The next general election will be riveting. The opposition parties will be salivating over all the material they’ve been handed, which isn’t to say that the incumbent coalition won’t have a dossier of their own.
I’ve found myself wincing as I listen to the Prime Minister justifying the plan to means-test Jobseeker benefits for 18- and 19-year-olds against their parents’ incomes from November 2026. Recall, unemployed youth will only get the full Jobseeker benefit if their parents earn less than a measly $65,000.
The Christopher Luxon quote that stands out, and which I expect to see on billboards come election time, is “Nobody owes you a living”.
On one hand, I know this is true. But it’s not exactly compassionate conservatism, and I have these nagging questions in the back of my mind. Do young people on the benefit believe that the world owes them a living? Do they, or anyone want to be out of work and on a benefit?
For me, it feels like there’s an assumption these young people really do prefer the idea of sitting in front of the PlayStation at mum and/or dads in return for an after-tax $268 jobseeker benefit. That’s living high on the hog, that is.
Research shows pretty clearly that people don’t like being unemployed. When people lose their jobs, as an extra 16,000 did in the year ended June 30, they report the things you’d expect: worry and stress associated with their financial situation. But they also report feeling more isolated, loss of dignity and a sense of belonging. Work isn’t just about money, but also connection to other people, as well as meaning and structure to our lives. People don’t come to terms with long-term unemployment; the longer you’re unemployed the more unhappy you get.
In 1938, influential sociologist Paul Lazarsfeld published a review of the psychological effects of unemployment, reporting that “unemployment leads to increased instability in the unemployed and lowers their morale. Movie attendance is increased, and personal habits may be somewhat modified.”
Increased movie ticket sales aside, a 2025 meta-analysis of 327 studies conducted since 1990 finds general support for Lazarsfeld’s conclusions. Unemployment is bad for your health – effects are consistently negative, though small after you control for things like gender, age, location and other co-variates. Interestingly, studies tend to show statistically insignificant poorer physical health among unemployed people, even though they say they’re significantly less physically healthy than those in work: they feel less healthy than they objectively are.
Poorer mental health is the strongest negative health outcome associated with unemployment. Long-term unemployment means poorer general and mental health, and unemployed men show greater negative impacts than unemployed women.
Not everybody experiences all these negative effects, but the exceptions also make sense – if you lose a job that makes you unhappy, people tend to report at least temporary improvements in wellbeing.
Okay, so this doesn’t really tell us anything we couldn’t have anticipated. But these effects are particularly acute for younger people, and particularly during economically challenging times; 18-year-olds typically don’t have as many skills, so they’re last in line for a new job and first in line to be cut when someone needs to be cut.
Luxon is kind of right, then, that we don’t want young people jobless because the longer term effects are more problematic. Prolonged unemployment translates into lower confidence in dealing with a job market that’s lacking jobs, and it also means you miss out on those early years of earning that lay a foundation for greater financial security later in life.
Young people also lack the resilience of older people, including being less able to reframe the experience in ways that reduce the emotional consequences.
So, yeah. We want young people in work. Surely there are more compassionate, supportive and less blaming ways to do it.
