Generation Jobless: Perhaps it’s time for some drastic solutions
With budgets and elections the talk of the past few months, much has been said and promised to tackle Queensland’s rising youth unemployment.
‘Emergency’ measures may temporarily stall youth unemployment rising, but they do not target the cause of the issue. In particular, governments tend to focus on apprenticeships as a quick solution to youth unemployment, which can make young people more employable but they will not substitute for economic recovery.
The bottom line is that the prospects for the youngest generation of our workforce cannot improve until the Queensland economy improves.
Soft economic conditions are arguably the largest contributor to youth unemployment, but the list of causes is indeed a very long one and no one cause can be isolated and treated on its own. It includes an extremely broad spectrum of issues from the lack of soft skills to the workplace relations system, through to the slow pace of maturity in Queensland’s innovation ecosystem.
Policy makers need to keep in mind that the next generation of taxpayers might benefit more from less public debt than from money spent on programs designed to tackle youth unemployment.
If we were to look at some of the more ‘drastic’ measures to assist in fixing the problem, perhaps youth unemployment could be solved sooner. It is becoming clear that small, incremental changes to the current system are simply not working, and maybe it is time for bigger reforms.
Please note, these are in no way CCIQ endorsed views and simply food for thought. These are outside of more conventional reforms, as suggested by CCIQ in January, 2016 (read here).
1. Payroll tax exemption for all under 25 year old employees: Many businesses deliberately hold off taking on more workers to avoid the burden and complexity of the tax. Payroll tax essentially puts a cap on employment but if lifted for young people, this could see businesses offer younger workers a job during the growth phase of their business.
2. Facilitate work sharing arrangements during downturns: During the recession, German Government policy resulted in work-sharing arrangements that deliberately reduced hours worked for all employees and to limit layoffs during the recession. That kept Germany closer to full (if not full-time) employment and prevented workers' skills from eroding while the economy slowly recovered. Germany has the lowest youth unemployment rates in the EU.
3. University students to ‘run a business’ in their final year: Students should be encouraged to develop entrepreneurial skills and use their knowledge obtained at university to build a business. While it shouldn’t be expected that students are successful at their first go, those who do make it will create businesses that could employ in the future. Even if they don’t succeed, the development of business skills, soft skills (which many employers are increasingly concerned about) and other lessons along the way will go far in the professional world.
4. ‘Youth quotas’ for large-sized businesses: Businesses with a high number of staff have greater capacity to take on and mentor younger workers. Mentoring of a young worker in the workplace, particularly through apprenticeships, is one of the most valuable and effective development opportunities an organisation can offer their employees. The guidance and support of a highly-experienced mentor can lead to engaged workers and improved performance of the organisation.
5. Conscription in Australia: While it goes against our constitution and freedom of choice, programs can also be offered outside of soldier training that could see young people becoming economically active when discharged from military duty. Doctors, nurses, engineers, mechanics, electricians, technologists, teachers could be trained in the military.
Youth unemployment should be a concern. When it starts rising, it’s often an indicator that the economy is more likely to get worse.
But until it starts being viewed as a measure of economic conditions rather than as an isolated issue, emergency measures will always be favoured over perhaps more meaningful solutions.