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The Forum > Article Comments > Youth unemployment: myths and hard realities > Comments

Youth unemployment: myths and hard realities : Comments

By Lucas Walsh, published 11/11/2009

In the current economic climate the pathways of young people to work are a priority.

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Young people's employment prospects are hardest hit by government interventions that regard something else as having higher priority: income tax, superannuation, GST, occupational licensing, minimum wages, compulsory insurance. All these imposed on-costs have consequences. The employer adds them all up and, only if an employee can bring in more than that, does he employ the marginal worker. Each additional on-cost counts most against the most marginal employee: those with least skills, experience, capital and income. Young people are represented in this group way out of proportion to their numbers in the population and thus are most adversely affected by interventionism in other areas of the economy.

Yet the interventionists responsible for brining in each of those policies see only the immediate benefit. It never occurs to them that they might have unintended consequences further down the line that are worse, from the interventionists' own point of view, than the original problem they were trying to solve.

Policies specifically intended to address youth unemployment cannot fix the problem; they can only make it worse; or worsen other important priorities.

It is easy to remedy the problem: abolish or at least suspend the income tax, the GST, the BAS, the minimum wage laws, occupational licensing, compulsory superannuation, and so on and on.

But if we are not willing to do that, then we need to have the honesty to say: youth unemployment is not a priority. We prefer to make our young people unemployed as the price at which other vested interests can enjoy privileges which government extorts from the rest of the population.
Posted by Peter Hume, Thursday, 12 November 2009 8:14:40 AM
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What Peter Hume really means.......

<<abolish or at least suspend the income tax, the GST, the BAS,>>
Government revenue collapses, hospitals, schools, colleges, police and fire stations close.

<<the minimum wage laws,>>
Wage rates collapse, consumption and spending collapse, businesses go bankrupt

<<occupational licensing,>>
Shonky builders, doctors, electricians etc kill thousands

<<compulsory superannuation>>
old people go back to eating dog food and freezing to death

<<Yet the interventionists responsible for bringing in each of those policies see only the immediate benefit. It never occurs to them that they might have unintended consequences further down the line that are worse, from the interventionists' own point of view, than the original problem they were trying to solve.>>

Am I the only one who sees the sad sad irony in this statement.
Posted by mikk, Friday, 13 November 2009 1:19:51 AM
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mikk

You are making the mistake of assuming, just because government provides a particular service, that it couldn't be provided in any other way. This makes for a circular argument, as the fact that government provides a service is then cited to prove that the service needs to be provided by government.

But if it's true that government is 'representative', and people really want the service, then why would the only way to provide it be by way of compulsory confiscation of the funds, and other compulsory measures? People really need food, so according to your logic, there should be a big government Department of Food to provide it, otherwise we would all starve to death.

Also, if it's true that people are too stupid or too greedy to provide the goods and services that they need, then how come the same people acting through government suddenly come into this super-human wisdom? You are applying a double standard.

Besides, didn't you recently say you are an anarchist? Re-discovered a love of authoritarianism after all, have you?
Posted by Peter Hume, Friday, 13 November 2009 9:51:48 AM
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Firstly where did anything I write have anything to do with authoritarianism. I was just pointing out the results of your ideas.
You didnt say my conclusions were wrong.

You are making the mistake of assuming that a non government provided service would be more efficient and beneficial to society. The proof of how wrong your theories are lies in every privatised industry across the country.
Private railways-failure.
Private tollways-failure.
Private airports-failure(at least from the customers perspective).
Private schools-well they are doing well but at the expense of the public system and its students.
Private healthcare-Only have to look to the US to see the massive failure there.
Private telecommunications- Telstra-FAILURE.
Private airlines-Singapore is a great airline compared to Qantas-Failure.

You can spout your marginalist theory all you like but the facts on the ground show how massive a failure neo liberal economics really are. If your theory does not match reality then you must admit the theory fails.
Posted by mikk, Friday, 13 November 2009 12:41:08 PM
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I agree with Peter.

The gov is always saying how it wants industry to take on apprentices, but they still charge payroll tax etc, which makes it costly to hire youngsters.

For the youngsters to get a job they often need experience which they can't get without a job. Thus giving the employers a tax holiday until they are say 20 would get them through the door.

I don't think anyone is proposing abolishing taxes altogether.
Posted by Shadow Minister, Friday, 13 November 2009 12:44:25 PM
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mikk
What criterion are you using to decide whether something is more efficient or socially beneficial?
Do you think there is any category of goods or services that should not be provided, or any area of human action that should not be controlled by government,and if so, what?
Do you think there should be any limitations on government power, and if so, what?
Do you think that hospitals, schools, colleges, police and fire stations would cease to exist if people had to pay for their service voluntarily? If so, why? Do you think people don't want these things?
You are authoritarian to the extent you think that authority is needed to provide goods and services.
The only way your argument about efficiency and social benefit makes sense is if we assume that socialism is capable of making sense in terms of efficiency and social benefit.
Posted by Peter Hume, Sunday, 15 November 2009 5:59:41 PM
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