Youth work crisis

There is broad political and social consensus in New Zealand that youth unemployment (15- 24 year olds) is a ticking time bomb as it is in many developed and developing countries globally. Business New Zealand Chief executive, Phil O’Reilly has described the record high youth unemployment rate as “an emergency” and that something needs to be done to avoid a generation of unemployed.

Latest OECD figures report New Zealand as having the 16th highest rate of unemployment of 36 OECD countries. The OECD's most recent survey shows younger Kiwis are 3.7 times more likely to be registered as not being able to find paid work than other adults.¹⁴ The youth unemployment rate was 18.8% as at March 2011.

The report ILO Global Employment Trends for Youth 2010 says that of some 620 million economically active youth aged 15 to 24 years; 81 million were unemployed at the end of 2009 - the highest number ever. This is 7.8 million more than the global number in 2007. It adds that these trends will have “significant consequences for young people as upcoming cohorts of new entrants join the ranks of the already unemployed" and warns of the "risk of a crisis legacy of a ‘lost generation’ comprised of young people who have dropped out of the labour market, having lost all hope of being able to work for a decent living". ¹⁵

The New Zealand Council of Trade Unions (CTU) states that young people want to work and up skill, but there simply are not enough jobs or training opportunities available for many young people. The Government has failed to provide a plan for how they will create long term and sustainable work and education opportunities, says the CTU.   In May the Government announced it would spend $55.2 million dollars on work and training subsidies for young people. Part of the package includes $17.2m for employers to employ and train young people in the aged care, horticulture, and agriculture sectors. The Mayors Taskforce for Jobs (MTFJ) welcomed the Government’s announcement but said the package presents “nothing new” and “isn’t enough.”

Some young people are beginning to “degree stack” by returning for their second and third degrees because they cannot find jobs. Others are forced to move geographic locations to find work, and many are becoming increasingly idle and disengaged. Many New Zealand families are bearing the cost and burden of young unemployed at home.

The Commission and the Mayors Taskforce for Jobs agree that a joined-up approach to youth employment is needed that requires active labour market interventions.

Youth employment issues
Young men and women have been disproportionately affected by the global recession. Both well-educated young people and others less educated are struggling to find work and this has a variable impact in different New Zealand cities and regions. For example, in Christchurch business sectors where young people work such as hospitality and retail have been hit hard by successive earthquakes and many employees are redundant or waiting in limbo to hear about the future of their workplaces. The Government announced it would provide up to $42 million in the 2011 Budget for trades training in the Canterbury region to aid recovery. This would provide up to 1500 additional training places at polytechnics, private providers and ITOs.

Many who are in employment, especially young women, are often engaged in relatively unskilled or informal and precarious occupations, which is a major waste of human resources, as well as a source of considerable frustration among young people and their families. A New Zealand Institute of Economic Research spokesman reported that young people were often in more vulnerable sectors where there is less job security, high turnover, lower wages and more part-time and casual hours.¹⁶

The unemployment situation of Māori and Pacific youth is particularly acute. The Household Labour Force Survey for March 2011 shows Māori youth unemployment at 28.8% and Pacific youth unemployment at 28.1%.   A comparison of youth unemployment rates between 2006 and 2011 shows a dramatic increase. The unemployment rate for youth was 17.5%¹⁷ in the year to March 2011, which was 0.4 percentage points above its level a year ago, and 7.9 percentage points higher than its level five years ago. Compared with the unemployment rate for all people, which was 6.6% in the year to March 2011, the youth rate is noticeably higher.¹⁸

While up-to-date data for unemployed disabled youth is not available, disability advocates and commentators note the double disadvantage in the labour market of being both disabled and young. Disabled young people believe strongly that employer attitudes need to change. More than three quarters (76%) who had looked for work said their job seeking experience was poor or very poor.¹⁹

There are major issues facing young people and work:
• The recession has had a dramatic impact on youth unemployment numbers;
• There is a worrying level of employer bias about hiring young people;
• Young tertiary-qualified people are struggling to gain employment;
• Some secondary students are working long hours while still at school;
• Youth with low levels of educational attainment, including numeracy and literacy problems, are falling through the cracks.
There is real concern that unless action is taken urgently, the youth situation will become unsustainable, representing a threat to social cohesion and to future labour supply, even though young people historically eventually gain employment. Moreover, young people represent a valuable resource to the economy, business and society.

Some employers are biased against young people because of their perceived attitudes to work and because of stereotypes about the youth work ethic. Employers frequently express a preference for experienced workers citing young people’s lack of job readiness and absence of a work ethic.

Access to plain-English information about employee rights, qualifications, courses and career pathways is an issue for young people seeking or in work. Many young people would like to see an improvement in the accessibility of information and examples of on-the-job experiences. The quality of career’s advice is an issue for some young people.

What the Commission and others are doing
In 2011 the Commission released its publication “Breaking Through: Young People at Work”.²⁰ This guide provides practical advice to employers on how young people can be employed and presents the business case to encourage greater investment in young people and work.

The Commission continues to support the efforts of groups like the Mayors Taskforce for Jobs to advocate and promote youth employment. The Commission is also promoting the development of a national youth-to-work strategy that includes a plan for every young New Zealander.

Mayors around the country are working together to ensure young people in their communities make successful transitions from school to work, education or training. The Mayors Taskforce for Jobs established in 2000 proposes a model called “Youth Connections” that tracks all school leavers and connects them to opportunities within their own communities. The model is based on Local Authority boundaries and relies on community support and collaboration across central and local government agencies. The Taskforce recommends that a community consultation process take place in all Local Authorities so communities can determine the best way to provide for NEET and other at risk young people. The Taskforce also recommends the establishment of a National Call Centre and Youth Connections Local Authority Community Forums. Noting that youth unemployment has remained high and of concern over the last 20 years particularly in recent recessionary times, the Taskforce believes it is time for a new approach — one which is based on communication, ownership and responsibility for the well-being of their young people.

The Youth Transition Service (YTS) began in 2005 as a free service which assists young people into further education, training, work or other meaningful activities. By 2007 14 services were operating. Since then a number of other services have grown out of local needs but are not part of YTS.

In 2009 the Government announced its youth employment package spending $152 million to create work, education and training opportunities for unemployed youth. In all the Government announced nine programmes to be targeted at youth employment. A number of these are administered through Work and Income New Zealand. In 2011 some previous initiatives such as Community Max ceased, and funding redirected to a suite of new packages. This includes $17.2m for employers to employ and train young people in the aged care, horticulture, and agriculture sectors as well as other high demand industries, $13m to extend the Job Ops scheme which will now include training and $25m for the government’s Limited Services Volunteers scheme or “boot camp” as it has become known.

Across New Zealand there are numerous youth-to-work initiatives, incubator programmes and outstanding examples of regional good practice. For example, Otorohanga’s youth employment initiatives have immense community support and have resulted in zero youth unemployment. Many of these schemes have been developed by local government and supported by central government funding streams. Post-settlement iwi have a significant role to play in sustainable employment for young Māori, for example, Waikato-Tainui’s trade training partnership with Transpower.

Employers are also playing their part in encouraging and supporting young people. Appointees to advisory groups, graduate recruitment programmes, talent management and participation in job expos are some of the initiatives the Commission has been told about. A multitude of creative and innovative practices exist across New Zealand aiming to improve the employment prospects of young people.

However, many of these operate in isolation to one another underlining the need for a national programmatic approach to youth employment which ensures there is leverage off a broad knowledge base, that there is a way of transferring best practice and innovation, and consistency and continuity when something is working. Such an approach will need the involvement and support of parents, family, iwi, schools, the wider community, employers, trade unions, political parties, regional authorities, and youth services if it is to succeed.

Recommendation
A new approach is needed to ensure all young people reach their potential.

The Commission urgently recommends a national programmatic approach to youth employment initiatives and advocates:

A national youth-to-work strategy that includes a plan for every young New Zealander that has cross-party support and sufficient long-term funding security. The strategy must be responsive to the needs of Māori and Pacific youth as particularly vulnerable groups of young people, and address the barriers faced by disabled youth.