A fanfare was made yesterday about a further $55 million available to subsidise young people into jobs or training.
It is unpopular to argue against this initiative but I will.
1/ Primarily any subsidy distorts the labour market. As do legislated minimum wages. The first assists the employer and the second penalises. I am surprised the anti-capitalist Greens aren't arguing against the (0n-going) subsidy. Sue Bradford used to rightly argue against WFF on the basis that it subsidises employers.
2/ Subsidies favour one and punish another. The potential worker who attracts the subsidy takes opportunity away from the potential worker who doesn't. Probably an older Maori or Pacific worker with greater financial committments than the young person.
3/ There are around 64,000 (15-24) young people officially unemployed. 1,000 subsidised positions tackles only a small percentage. It is an inefficient use of taxpayer's money to solve the problem of youth unemployment.
4/ What 'can't be seen' is as usual ignored. That $55 million is taken from taxpayers who might have used it to invest in their own economically constructive ways.
5/ Yes. If youth are going to be paid the dole it is better to get something for the money. Which simply avoids debating whether or not youth should even be paid the dole having contributed nothing to the economy thus far. Why shouldn't they remain the responsibility of their parents? Afterall, their parental income is relative when it comes to qualifying for a student allowance. Why isn't the same criteria applied to the unemployment benefit?
6/ Some employers will abuse the subsidy, especially when the government demands they pay inexperienced workers a minimum rate. The criteria that jobs must be "opportunities that wouldn't exist if the Job Ops subsidy wasn't available" is a test easily met.
7/ Industries that can only employ skilled workers are disadvantaged.
8/ There is inherent unfairness in expecting one young person to pay for their own skills acquisition and subsidising the next.
9/ Subsidies should be no part of a policy programme run by a free enterprise party.If they are wrong in principle then ...they are wrong. Sneaking them in here and there to look like they are 'doing something' is an abrogation of their responsibility to introduce better policy. Like low flat tax and labour market regulation reduction. Typically National.
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"Which simply avoids debating whether or not youth should even be paid the dole having contributed nothing to the economy thus far. Why shouldn't they remain the responsibility of their parents?"
Exactly!!!
It is time to abolish the minimum wage and allow youth rates. There are alreday children doing paper runs (as one example) who are not paid the minimum wage.
The youth wage rate was abolished. Youth unemployment sky-rocketed to over 16% and much higher for Pacifica and Maori youth. The government now pays a $5,000 subsidy to employers of youth and over $100 million in various schemes.
The net effect is that the cost of employing youth to employers is about the same as the old youth rate but the cost to the country adds to the public debt burdern.
(5) is especially important.
The non-discriminatory welfare state is changing human behaviour. Parents are no longer so strongly motivated to ensure that their children become independently functioning adults. Inevitably, civility and the work ethic are in decline.
More socialist nonsense from National. Although it transpires that Brash thinks that fighting over shares of the booty is more important than stopping the parasitism - just another pointless side-show then.
It is time to abolish the minimum wage and allow youth rates
It's time to abolish all regulation of the labour market, including minimum and youth rates; unions; the holidays act; and the Employment Relationships Act.
The simply principle: "its the employer's money and the employer's company" is more than enough to govern employment relationship. This is ACT party policy, it's in the 2025 taskforce report, and will be enacted as part of the Brash emergency budget in November.
Ideally no-one should ever be "paid" the dole or any other benefit - but the 25% reduction in benefits that again is going to be part of the emergency budget after the election is at least getting a quarter of the way there.
This type of subsidy increases further the involvement of Government in our lives and will probably involve a spinoff through shady management trusts resulting in an illusory impact on Youth Unemployment. Allowing Youth Rates would allow Private Enterprise to achieve better and fairer results without Government involvement or expense. So logical I can only surmise that the reason the Government favours the bureaucratic Socialist option is because of their Dislike for Roger Douglas who advocates Youth Rates loudly and often.
"Afterall, their parental income is relative when it comes to qualifying for a student allowance. Why isn't the same criteria applied to the unemployment benefit?"
Why isn't the same crietia applied to the DPB?
And why isn't the complementay criteria used for super?
The simple fact is NZ can no longer afford any of this malarkey.
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