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.