Forever Young… And In Debt

Young people in Australia have experienced some tough times during the last several years.

As with other OECD countries, they were immediately and disproportionately affected by the global financial crisis. Though not as bad as countries such as Spain and Greece, young people today experience unemployment levels at two or three times the overall working population depending on where they live. And now they face a suite of transformative federal policy proposals to ‘earn or learn’.

With key policy yet to make its way through parliament, we can only speculate about what forms it will eventually take.

What we can expect, however, is a shift of the burden of debt from the state to young people. And in the stroke of a policy pen, it could extend markers of transition of “youth” to “adulthood” to the age of 30, with serious consequences.

With changes to Newstart potentially compelling Australians under 30 to wait six months before receiving unemployment assistance, many young people face poor work prospects.

For teenagers in particular, the labour market is characterised by high levels of casual work, under-employment and unemployment.

Those looking for work will depend heavily on family and non-government support while they seek jobs. They will need money to live, to get to interviews, to dress appropriately and other necessities for getting a job.

Generally treating people under the age of 30 as a homogenous group (or for Treasurer Hockey, two groups: “lifters” and “leaners”) is problematic.

Year on year, the data confirms that young people in certain circumstances face particularly high risks of being marginalised from earning and learning, such as those who live in regional and remote areas, and those who leave school early.

Those not learning are expected to travel to work. Employment Minister Eric Abetz has suggested that young people not in training or study could go picking fruit in Tasmania.

Implicit in this is an expectation that young people have the capacity to leave valuable local support networks to get low-paying work in seasonal markets.

Those in regional and remote communities will face particular challenges already in finding work. Removing support may exacerbate these.

For those lucky enough to get a job, the odds are that it will be casual or part-time work. A fifth of all casual workers are aged 15-19 and the prevalence of casual work for this age group has increased significantly since 2001.

A substantial proportion won’t get enough work – last year, around a third of part-time workers aged 15 to 19-year-old had insufficient work for a year or more.

For those on the dole, Social Services Minister Kevin Andrews recently offered a reprieve of sorts.

Newstart Allowance will not be cancelled for over 100,000 dole recipients under the age of 30 next year as initially suggested.

Instead, recipients will have the option of working for the dole if they work for 25 hours per week for welfare.

For those young people, a preoccupation with “busy-work” in such programs could result in them spending less time looking for a real job, as has been the case in work for the dole schemes in the US and previously in this country.

Many choosing to learn will start their post-school life in debt.

Recent estimates suggest fee hikes to higher education degrees ranging from 20 per cent to over 100 per cent, depending on the degree, the private benefits accrued post-study and level of international demand.

A significant proportion of a generation will enter the workforce in debt, having gambled on choosing a profession in an ever-changing job-market in which a “career” scarcely resembles what it did 20 years ago.

Those who need to reskill in future, such as those in automotive manufacturing, will face dual challenges of unemployment without benefits and the added debt of additional training.

Related to this point, Education Minister Pyne does not wish to see higher education go the way of car manufacturing as globally uncompetitive because of regulation.

This proposition implies that universities are somehow comparable to industry, and devalues their role as a public good and foundational basis of Australia’s social and economic infrastructure.

Trainees will also be affected by the proposal to introduce concessional trade support loans of up to $20,000 over a four-year apprenticeship.

Those currently in apprenticeships won’t have to wait: with the slashing of Tools For Your Trade this week, apprentices no longer receive financial assistance for their tools.

They instead have the Trade Support Loans Programme. This measure will apparently save the government $914.6 million over four years, but for apprentices, loan repayments may take longer.

Last week, Minister Andrews expressed interest in “incorporating income management as part of a package of support services available to job seekers”.

It has been recommended that the government should be able to determine how welfare benefits are spent by recipients.

This is to prevent young people from frittering their dole on non-necessities, such as alcohol.

Putting the intention aside, this is a perplexing message from a government that espouses personal responsibility on one hand, while apparently threatening to wield the hand of a nanny state on the other. 

These policies shift debt from the government’s budget books onto the young. They favour those who are already wealthy and can rely on support networks, such as family. They infantilise young people by stretching out the definition of youth to the age of 30.

In so doing, these policies propose a perverse experiment in social engineering, in which the government may save a few dollars now, but at the risk of great costs to us all later.

For some, it may seem like they are 19 forever, but their experience of “youth” could be very different from previous generations.

Associate Professor Lucas Walsh is Associate Dean (Berwick) in The Faculty of Education at Monash University.