Reducing the Cost of Youth Marginalization

The following proposal by Dr Carol Schultz represents value for money for reducing the problem of youth marginalization in Australia. To illustrate the cost of youth marginalization, the researcher has applied the cost of youth disengagement figures disclosed by researchers – Lamb, S. & Huo, S. from the Mitchell Institute. The figures used are the fiscal (loss of taxes (Local, State and Federal) over a lifetime of work = $8400 per person/per year) and social costs (increased costs for health, crime and welfare for those not engaged in work or education = $15400 per person/year) of youth disengagement for 19 year olds as stated by Lamb and Huo. In applying these figures to the Victorian State School exclusion example – thus using figures for 2016 from the “Investigation into School Exclusions Report” – the fiscal loss and social costs to the Victorian community for the 278 students who were excluded are:

Fiscal loss = $8400 X 278 =  $ 2 335 200 per year for this 2016 group of excluded students

Social cost = $15400 x 278 = $4 281 200 per year for this 2016 group of excluded students

Total fiscal loss and social cost = $6 616 400 per year for this 2016 group of excluded students

This total fiscal loss and social cost is for each year of the lifespan for this 2016 group of students (who were excluded from Victorian State education). These figures are a conservative estimate of the Fiscal loss and social costs to the government (local, state and federal) and the Australian community. Without a response to this problem, these figures will only get worse.

The Victorian Government (2017) has pledged a contribution of $5.9 million to this problem however this amount does not cover the future (presuming these 278 students do not reengage in education or employment in their lifetime) fiscal loss and social costs of disengagement for those who, in 2016 were excluded from the Victorian Education system.

The following equations illustrate the fiscal and social costs for those students excluded from education in Victoria in 2016 over their lifetime. (Examples that follow use figures for Victorian exclusion as the figures for exclusion are not readily available for other States and the Victorian figures are indicative of exclusion figures for other Australian States or Territories.) If the exclusion figures remain the same as in the Victorian example – 2016 (278 exclusions) over the next twenty years, there will be (in total) 5560 students excluded from Victorian schools and assuming these figures are indicative of other states there will be approximately 33 360 students excluded from public schools throughout Australia. Without (evidence-based) intervention the fiscal loss and social cost to the Australian community per year for these excluded students will be:

 33 360 X 8400 =  280 224 000 (fiscal loss) for the 33 360 students per year

33 360 x 15400 = 513 744 000 (social cost) for the 33 360 students per year

Total (fiscal loss and social cost) to the Australian Community per year for the lifespan of the 33 360 students projected to be excluded from Australian schools over the next twenty years

= $793 968 000 per year

Dr Carol Schultz through her research proposes Models and recommendations that address youth marginalization. At the very least, if the Models and recommendations proposed reduce the current projected school exclusion figure for the next twenty years by 20% per year (20% of 33 360 = 6672 students) the Australian Government and the Australian Community will save a total of $2 111 020 800 over twenty years when 6672 students (who typically would be excluded from education) remain engaged in Australian Public Education. The following equation illustrates the cost SAVING for this twenty year period in today’s dollars.

(6672 x 8400 + 6672 X 15400) x 20 = $2 111 020 800 (or $158 793 600 per year)

The focus on socialization as an ameliorating factor for marginalization is necessary to decrease both the Social and Fiscal costs to the Australian society. The Toowoomba Flexi-School Inter-Generational Program is an example of a program that focuses on socialization and a program that has already saved the government money through the increased school engagement of groups of marginalized young people in Toowoomba. This program is presented as part of a Case Study in Dr Carol Schultz’s dissertation. The Toowoomba Flexi School is an alternative educational model that has substantial worth in building social capital. Poor educational outcomes have been identified by The Commonwealth Government as one of the factors that continue to drive social exclusion in Australia (Commonwealth of Australia, 2009). Among young people who do not work or study, mental health statistics indicate double the prevalence of psychological distress (Australian Bureau of Statistics, 2008). Mental health disorders in Australia are highest in the age range of 16 to 24 years. Twenty-six percent of young people in this age range experience a mental health disorder (Australian Bureau of Statistics, 2008). Gaining an education and actively engaging in their community is therefore vital for young people. More inclusive educational opportunities for marginalized young people can be achieved when communities build their adaptive capacities.

The Models and recommendations proposed by Dr Carol Schultz’s research  represents exceptional value for money for both the Australian Government and the Australian Community. At the very least, if the Model proposed (Total Budget of $34 920 000) reduces the current exclusion figure by 20% over the next twenty years the Australian government and Australian Community will save ($2 111 020 800 or $158 793 600 per year over this groups Lifespan) AND reduce marginalization in schools and in the wider Australian community.

NB: an investment of $34 920 000 to save $2 111 020 800 over 20 years AND $158 793 600 saving per year over this groups Lifespan

These figures presented here are a conservative estimate for the value of Dr Carol Schultz’s Models and recommendations in addressing the problem of youth marginalization. If implemented as proposed, the Models and recommendations represent excellent value for money for a small government investment (or saving).

Feel free to like or comment.

Copyright 2019 Dr Carol Schultz

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