Australia must find new approaches to education and training to overcome entrenched youth unemployment, an academic warns.

Professor John Spoehr of Adelaide University says there is a cycle of intergenerational unemployment that is proving hard to break, and restricting the dole and other punitive measures will not help.

He says areas where the youth jobless rate far exceeds high adult unemployment rates include western Melbourne, parts of western Sydney and outer northern and southern regions of Adelaide.

The executive director of the Australian Workplace Innovation and Social Research Centre at the university says families with little history of anyone in work find themselves unable to support their young people.

Professor Spoehr says policies are needed that give new pathways into work for young people by involving their wider families in the effort.

"That requires not only different ways of thinking about schooling, but also different ways about combinations of employment and training, so we haven't really got that right at the moment," he said.

He says the chronic high jobless rate for young people has not been helped by the disappearance of many jobs in industry and manufacturing.

"We have to be very careful not to create the conditions... in Australia where young people find it very difficult to find entry-level jobs, secure jobs, at the beginning of their careers," he said.

Entry-level jobs have dried up

He says the global financial crisis (GFC) of 2008 led many employers to consolidate their workforces and make their existing staff put in longer hours.

"Secure, entry-level youth employment opportunities dried up from that post-GFC period, except in the areas where young people are overwhelmingly concentrated anyway, retail and hospitality," he said.

"Jobs in the public sector were also hard to come by... and that's a problem that could get worse in terms of public sector full-time employment opportunities."

Professor Spoehr is worried about the prospect the federal budget might remove the dole for people under 25 and force them onto the lower youth allowance if they are not in work or training.

"There's no evidence that they will work, those punitive measures are likely to create further disadvantage where very high levels of disadvantage currently exist," he said.

"Pushing down youth wages, pushing down the minimum wage and forcing young people to be more mobile are very negative, punitive ways of trying to solve the problem.

"We don't want to dislocate people from their networks and their families and we don't want a differential rate of minimum wage."

Spoehr warns against US model

Professor Spoehr warns Australia against emulating the United States model of recent years, which he says has brought greater inequality.

He says the minimum wage, often cited as high by international standards, does not appear to be the barrier to young people getting work.

There is no real evidence the level of the minimum wage is an employment disincentive, he argues, it is more the lack of demand for goods and services in a difficult economic environment Australia is facing.

"Wages rank relatively lowly in the barriers to growth for most employers, in reality," he said.

Entry jobs drying up except in retail and hospitality.

"Lowering the minimum wage has a perverse effect of depriving the economy of a source of spending power and so you can create the circumstance that you're trying to avoid by forcing down wages.

"Really we don't want to get into a downward bidding war, a Dutch auction over wages in Australia."

Professor Spoehr also warns Australia to heed to experience from Europe, where countries such as Spain, Italy and Greece have seen spiralling youth unemployment.

He says Australia cannot afford a disenfranchised generation of young people.