New labour force data from the ABS yesterday showed that Queensland ended 2015 with solid employment growth, and with the unemployment rate falling slightly further to 5.8 per cent, as the Queensland economy remains resilient at the end of the mining boom (see charts below). However, as the Courier-Mail has pointed out this morning, the good news at the macro level should not distract us from high rates of youth unemployment, particularly in regional areas such as Cairns and Townsville.
While youth unemployment is expected to be higher than prime-age unemployment, due to the lower skill levels and years of experience of young people, I suspect that a significant part of youth unemployment is due to policy settings that mean that many young people are priced out of the labour market. I am referring, of course, to minimum wage and penalty rates. At a minimum, the Productivity Commission’s recommendations regarding the alignment of Saturday and Sunday penalty rates should be adopted, which would no doubt boost employment in hospitality, a major employer of young people. See my post from March last year:
As former Treasury Secretary Ted Evans once famously said, in a sense, we choose the level of unemployment we have. Unfortunately, political considerations get in the way of economic policy changes that would significantly boost job opportunities.