The problems facing young people in Australia's current labor market and the effectiveness of Australia's educational system in preparing young people for the labor market were examined. Particular attention was paid to the following issues: the reshaping of work in the modern labor market; skill development in the modern labor market; the impact of nonstandard employment arrangements on workplace learning; the balance of risk for young people; and past policy failures and young people. The following policy responses to the problem of better preparing young people for Australia's changing labor market were discussed: (1) a legislated national youth commitment guaranteeing a foundation level of education, training, and employment assistance; (2) a national second-chance or alternative learning strategy; (3) consideration of the workforce's skill structure, available opportunities for decent and rewarding work, and sources of economic well-being that encourage more diverse and demanding skill repertoires; (4) an active government role in terms of labor market risk management; and (5) reconsideration of the business, organization, and conduct of government. Policymakers were advised that overcoming the deep-rooted challenges facing Australia's labor market will require rethinking an economic and social agenda built around skill development across multiple capacities and the role of all stakeholders in building such an agenda. (MN)