?

    • lprent 4.1

      There was zero direct politics in that post – if you saw any then it probably points to you having a guilty conscience.

      • Logie97 4.1.1

        @John H. Guess you were looking in the mirror as you typed your comment. Might come as a surprise to you , that rust never rests, and as bright and cheerful as you might like the rest of the world to be on this day, reality goes on.

        “During times of famine, if they would only resign themselves to eating paté crust!”

        Cheers, hic.

    • bbfloyd 4.2

      john.. nice little rant by the way. but what are you doing here , if not indulging yourself with a bit of petty political pointscoring.

      bit of the old pot calling the kettle black?

    • millsy 4.3

      Do you really want a low wage economy John?

      Is is cutting wages your answer to everything?

      Why not just bring back slavery?

  5. burt 5

    Youth rates….

    • trademark 5.1

      While we’re at it, why not have elderly rates? If 55s+ have high unemployment too, I’m sure they wouldn’t mind a lower rate of pay in order to get a shot at being redeemed by the glorious purifying forces of the capitalist mode of production.

    • bbfloyd 5.2

      good old burt… still no more than a thin echo.

    • jbanks 5.3

      The correlation between removing youth rates and increased youth unemployment is plain and simple.

      Why would employers hire someone not as good for the same price as someone better?

      • Colonial Viper 5.3.1

        Why would employers and the National Government disagree with pushing everyone’s wage rates down? Oh that’s right, they don’t that’s exactly what they, and you, want.

        So jbanks, if we halved wages for youth, would we halve youth unemployment?

        How many adult workers would lose their jobs and be replaced by cheaper 19 year olds?

        IMO all wages must go UP and must go UP substantially.

  6. Adrian 6

    I think you will find that us and the other highest ranking countries also have the highest youth, particularly male, suicide rates as well. The NActs probably think one problem will solve the other. Arseholes!.

  7. Redbaron77 7

    New Zealand has been traditionally reluctant to address widespread youth unemployment during recessions. Society tends fall back on self-referenced half-truths that it some how exemplifies a lack of character within the next generation rather than properly address it. However the long term impact of being unemployed for extended periods during one’s youth as well as the associated curse slim opportunity can have long term ramifications for otherwise responsible individuals caught up within the maelstrom.

    The net result is twofold. There is an increased risk of people falling into a semi-suitable job path due to the economic situation and failing to properly utilize their abilities over a long term course of their lives. Society likewise misses out on their latent but unexpedited contributions and also with having to deal with the supervenient risks associated with than normal levels of frustration through a range health and social issues.

    However the pattern of high youth unemployment due economic downturn will be ongoing until society properly recognises its risks and shoulders some of them by developing tangible policies to address it.

  8. kinto 8

    People whinging about youth rates tend to forget there are advantages to employing young people too, faster learners, happier to work odd hours, available for more hours over busy school holiday periods, easier to push around, less likely to go to employment court ect ect

  9. SPC 9

    It’s because of an employer expectation of educational training before employment (and if lacking skilled locals their access to skilled immigrants) – our transition from apprenticeships and trainee positions is now virtually complete.

    While we now have the strategy of people being in work or education or training till 18 – this is because half of those on the dole under 18 back in 1999 spent 5 of the next 10 years on benefits – the thing is the growing numbers of teenagers who are Maori and Polynesian and the consequent need to lift their school achievement so they go onto tertiary study.

    Moves to link high school students (cNCEA level 2) to part-time work experience and or work training placements may we one effective response of late we can go further with (possibly Level 2 over 2 years part-time and Level 3 over 2 years part-time?).

  10. jcuknz 10

    Whatever the short term answer is, the long term one is that we need fewer people to run our society assuming there will not be any more wars to kill off the younger members of society on a regular basis. But there becomes a point when a modern society, or any society, cannot function with less people and it starts to retreat towards a stone age .. it seems to me that we need to find the correct balance point which also balances with the ability of the world to support us.

    • Logie97 10.1

      jcuknz
      unfortunately after a day or two posts such as yours get lost in the ether…

      Open mike 29/11/2010


      Open Mike on 29 Nov had a related thread.
      Unfortunately it’s those few who will control the direction of society and the voice of the masses will count for nowt.

  11. jcuknz 11

    While Germany apparently leads in the matter of youth employment it is not the happy place it once was due to workers taking wage cuts etc to promote exports ….and like my impression of the current NZ situation that the change in money situation .. there the change to the Euro … here the tax-cut/GST rise swap … both have led to increased prices with people having little or no more money to meet them. prices being put up by people not really understanding the situation so up they go to be ‘on the safe side’.
    http://www.nytimes.com/2010/12/25/world/europe/25germany.html?pagewanted=1&nl=todaysheadlines&emc=a2

  12. Deadly_NZ 12

    As someone who has hired young teens from 14 to 17 let me tell you a li\ttle about what you are getting.

    Girls are better than Boys, for some reason Boys brains are not wired right, they are only interested in Cars , Girls etc etc. So are more likely to let you down. Especially if there is a party. Girls are more reliable easier to teach or give instructions to and not afraid to ask questions if they are not sure. (Boys just seem to think they know it all). And if girls have an invite to the party they will usually work first or even ask if they can leave early. Boys just don’t show up. Now I managed fast food places for 8 years Pizza parlours and Burger shops and in that time I probably hired 100 or more teens and I only ever had to fire ONE not a bad ratio. Also the teens that learn Goood work and money practises are less likely to be the ones causing trouble all over the place, it also gives them a feeling of being valued…

  13. Douglas 13

    What are the age demographics of those societies? Surely the proportion of older to younger people in the population has an effect? I don’t know what that might be and looking at the graph doesn’t hint at any obvious effects but the age demographics will certainly impact the results

  14. jacqui 14

    Seems a bit daft that NZ is one of the world’s best country’s in terms of educational achievement yet we can’t find jobs for our school-leavers. Where is the incentive for our young to achieve? No wonder the smartest move overseas. University places should be focussed on what NZ can actually offer in terms of employment so at least tertiary education reflects what is available in the workplace – Lincoln University being a good example. Currently the void is filled by lesser-educated migrants, who have the right level of training and qualifications. More can be done to ensure our young get the right apprenticeships but the whole education to work system needs common sense and logic applied. What’s the point churning out media studies students if there are only a handful of jobs on offer each year? We are setting our young up to fail but this country is failing its youth on many other levels too.

    • Carol 14.1

      I agree there should be more focus on vocational training targetted at the jobs available. However, university education is about more than vocational preparation. There should be courses aimed at increasing the knowledge and skills required for citizenship in a democracy, and to further the knowledge and understanding of all realms of society (economy, science, philosophy, etc)

    • Colonial Viper 14.2

      So why aren’t our highly paid so-called ‘worth it’ business and political leaders creating an economy (+ soceity) which is going to productively utilise our highly trained, smart, young people.

      Interesting question eh. Is it a lack of motivation, a lack of ability, or ideology getting in the way of our ‘leaders’.

      If a young person finishes their trade cert or a BA/BSc/BCom etc there should be a long list interesting $35K-$45K p.a. jobs waiting for them in this country.

      There are not, and there have not been for many years.

      Only sensible option, now that UK/Ireland are in a hole, is to leave for Australia. But even things aren’t all rosy there these days.

    • burt 14.3

      jacqui

      The last govt just overtaxed and paid off debt doing nothing to address this issue. The current govt taking over a stagnant low wage economy from the prudent Labour party are well placed to make sweeping changes but I’m not holing my breath. Education is a really good political football and as National standards shows us Labour will probably just reverse it all on principle throwing the baby out with the bath water for popularity.

      • Colonial Viper 14.3.1

        lolz still blaming the previous administration? When the National Govt has allowed wages and employment levels for Maori, women, pasifika to collapse over the last two years, and has conducted a deliberate wage suppression strategy amongst all other workers.

        • burt 14.3.1.1

          Oh god here we go again. It’s like the 9 years of Labour mismanagement leaving a low wage economy in recession just two years ago never happened for you. I’m picking in your world we went directly from the failed policies of the 90’s to today and we need Labour to rescue us.

          • Colonial Viper 14.3.1.1.1

            Failed policies of the 1990’s? You mean Ruth Richardson’s Thatcher like free market reforms? Ruthanasia?

            Lolz mate 9 years of budget surpluses under Labour, on track for 3 strikes out for Bill and John.

            What, do you reckon National giving another tax cut to the rich will help? Of course it will.

            Help the rich that is.

          • bbfloyd 14.3.1.1.2

            burt,,, that warm safe place that you keep retreating to, that you seem to be mistaking for john keys wisdom and statesmanship, is actually your own rectal cavity… you really need to stop doing this shit!!

      • millsy 14.3.2

        Hey burt,

        How many hospitals did National close between 1990 and 1999? How many hospitals did Labour close between 1999 and 2008?

        Labour raised tax to keep hopsitals open. Simple

  15. Cannot think of a clever name 15

    Being a little picky

    “We have one of the worst youth unemployment rates in the world.”

    should read

    We have one of the worst ratios of youth unemployment as compared to adult unemployment.

    Unemployment rate is commonly accepted as the actual %age of those unemployed within a specified group. In absolute terms our youth unemployment is a bit over the OECD average and our 25-54 age group rates are reasonably below the OECD rate. If one was just concerned about the ratio then Estonia with absolute youth unemployment double with ours would be seen as better, which it obviously isn’t.

    Not that the ratio isn’t important as it does indicate relative difficulty of the youth joining the workforce.

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