More young people out of work in city

The Press tells us,

Youth unemployment has soared in Christchurch, despite nearly 9000 young people leaving the city last year.

The Education Ministry has proposed building stronger relationships between schools and tertiary providers to halt the worrying trend, saying the situation can not be allowed to continue.

The number of Cantabrians aged 15 to 24 in employment has dropped by 12,300, the September 2011 Household Labour Force Survey revealed.

The fall comes despite 8700 people in the age bracket leaving the city last year.

The draft Education Renewal document, issued by the ministry, stressed encouraging pupils to explore vocations at school to ease the transition between education and work.

"The period has seen a fall in the youth population, increased disengagement from the labour market and a sharp reduction in the number of young people in employment," it said.

"Industries such as tourism and hospitality that have traditionally employed unskilled labour have been hit hard by the earthquakes and will take years to recover."

This may well be true, but it may not be the only problem. An obvious question to ask is what effect is the minimum wage having on the employment opportunities for young people? Employers are not likely to offer jobs if the cost of employing low skilled workers is too high. If you combine a decrease in demand, even with a decrease in supply, with a wage above equilibrium then an excess supply of labour is not that surprising.