Politics

It’s Getting Harder And Harder To Get By. That’s Why We Need A Youth Jobs Guarantee

It's time to level the playing field for young people.

Millenial voters, youth guarantee

We all know being a young person in 2019 can be hard — trying to pay bills, make it to all your uni classes, get to work on time and still have a life can be a really difficult thing to balance. While people under 30 are often told they need to be resilient or that they crave the ‘flexibility’ of casual employment, there is evidence to suggest that things have been getting worse for young people — a lot worse.

The latest data shows that wages aren’t growing, cost of living is going up and it’s getting harder and harder to make the leap from being a university student to being a full time employee in a job that you studied for. Worse still, graduate wages are shrinking over time. For those who graduated between 2006 and 2009, the average weekly wage was $947.31 in their first year of graduate employment. For those who finished university between 2012 and 2013, that figure had shrunk to $791.58.

This shouldn’t be that surprising given that Australia is one of only a handful of countries to have lower legal minimum wages for young people, along with Chile, Luxembourg, New Zealand, and the UK. Unfortunately for young Australians, our country has the lowest youth wage compared to minimum wage in the world.

All of this isn’t an accident — it’s a product of the way that the government steers our economy.

For a generation, the government has taken the hands off the wheel of our economy and let the ‘free market’ do it’s thing. It just turns out that it’s ‘thing’ is profiting from the exploitation of young people.

That’s why we need a new way of steering our economy and a new way of providing work for young Australians – we need a youth guarantee.

What Is A Youth Guarantee?

The youth guarantee (or a teen new deal) is a policy agenda that’s designed to ensure that every young person under 25 is either in employment or education. At the core of the guarantee is the idea that every young Australian is different, will have different needs, and will require different levels of skills training, employment services and educational qualifications, based on their aptitude, experience and capacity.

Crucially, under a youth guarantee, every young person under the age of 25 (and every recently graduated person under the age of 30) is offered either a job, a paid internship, or a free course at uni or TAFE within three months after registering as unemployed.

While this might sound like a difficult thing to achieve, the idea is already being implemented across Europe. While it is being rolled out in various stages across 20 member states of the EU, the results are promising.

“For a generation, the government has taken the hands off the wheel of our economy and let the ‘free market’ do it’s thing. It just turns out that it’s ‘thing’ is profiting from the exploitation of young people.”

Since first being implemented in 2013, an estimated 14 million young people have taken up an offer of employment, education, traineeship or apprenticeship through a youth guarantee program. The program has not just been popular, it has been effective. In the six years since the youth guarantee was first rolled out, there are 2.3 million fewer unemployed young people across Europe and the number of young people not in employment or training has fallen almost two million.

There are latest impacts of this early intervention. While the program is aimed at people under 30, those who have access to the program have better employment prospects throughout their life, as the experience and skills they have earned through the youth guarantee remain useful and relevant. On average, young people who have been through the youth guarantee are less likely to fall out of the labour market or experience long-term unemployment.

So How Would A Youth Guarantee Work?

First, a publicly funded educational system. By offering free places for key courses in educational institutions like TAFE or university, we can reduce the financial barriers that deter young people from re-engaging in post-graduate degrees or from starting a course in a different faculty that offers better employment opportunities.

While this may seem like a radical step, the Victorian State Government has already shown that it is possible. Over 3,000 Victorians had enrolled in ‘Free TAFE’ priority courses since they were announced. This preliminary outcome holds promise that positive, Finnish-style vocational education changes could be implemented more widely in Australia.

Second, we have to make sure that the skills being taught are nationally recognised, and make sure that they are useful for the jobs that students are trying to get. Particularly in the vocational education and training space (where institutions like TAFE sit), deregulation has lead to thousands of dodgy providers flooding the system with degrees that cost real money, but offer no real skills or job opportunities.

Third, a student allowance that is set at a living wage. This is important because it reduces reliance on paid employment in non-career industries and occupations, like hospitality, retail and fast food. This is not only good for the Australian economy (as students spend almost all of their money back into the local economy by buying food, drinks and other necessities), but is also good for students. Aside from reducing financial stress and reliance on insecure work, a liveable student allowance also students’ ability to focus on studies and  makes them more available to take career experience opportunities like internships, placements and relevant skill development.

Fourth, we need to reform our employment services system. This system is currently provided by a range of private companies, who get referrals from Centrelink and are supposed to help unemployed people find stable and secure employment. Unfortunately, they’re not doing that. Instead, a recent government report on this industry found that these providers are “rewarded financially for churning people through jobs that don’t last”.

By investing in strong employment services that are designed to give unemployed young people a hand up towards careers, we can ensure that everyone is getting the best chance at a secure future.

While these reforms don’t come cheap, they have the potential to pay for themselves over time through the increased income revenue that comes with having more people in employment.

“While these reforms don’t come cheap, they have the potential to pay for themselves over time.”shirl

The latest statistics tell us that there are approximately 262,800 people under 25 who are unemployed. If a youth guarantee was implemented, and they would be generating an additional $1.6bn in tax revenue. If we include everyone under 30 who was unemployed, that figure could be as much as $5bn in additional tax revenue.

But it will take a lot of effort to convince our politicians that a youth guarantee is worth investing in. However, when so many young Australians are doing it tough it makes sense to offer a hand up, rather than a slap in the face.

Ultimately, it’s about the kind of country we want to be. We can be ‘resilient’ and keep our fingers crossed that things will get better of their own accord or we can make a youth guarantee a reality in Australia, ensuring that every Australian under 30 has a secure future and a job that they can count on.


Shirley Jackson is an Economist with Per Capita. He has written extensively on young workers and the changing nature of work in Junkee, ABC News, The Guardian, The Age, Crikey, and The Conversation.