Magazine of the Socialist Party, Australian section of the CWI

Young people hit hardest by capitalist crisis

Fight their system – Demand our future!

As the world economic crisis gets worse, anger continues to grow as the gap between rich and poor continues to widen. The 1% who own and control the vast bulk of society’s resources are continuing to rake in enormous profits at the expense of the 99% who are struggling to make ends meet.

The international trend in response to this crisis has been to bail out the rich with taxpayer money, while ordinary people have had to suffer cuts, job losses and increases to our cost of living.

Young people have been some of the hardest hit. From the 2.1 million homeless youth in America, to the 46.2% of youth who are unemployed in Spain, it is no wonder that mass movements have erupted in many parts of the world demanding social change.

By Mel Gregson, Socialist Party

While Australia has so far averted the worst of the crisis, there has been an impact especially on the jobs front. Further to this the effects of the downturn have disproportionally affected young people.

The number of young people unable to work or a place in education peaked at the onset of the crisis and has yet to recover. The youth unemployment rate remains much higher than for adults, and with an estimated 200,000 jobs losses in the retail sector by the end of 2012, many more young people will find themselves jobless soon enough.

The number of school leavers not fully engaged in education or work remains higher than at any time during the last 20 years. Those who have managed to find employment struggle with insecure working conditions, low wages and a rising cost of living. Those lucky enough to secure a place in higher education suffer from ever-increasing tuition fees, which even when deferred represent an enormous debt burden that can take decades to overcome.

The pathway of schooling to higher education to a secure job to eventual home-ownership has become an unattainable dream for this generation. The idea that if you work hard you can get ahead does not ring true for those studying full time, working long hours and still failing to make ends meet.

Frustration at the lack of opportunities is demonstrated with over 40% of young people in Australia feeling that they have very little or only some control over their life. This is no surprise, considering young people have no genuine representation in political and economic life. To make matters worse the vast bulk of student unions and trade unions have failed to fight for the interests of students and young workers.

The problems faced by young people, and indeed by all ordinary people, are not temporary or a diversion from the status quo. The problems come part and parcel with a system that puts profits before else.

In order to provide a decent future for young people we need to come together and fight against all the attacks on our living conditions. We need to campaign for better access to education, housing and transport, as well as struggle for better wages and conditions at work.

At the same time we need to link this fight for reforms to the fight for system change. We need a society where the right to decent education, secure employment and a safe climate is prioritised over the profit interests of the 1%.

Employment

Youth unemployment (15- 19 year olds not fully engaged in work or study) stands at around 18%. This is over three times higher than the unemployment rate across the whole of the population, and does not include those looking for work whilst studying.

Some regions are particularly impacted by youth unemployment, with areas such as the outer eastern parts of Melbourne, the western suburbs of Adelaide and the Central Coast of NSW experiencing youth unemployment rates of well over 30%!

One of the reasons youth unemployment has risen is due to substantive job losses in the retail sector, one of the main employers of young people. Since the onset of the global financial crisis, the retail sector has placed the full burden of reduced sales onto their workforce. Instead of accepting slightly reduced profit margins, retail bosses have slashed almost 100,000 full-time jobs. Because many young people are employed as casuals, they are the easiest to get rid of.

By employing young workers as casuals on youth wages, then sacking them when sales dip, the retail industry has increased its profits by 67.4 per cent over the last 5 years, while wages have barely kept up with inflation.

Not yet satisfied, the National Retail Association has now proposed reducing the retail minimum wage by 10%, scrapping penalty rates for nights and Saturdays, reducing penalty rates on Sundays and cutting the minimum shift to one hour!

This push by big business is obviously not good for young people, but it is also not good for the economy. Poor retail sales reflect the financial stress many people are feeling due to the rising cost of living. These problems will only worsen with the introduction of further job insecurity and wage reductions, as people will be less willing and less able to spend money on consumer goods.

One of the reasons why bosses see young people as an easy target is because only around 1 in 10 young workers are members of their trades union. It is difficult to fight back when you are on your own. However, a mass fighting union of young workers across the retail, hospitality and fast food industries, taking up the issues of casualisation and youth wages could win important reforms and improve conditions for young workers. But the situation will not improve until young workers get organised!

Another problem that contributes to youth unemployment is difficulty in getting the right training. Not everyone is interested in going to university. Many would rather get their hands dirty with an apprenticeship. The problem is that it is getting harder to find employers willing to take on an apprentice.

There a now fewer teenagers beginning apprenticeships than in 2008, despite more young people wanting to take this route to employment. The problem is that the choice to take on and train an apprentice is made by a private business. This is more-so the case than ever before, and in part, a direct result of the privatisation of public assets.

On the basis of publically owned industries, such as transport, manufacturing, utilities, mining and construction, you could begin to provide high-quality vocational training as part of an integrated education system. These public assets could be used to train apprentices in socially necessary skills and provide them with jobs to ensure the quality of public services and infrastructure into the future.

The Socialist Party stands for:

-A guaranteed right to a job or training with decent wages and full work rights.
-A minimum wage of $25 an hour and a 35 hour week with no loss of pay to share out available work.
-All workers to be entitled to employment protection, sick pay and holiday pay.
-Entitlement to paid maternity and paternity leave.
-No youth wages. Equal pay for equal work.
-Decent welfare payments linked to average earnings for the unemployed, elderly, students and those unable to work.

Education

While most people believe education is a human right that should be afforded to all, it is becoming much less affordable in Australia.

With the widespread privitisation of pre-school education, the enormous favouring of private schools over public schools by governments, and the exorbitant fees charged by public universities, education is far from ‘free’.

For example, many private schools receive more government funding than public schools. Geelong Grammar, the most expensive school in Australia, received $4195 per student and total federal funding of $4.8 million in 2011 alone. By contrast Australia’s most disadvantaged schools, which rely purely on government funding, receive less than $1000 per student. This is despite the fact that more than two-thirds of Australian’s are educated in public schools, which face a dire lack of resources.

This inequality in funding (whereby the richest private school students receive the most public funding) results in an inequality in education quality. Private school students are much more likely to go on to tertiary education than students from the malnourished public school system.

Surveys show a majority of Australians believe that access to higher education has become more difficult compared to the situation 10 years ago. It is especially difficult for students from poorer families and for those from remote and regional areas. By contrast, access to university has become easier for those wealthy enough to pay.

The lack of accessibility to tertiary education is largely due to higher tuition fees, escalating costs of living (especially housing/rent) and the difficulty in accessing income support whilst studying (not to mention the meager amount even if you get a Centrelink payment!).

Whilst tertiary education used to be free, this is no longer the case. Since students began to have to pay the cost of their education, around 50 per cent of Australians believe the main focus of universities is to operate as a business. This is compared to only 39 per cent of Australians who see universities as being mainly concerned with providing students with an education!

The increasing ‘business model’ approach to providing education has meant higher course fees, underpaid and overworked teaching staff, and millions of dollars of students’ money being wasted on competitive advertising and managerial salaries as high as $1 million a year! More and more time is spent on luring in super-exploited international students, rather than focusing on providing quality education.

Many supporters of the ‘user-pays’ business model claim it’s only fair that students pay their own fees, regardless of what universities choose to charge. However, this is not what ordinary people think. The public believes that the decline in public funding for universities has gone too far, and that there should be a greater government commitment.

The main beneficiaries of higher education are employers. They are the ones who profit off our skills. If for example they were taxed at a higher rate education could easily be made free.

Public support for more government funding for universities remains even when the alternative option is tax cuts. Around 70% of people think the government should spend more on university education to make it more accessible.

Australian students already pay a much higher proportion of the cost of their education than in many other countries. Students need to campaign to oppose the continuing privitatisation of education, as well as demand more public funding and more public control of our entire education system. The public is already on side!

The Socialist Party stands for:

-Free quality education for all from childcare to university.
-An end to the public subsidising of private schools.
-Secure work and decent pay for teaching staff at all levels of education.
-Income support for students that covers the real cost of living.

Housing

On top of increasing education costs and low wages, young people are also suffering from the housing affordability crisis.

Young people today are staying at home longer than ever before. 80% of young people remain in the parental home at least until they are 24 years of age. One in four people aged 20–34 can’t afford to live independently of their parents.

The average rental property is often out of reach for low income earners or those in full-time study. Figures from the Tenants Union of Victoria show that the average rental property often consumes more than 30% of household income. This is often much higher for young people. Some households are spending up to half their income on rent!

Many young people face the choice of either paying unaffordable rents or forgoing basic necessities. Many are forced to rent substandard or insecure forms housing as a result.

Of course it is the disadvantaged that suffer the most as Australia’s housing crisis gets worse. 41,000 people in Victoria alone are on the public housing waiting list. The average waiting time is 4 years but some have waited up to 18 years in some circumstances. The longest wait on record for an individual was an appalling 226 months – just under 19 years!

Yet instead of building more public housing to meet demand, governments are continuing the trend of privitising public housing assets!

Housing that is being built by private developers is designed to maximise their profits. They therefore prefer to cater to higher income earners and international student accommodation – where exorbitant rents can be charged.

The Socialist Party stands for:

-Massive investment into public housing to reduce the waiting lists and create jobs.
-Resident control of housing estates to ensure the adequate provision of homes and services.
-Legislation to cap private rents at 20% of income and ensure landlords provide quality, safe accommodation.
-Putting a stop to gambling on the housing market. End negative gearing and other forms of speculation.
-Affordable housing for all as a basic right.

Transport

A further burden on young people is the high cost and poor performance of the public transport system. Ever increasing ticket prices, constant lateness and cancellations, and lack of service to the outer suburbs make using public transport a nightmare for the many young people who rely on it to get to school or work.

Also, the high price of petrol and parking, as well as increased concern about carbon emissions, means many more young people would use public transport if it were cheap and convenient.

We need more services to accommodate the growing number of people who would be willing to switch to public transport. The city loop in Victoria is only running at a capacity of 80% at the current time; without even building any more tracks we could increase the numbers of trains and make improvements immediately!

We do however need more than simply more trains on the tracks to accommodate for people in the outer suburbs and rural areas. Serious investment in public transport infrastructure is required in these areas in order for it to be a real and reliable option for people.

The main barrier to these changes being implemented is the privatisation of public transport. Since privatisation in 1997, the price of public transport in Victoria has tripled, yet no substantial improvement to the system has been made. This shows that profit is more important to these private companies than providing a decent service.

It has been estimated that the selling off of Melbourne’s public transport system has cost taxpayers over $2 billion more than if the system had of remained in public hands. All this for a system that we do not control!

According to The Age, it would cost about $340 million to run the public transport system for free annually. Metro was paid $3.8 billion in 2009 for their 8 year contract (not including ticket sales)!

If we eliminated the profit motive by bringing the public transport system into public ownership we could redirect these funds into improving the system and making it free. At the same time we could create thousands of well paying jobs and by offering people an alternative to cars we could go someway towards addressing the problem of climate change.

The Socialist Party stands for:

-For a free, frequent and fully integrated 24 hour public transport system as an alternative to cars.
-An end to the privatisation of public services and public private partnerships.

Our future

It is clear that all of these problems are not isolated. The connecting thread is the fact that private profits, the commercial interests of a tiny minority, are being put before the needs of the population. Young people in this scenario are the worst affected.

The future for young people will be determined by whether or not we are prepared to put up with this situation.

If we are to have any hope of a future, we need to challenge the current system that puts profits before people and the environment. It is in the interests of ordinary people to have a stake in the way society is run. Under capitalism, most of the important decisions about how we live our lives are left in the hands of profiteers.

At the moment ordinary people do not get to decide what is produced, how it is produced or by whom. It is clear that we cannot leave our fate in their hands, whether on the question of education, housing, jobs, transport or the environment they are making things much worse.

The alternative to the chaos and callousness of capitalism is a system that is based on human need and not private profit. On the basis of public ownership, democratic control and a sustainable plan of production a socialist economy could easily provide jobs, homes and services to all while at the same time protecting the environment.

This is the type of future we should be fighting for.