Australia's Youths Hanker for Jobs

High jobless rate hurts prime minister in polls, opposition parties move in with remedies

MARCELLA BELCASTRO of Baulkham Hills, a Sydney suburb, has been looking for full-time employment for the past eight months.

"At the moment I've given up," says the discouraged 18-year-old, who had hoped to become a secretary.

Ms. Belcastro is not alone. Youth unemployment has now become one of Australia's most pressing problems. According to the June employment statistics, the full-time unemployment rate for the 15- to 24-year-old age group is 19 percent. Some politicians have warned that a high rate of youth joblessness could lead to riots similar to those in Los Angeles this year. `Training wage' proposed

The problem of youth unemployment has become so pressing that Prime Minister Paul Keating is holding a Youth Jobs Summit tomorrow in Canberra. At the summit, Mr. Keating is expected to introduce a "training wage," which will substantially undercut national union wages and will provide more funding for vocational training.

"How do we help to get [youths] training so that they are not caught in the dead-end job, in the dead-end street of life and work," Keating says. "That's what I'm focusing on."

Along with high unemployment rates for youths, Australia faces high overall unemployment. The government reported July 9 that the June unemployment rate was 11.1 percent, up from 10.6 percent in May.

Keating will be in trouble in elections next year if he does not reduce the unemployment rate, observers say. A poll conducted for the Australian newspaper after the June unemployment figures were released showed voter dissatisfaction with Keating reaching 68 percent. He trails 6 points behind opposition Liberal Party leader John Hewson as the preferred prime minister.

"In political terms the unemployment rate is one of the key factors in deciding the next election," says Bill Mansfield, assistant secretary of the Australia Council of Trade Unions (ACTU) in Melbourne.

To fund job training and work projects, the ACTU has suggested increasing the maximum tax rate on the most wealthy from 47 percent to 49 percent.

"Our position is not one that the government ought to increase taxes in principle," Mr. Mansfield says. "As a general rule, tax increases are not desirable, but we have a particular problem of more assistance for the unemployed." Keating has ruled out a tax hike before the election.

The ACTU also says it will accept a two-year wage freeze after workers receive a 1.5 percent, or $10 (Australian; US$7.50), per-week increase next month.

And the ACTU is pressing the government to defer the reduction of tariffs on clothing, textiles, and quality footwear. The Australian textile industry maintains it cannot compete with foreign textile mills and will have to shut down many factories if tariffs are reduced from the current level of 46 percent. This will particularly effect the state of Victoria where the unemployment rate is now 11.9 percent. The government rejects a deferment.

To preempt the Labor Party's youth job summit, the Liberal Party held its own jobs summit July 4-5 in Sydney. At the meeting, Mr. Hewson suggested a more stratified training wage: 15- to 17-year-olds would receive $3 per hour or $114 per week, and 18- to 20-year-olds would receive $133 per week. Under the current system, a 17-year-old is paid $211 to $247 per week in a retail or clerical job.

"I believe that is the single most important way to give our young people a chance of getting a job," Hewson says. Mixed response to wage

The Hewson wage idea is welcomed by business leaders.

"Employers hire young people in greater numbers than they otherwise have where they have been able to pay a youth wage," says Ian Spicer, chief executive of the Confederation of Australian Industry, a trade group.

But the low wage is unpopular with teens and groups that represent youths. "The $3 per hour wage is grossly inequitable and exploitative," says Martin Attridge of the Australian Youth Policy and Action Coalition (AYPAC), an advocacy group.

"It's not a good idea," agrees Belcastro, who now makes $7 per hour working part-time at a delicatessen. Cartoonists portray the wage as "slave labor."

Instead, AYPAC is proposing the government spend $2 billion on an "emergency jobs program" to fund 239,000 positions, add funding for an additional 50,000 places at the nation's Technical and Further Education schools, and expedite capital works projects. Limited budget

The options for the prime minister, however, will be relatively limited. Because of the high unemployment, government tax revenues are falling. The budget deficit for the 1992-93 financial year is now expected to be $13.5 billion.

At the same time, the government has been pushing interest rates down to try to stimulate the economy. There is some indication the lower rates are moving the economy ahead somewhat. The amount of overtime worked is now rising, a sign of recovery, and a recent survey of business expectations released shows business confidence improving.

These positive changes may not lower the unemployment rate fast enough for Keating, who says he realizes employment lags in a recovery. Keating admits it will be difficult to find jobs for people "who are not trained, haven't stayed in schools, and don't have job prospects."

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