Sunday, November 11, 2012

Megan Woods, Labour MP, on youth unemployment

Megan Woods, Labour MP, is all over radio and TV today talking about the burden on the state of young people on benefits:
The Labour Party is labelling New Zealand's youth unemployment situation a "crisis" and warns the social and financial cost will be felt for years to come. Latest numbers from Statistics New Zealand show the overall unemployment rate's risen to 7.3 percent - a 13 year high - but youth unemployment is much higher, at 25 percent. Labour's Youth Affairs spokesperson, Megan Woods, says the flow-on effects are felt in youth health and welfare pay-outs. “There is the financial burden on our welfare system when we have that many young people who are dependent on the state,” she says.
Labour is very fond of highlighting New Zealand's situation, and by implication National's failing, in isolation to the international recession. In any case, the burden on the state in respect of the unemployment benefit at least, has been reducing (see below).

This graph charts numbers on the unemployment benefit and the associated unemployment rates. Now I'm scratching my head as to the implications of it.

In September 2000 there were 38,500 unemployed 18-24 year-olds and 38,510 on the dole. An almost exact match. At that point under Labour everyone unemployed was on a benefit. But by the end of their term fewer people were getting the dole than were unemployed. This has continued to be the case.

By September 2012 there were 65,200 unemployed 18-24 year-olds but only 13,454 of them on the unemployment benefit.

There are a number of angles one could put on this. More unemployed young people are staying at home and relying on their parents? More are relying on friends?

Or perhaps more are relying on other benefits? In 2000 there were 31,932 on benefits other than the dole; by 2012 there were 41,427. That's what I'd expect given the overall rise in the size of that age group. So no answer there.

Is it possible that a number are supporting themselves via student allowances which had been trending up steeply between 2005 and 2010 (latest available) but have dropped out and are describing themselves as 'unemployed'?

Whatever the reasons are it's a bit silly for Labour to be complaining about the burden to the state of the unemployed when National has been successfully keeping large numbers out of the benefit system.

(My 18 year-old took his CV out to a large retail centre and went around asking for work. Got an interview later in the week as a result and accepted the job on Friday. Hope he hates it and returns to his studies next year:-)).

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