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G20 must be creative on jobs for sake of youth

By Oliver Theobald - posted Wednesday, 20 June 2012

Jobs have long been a safe lobbying point for politicians but expectations have been high coming into this year's G20 Summit to be held in Los Cabos, Mexico.

The world is in the midst of a severe unemployment problem following the Global Financial Crisis but it is young people who have been hit hardest by the downturn. According to ILO and OECD estimates youth unemployment rates are now double and up to triple the rate of adult unemployment in most G20 countries.

The ILO clarifies that young people were among the first to lose their jobs in the downturn and job opportunities have been scarce for new young job entrants. Persistent youth unemployment also has a devastating effect on the confidence of young people and social stability.


Trade unions and other lobbying groups have been successful in lobbying governments to focus on unemployment issues. Momentum on job creation at the official level though has been interrupted and at times quelled by the burgeoning sovereign debt crisis in Europe and the expansion of austerity measures.

As job creation returns to the forefront of international attention, numerous countries have voiced their intention to underwrite global growth through job creation. Australia sits unequivocally in the job creation bandwagon.

Australia's unemployment rate has remained defiantly stable in the wake of the worst financial crisis since the 1930s but teenage unemployment has jumped from 13.6 per cent in December 2008 to 17.3 per cent as of December 2011. The number of those aged 15-19 and employed in the retail sector has fallen from 239,100 in 2008 to 215,500 in 2011, and in the construction sector there has been a fall from 68,700 to 59,300.

Treasurer Wayne Swan has already announced job creation to be at the forefront of Australia's efforts to secure global economic stability at this year's G20 Summit. However, there has been no disclosure on what initiatives Australia will support in advancing job creation. It is therefore reasonable to ask how Australia intends to solve the crisis?

Trade unions are calling for fiscal stimulus, green jobs, skills training and even the introduction of a 'Robin Hood' financial transactions tax.

Wayne Swan has already ruled out the possibility of a financial transactions tax as the tax would raise the cost of capital and hurt Australian businesses.


Fiscal stimulus also seems unlikely considering the Government's determination to maintain budget surpluses.

Are green jobs the answer? Momentum behind green jobs has been growing but last year's flop of G20 support behind the carbon tax will play in the minds of green growth advocates. Green jobs are also not a short-term solution according to Sinclair Davidson, a Professor at RMIT's School of Economics, Finance and Marketing.

Davidson is sceptical that green jobs can add value to the economy and advocates instead for labour market deregulation to legalise shorter working hours for young employees. According to Davidson, this would encourage employers to hire young employees while also providing vital work experience and skills for young people. Labour deregulation though seems an unlikely prospect under a Labour Government that stands firm on worker rights.

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About the Author

Oliver Theobald is a graduate of the Johns Hopkins Nanjing Center and a Prime Minister’s Asia Endeavour Award recipient. He currently works as the Relationship Manager with the Australian Chamber of Commerce Beijing and is a Co-founder of Asia Options.

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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