Let’s fix youth unemployment once and for all

The latest youth unemployment figures are startling. The highest percentage of 15-24 year olds in a decade is jobless.

The evidence is in. Mandatory minimum wages have locked a significant portion of an entire generation out of the workforce. Surely these latest figures must shock the Federal Government into action.

It is unacceptable to have a youth unemployment rate more than double that of the overall figure. Employment Minister Eric Abetz is quoted in The Australian today saying that the rising youth joblessness is his greatest concern with the latest labour data from the ABS. The solutions he proffers today are further government subsidies to and a renewed commitment to “Work for the Dole.”

The time is long past due for a meaningful solution to out of control youth unemployment in Australia. Government subsidy after government subsidy and increasing the burden on the taxpayer will not address the problem. It has been tried for decades now, the problem persists.

Government can only be the solution in one way, by removing the shackles from business. Only by removing the disincentive to employ youth will the jobless figures shrink. If the Federal Government is serious about fixing the problem, it must cease tinkering around the edges with subsidies and welfare programs. Now is the time to rectify the underlying problem and remove the shackle that is the minimum wage. Do we want a small few being paid what the government tells businesses they can afford? Or do we want the great many earning a fair and competitive wage that business can actually afford? Unless we are content with permanently locking youth out of employment, something has got to change. If youth unemployment really is a great concern to the Federal Government and it wants to reduce joblessness, the best thing it can possibly do is get rid of the regulatory barriers it has put in place. The minimum wage isn’t helping our youth; it is hurting them quite badly.

James Duncan is Administration and Research Officer at  the H. R. Nicholls Society

 

Minimum Wage Increases: Unintended Consequences

Unions and other vested interests often push minimum wage laws to benefit their members – at the expense of those who are locked out of gaining employment.

Yet a recent example from the United States to increases in the minimum wage shows yet another consequence: increased mechanisation.

The fast food industry, which primarily relies upon minimum wage employees, is responding to such increased costs with … hamburger-creating robots!  Read more

The Impact of Raising The Minimum Wage

While from the U.S.,this discussion on Bloomberg TV is well worth watching.

Nela Richardson discusses the possible implications of raising the minimum wage with Scarlet Fu and Sara Eisen on Bloomberg Television’s “Market Makers.

Impact of Raising The Minimum Wage

The embed function is currently not working. Please click the above link to access the video. Our apologies for the inconvenience.

 

Answer Me This About Mandated Minimum Wages

Don Boudreaux, Professor of Economics at George Mason University, made this excellent point earlier today regarding the minimum wage:

You should ask these minimum-wage supporters the following questions: “If government enacts legislation setting the minimum price that people can pay for a new car at $50,000, do you – you confident supporters of government-mandated minimum prices – believe that this legislation will result in people paying $50,000 for the likes of Toyota Corollas and Ford Fiestas?  Or do you realize that if government obliges car buyers to pay at least $50,000 for a new vehicle, these buyers will choose to buy no low-end cars and opt (if they buy a new car at all) instead to purchase a new BMW, Lexus, or other luxury model?” Read more

Replace commission and boost productivity

The following is an expanded Letter to The Editor by Des Moore, member of the HRN Board of Management, in the Australian Financial Review:

Two things stand out from the Fair Work Commission’s decision to increase the so-called minimum wage by 2.6 per cent (“World’s highest low-paid workers”, June 4).

First, the decision to cover 1.5 million employees means there is an unnecessary increase to the many earning well above the lowest award rate who do not need social protection. Indeed, the Commission acknowledges that “a significant proportion live in middle to low income households” and that the tax-transfer system can provide (it does) more targeted assistance. It is obvious that the coverage is grossly excessive.

Second, the Commission also acknowledges that its decision “may reduce the capacity to employ the marginalised”. In reality there is no “may” about it: [it means that employers are unable to employ low-skilled workers at an annual rate of less than about $32,000. The union leader who winged on television about the supposed financial difficulties of those on the minimum (apparently she also owns a house and a car) should spare a thought for the many who cannot be employed at a lower wage. ]

More generally, the decision illustrates the need to replace the Commission with a regulatory body which gives priority to increasing national productivity.