I have enough self-awareness to recognize that I am predisposed to view any socialist policy with a large dose of scepticism. Nonetheless, found myself more perplexed than ever when in their election campaign, Labour signalled that they would immediately begin raising the minimum wage at more than twice the rate of inflation and continue to do so until it exceeds $20/hr. At the same time, they set out a "Workplace Relations" policy that would enforce a National Awards rate of pay across industries, greatly reduce Employer's rights, and double the number of Labour Inspectors.
Each of these policies individually would likely have a detrimental effect on the unemployment rate (particularly youth unemployment) as businesses find the cost of hiring an inexperienced or un-skilled person have increased significantly and their options in situations where the employee isn't working out have been reduced. Combined into a single manifesto, it seemed to me that Labour would be staring down the barrel of massive youth unemployment. However, in their Fiscal Plan Labour said that they would:
* Target reducing New Zealand’s unemployment to 4% by backing apprenticeships, getting young people off the dole and Ready for Work, etc.
There was a huge incongruence there that I couldn't get my head around for a long time.
But, I've figured it out now... Chris Hipkins was holding both the silver bullet, and the weapon to fire it.
The weapon: Free Tertiary Education. No strings attached. Zero obligation. No requirement to actually attend lectures or learn anything.
The silver bullet: Increases to student allowances.
Now, anyone over 24 on the JobSeeker benefit $210pw can enrol in tertiary study free of charge and collect a student allowance of $267pw. That's a 27% payrise and it removes all obligation to attend WINZ meetings, or to actively be seeking employment. (Even if under 24, they'll still receive more than the dole)
This is a great incentive to "get young people off the dole" and is likely to help Labour achieve it's unemployment target, while simultaneously pricing young people out of the labour market.
It's going to be great. For a while...