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Former ACTU official comments on the differences between job training and job creation versus youth rates as a solution to youth unemployment

PETER THOMPSON: Well, the Federal Government isn't standing flat footed on the idea of a youth wage. The architect of a yet to be released government plan to revive the youth job market is the former ACTU official, Laurie Carmichael. Mr Carmichael has also proposed a youth training wage where employers pay lower wages to young workers where some of their week is spent on training. Laurie Carmichael joins us to speak to David Pembroke.

DAVID PEMBROKE: Mr Carmichael, do you agree that lower wages will help stimulate youth employment?

LAURIE CARMICHAEL: I don't think it's a matter of low wages creating jobs. The report of my counsel which is made up of a number of employer representatives, union representatives, and educationalists, unanimously concluded that we need to create training positions for young people and that those training positions aim to provide quite clearly defined outcomes in terms of education and training levels.

DAVID PEMBROKE: Isn't that a medium-term strategy rather than what would appear to be a short-term strategy: lower wages stimulate youth employment?

LAURIE CARMICHAEL: Well, I don't think that the jobs that used to be there are there any more. For example, at the time when the micro processor chip was invented in 1972, General Motors in this country employed somewhere between 21,000 to 23,000 people. Today, they employ 6,000; and there is no way that that's going to be solved by a simplistic approach on wages alone. What we have to do is to create training positions, and that requires the education and training authority working with industry so that people who are coming into the work force are equipped for the labour market that is now there and emerging. It's not just a matter of jobs alone because, quite frankly, those jobs that used to be there are not coming back. But there are jobs if the recovery brings new jobs into position and that's what's essential here; that is, that there is genuinely a recovery. If recovery brings new jobs into the position, then people need to be trained for those new jobs and it's not just a matter of training at the lowest possible level. This really requires a comprehensive and exhaustive approach that will embrace people for the future labour market.

DAVID PEMBROKE: Do you think it's a legitimate fear that older workers may be replaced by the cheaper, younger workers?

LAURIE CARMICHAEL: That's fairly universally held across the board, but the older workers who do have the most advanced skills are certainly the ones that are the most protected in the market. The problem will be that if young people are not trained adequately for the advanced skills, then they're going to be either in and out of work, or out of work for long periods of time, and no amount of low wages at the beginning is going to solve their problem at all.

DAVID PEMBROKE: Okay. Mr Carmichael, thanks very much.