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Race to bottom not answer to youth unemployment

Race to bottom not answer to youth unemployment

11 January 2011

Calls to reinstate youth rates are detracting from the real issue of New Zealand’s appallingly high youth unemployment rate, says Labour’s Youth Affairs spokesperson Jacinda Ardern.

“The suggestion that the youth minimum wage is a practical solution to solving New Zealand’s high rate of youth unemployment is unfounded,” Jacinda Ardern said. “The real issue facing our young people is a lack of jobs and quality training --- something the National government has failed to address."

Data from the OECD for the September quarter indicated that 19.4 per cent of young people aged between 15 and 24 were unemployed.

“The last time that we saw youth unemployment rates reach this level was in the early 1990s, when youth unemployment reached 23 per cent,” Jacinda Ardern said. “Youth rates had no impact on youth unemployment then, and they won’t bring youth unemployment levels down now.

“In fact, when wages for young people increased youth unemployment continued to decrease. Under Labour, the youth minimum wage went from $4.20 an hour to $9.50 for 18 and 19 year olds and $7.60 for 16 and 17 year olds in 2005; increases of 126 percent and 81 percent respectively. By December 2005, youth unemployment fell to just 11.8% ---- a level not seen since 1987."

Jacinda Ardern said research by Hyslop and Stillman on Youth Minimum Wage Reform and the Labour Market also found ‘…no consistent and robust evidence of any adverse effects of the changes on teenage employment’ when youth wage rates increased.

“One in five young people in New Zealand are now out of work. The Government has failed to prioritise the real issue at hand --- the creation of jobs and access to quality training. Instead of taking the lead from other countries such as Australia, which has invested heavily in skills training and tertiary education to help young people into long term work, National has done the opposite and limited the access of young people to the resources that will help them into employment.

“What we need to see are Government policies that are committed to counteracting the dramatic increase in youth unemployment that we have experienced as a result of both the recession and National’s economic mismanagement, rather than policies that will send us racing to the bottom."

ENDS


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