Give youth a leg up not a handout - The Centre for Independent Studies
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Give youth a leg up not a handout

158e5056-d52b-45f4-9747-780c1f7a4fffWe need economic reforms to foster investment and job creation that can fight the rising problem of youth unemployment in Australia. My new research report outlines that jobless rates have nearly doubled since the GFC, and around 300,000 young Australians are currently unemployed.

As part of the growth agenda to battle this problem, we must address the job-destroying impacts of high minimum wages – including penalty rates. These are barriers preventing the creation of more jobs for young people.

In this regard, the report recommends local variations to our national minimum wage system, which is a key policy recommendation endorsed by the OECD.

We need to recognise that minimum pay levels in Sydney and Perth – with Sunday entry-level pay rates on cafe shops around $40 an hour, for instance – are simply not affordable in high unemployment areas across the country.

In addition, the report also recommends fixed-period discounts for the long-term unemployed. This echoes what Germany has implemented to raise the chances of long-term jobseekers to return to the workforce.

Right now in Australia, one in five young jobseekers are experiencing long-term unemployment – with long-lasting negative impact on their job prospects.

Further, the report outlines a widening skills mismatch in the youth labour market and finds that boosting the education outcome for numeracy and literacy is vital to equip young workers with the basic foundation to navigate the labour market.

The report also focuses on the challenges of lifetime welfare dependence, and proposes following the investment approach reforms implemented in New Zealand – targeting public resources where the taxpayer dollar has the highest impact in assisting those in the welfare-to-the-workforce transition.

Youth unemployment in Australia is a real issue. Yet there is hope – as long as it comes attached to an effective to-do list on growth, smart regulation, education and proper welfare assistance.

This is about giving our most vulnerable young workers a leg up instead of a handout.