Fran O'Sullivan: It's high time the PM got serious on youth employment

Summits and taskforces not enough to tackle burning issue.

If I have one New Year's wish it is that John Key returns from his Hawaiian summer holiday brimming with enough determination to challenge the nation's employers - and himself - to tackle youth unemployment.

It is truly bizarre that the number of unfilled skilled jobs is increasing at the same time as we have record youth unemployment and many graduates find themselves working in jobs that don't pay them enough to get on top of student debt and have enough over to save for their futures.

They have been sold a pup.

Many have been brought up on a "follow your dream" diet only to find out too late that just following dreams doesn't always result in a job. An injection of realism is long overdue.

But that's no reason for the nation's leaders to shrug their collective shoulders and do nothing about the jobs deficit.

Key could start by cancelling the top personal tax break and "reinvesting" the hundreds of millions of dollars that would otherwise have gone into Bill English's Treasury coffers into a massive state-backed scheme to train young people in the skills needed for today's workforce. Then challenge private sector employers to match the taxpayer investment and complete the difficult and tedious work of completing the training of young people "on the job".

Oh, and throw in a bond to ensure the skills are used here (at least initially).

Call it a prime ministerial slush fund if you will. Or just the "Give them a fair go" campaign.

It's abundantly obvious from the squeals by business owners this week in Christchurch (and elsewhere) that New Zealand needs to tackle this challenge with some urgency. Employers are finding it difficult to fill labour gaps. Some complain that some of those turning up are just going through a tick-box effort to ensure their Winz cheques keep rolling on. If so, parents should step in and take some responsibility.

A lot of faith has been placed in government agency forecasts that employment will rebound when the rebuilding programme in earthquake-ravaged Christchurch steps up. There will certainly be many new jobs. But unless major companies like Fletcher Building are pushed to train more young people for an active role, the rebuilding is unlikely to address the overall skills shortage or the overall youth employment issue.

There have been suggestions that Key is planning a major announcement on employment. If so, it will be well-timed.

But the Prime Minister needs to be bold and courageous.

There are big gaps in the New Zealand workforce, many of which should be filled from within - not simply by bringing in more immigrants because this country's leaders still will not comprehensively tackle the necessity to invest in skills training. Or because talented New Zealanders and those "workers" with some get-up-and-go have done just that, because New Zealand pay rates are too low. Or because they don't have the necessary skills for the jobs on offer.

Or because - as with the dairy industry - farmers would rather import low-paid but highly skilled workers from the Philippines who will work long hours, rather than set up an optimum working environment for young Kiwis.

Two months ago I got a pasting from Herald readers when I said it was time the Prime Minister called another economic summit to focus on the alarming level of youth unemployment.

"Not another summit, please" was the general refrain. Many felt that another "John Key jobs summit" would simply amount to putting "lipstick on the pig" or building another cycleway (much the same thing really).

Point taken.

But the challenge hasn't gone away - in New Zealand or elsewhere.

In an article last month, headlined "An Economic Time Bomb: The World's Unemployed Youth", the Atlantic focused on the "lost generation" of young workers "facing a potentially explosive mix of growing inactivity and precarious work in the industrialised world along with high working poverty in developing countries".

The Atlantic cited the recent United Nations ILO report that more than 75 million people around the world between 15-24 are now out of work - an increase of four million since the global financial crisis began. The OECD talks about how long-term unemployment is associated with "elevated risks of poverty, ill-health, and school failure for the children of affected workers".

Okay, we "know this" - but as a nation what do we do about it?

In the European Union, one in five young people under 25 who is willing to work can't get a job. That's Europe's problem, but in fact the ratio is much higher in New Zealand.

Those who try to effect change here, like Cabinet minister Steven Joyce, face a backlash, such as from Auckland University's leaders when he said he wanted more engineers trained.

The academics bang on about academic freedom (more of that follow-your-dreams diet) but failure to prioritise funding of in-demand skills means our companies miss out on trained people and the cycle repeats itself.

At the very least Key could form a Prime Minister's taskforce on the issue.

But that would just be a baby step.

Debate on this article is now closed.

- NZ Herald

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Head of Business for NZME

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.

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