tag:theconversation.com,2011:/uk/topics/work-for-the-dole-11114/articlesWork for the dole – The Conversation2021-03-24T22:44:36Ztag:theconversation.com,2011:article/1575062021-03-24T22:44:36Z2021-03-24T22:44:36ZWhat happens when you free unemployed Australians from ‘mutual obligations’ and boost their benefits? We just found out<figure><img src="https://images.theconversation.com/files/391338/original/file-20210324-17-f3sjoo.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C2703%2C1407&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">ldutko/Shutterstock</span></span></figcaption></figure><p>During COVID-19 the government ran what turned out to be a giant real-world experiment into what happens when you boost someone’s unemployment benefits and free them of the “mutual obligation” to apply for jobs. </p>
<p>On April 27 2020 the government as good as doubled the $565.70 per fortnight JobSeeker payment, lifting it by <a href="https://theconversation.com/scalable-without-limit-how-the-government-plans-to-get-coronavirus-support-into-our-hands-quickly-134353">$550</a> per fortnight for what turned out to be six months. In September the boost dropped to <a href="https://theconversation.com/unemployment-support-will-be-slashed-by-300-this-week-this-wont-help-people-find-work-146289">$250</a> per fortnight, and in December to <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/coronavirus-supplement">$150</a> per fortnight. </p>
<p>Next Thursday the boost vanishes, although the base rate of JobSeeker will climb by a less-than substantial <a href="https://theconversation.com/50-a-fortnight-rise-in-jobseeker-comes-with-tougher-job-search-requirements-155858">$50</a> a fortnight, leaving recipients $100 a fortnight worse off than they have been, $500 per fortnight worse off than back when JobSeeker doubled and back well below the <a href="https://theconversation.com/at-least-2-6-million-people-face-poverty-when-covid-payments-end-and-rental-stress-soars-157244">poverty line</a>.</p>
<p>From Thursday April 1 they will also be subject to much more demanding work tests, having to show they have applied for a minimum of <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/jobseeker-payment/what-your-commitments-are">15 jobs a month</a>, climbing to 20 jobs a month from July 1.</p>
<p>On <a href="https://www.pm.gov.au/media/morrison-government-commits-record-9b-social-security-safety-net">top of that</a> the government has announced </p>
<ul>
<li><p>a return to compulsory face-to-face meetings with Jobactive providers</p></li>
<li><p>work-for-the-dole after six months of unemployment</p></li>
<li><p>a dob-in line for employers to report jobseekers who seem not to be genuine</p></li>
<li><p>increased auditing of job applications to ensure they are legitimate</p></li>
</ul>
<p>They are the sort of “mutual obligations” that were scrapped while JobSeeker was doubled. </p>
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<em>
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Read more:
<a href="https://theconversation.com/australia-has-a-long-history-of-coercing-people-into-work-there-are-better-options-than-dobbing-in-156296">Australia has a long history of coercing people into work. There are better options than 'dobbing in'</a>
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<p>Yet the government’s natural experiment where they doubled benefits and freed recipients of “mutual obligations” provides us with an opportunity to examine how a more generous approach affected recipients and whether, as the government says, a tougher approach is needed in order to <a href="https://www.news.com.au/finance/work/scott-morrison-says-aussies-refusing-to-work-due-to-higher-dole-payments/news-story/f72d57e48d29ae3e238c99b829409c7c">compel people to work</a>.</p>
<p>During last year’s more generous approach, we conducted an <a href="https://www.cfecfw.asn.au/wp-content/uploads/2021/03/Social-security-and-time-use-during-COVID-19-Report-Treating-Families-Fairly-2021.pdf">online survey</a> of JobSeeker recipients and found that (contrary to what appears to be the government’s expectation), it was helping get people into work.</p>
<p>Freed of “mutual obligations”, many were able to devote time to reengaging with the workforce.</p>
<p>As one respondent said, </p>
<blockquote>
<p>I was able to focus on getting myself back into the workforce. Yes, mutual obligation activities PREVENT people from being able to start a new business or re-enter the workforce as an employee</p>
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<p>And the extra income freed recipients to do things that would advance their employment prospects; either through study, through properly looking for work, or buying the tools needed to get work.</p>
<p>One said </p>
<blockquote>
<p>I could buy things that helped me with employment — equipment for online work, a bicycle for travel, a proper phone"</p>
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<p>An Australia Institute <a href="https://australiainstitute.org.au/wp-content/uploads/2021/02/P1035-Unemployment-payments-and-work-incentives-WEB.pdf">review</a> of unemployment payments and work incentives in 33 OECD countries found something similar — that higher payments correlate to lower unemployment.</p>
<p>Another respondent said the suspended mutual obligation requirements made it easier to care for an elderly parent during pandemic and their recovery from major surgery.</p>
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Read more:
<a href="https://theconversation.com/2-6-million-face-poverty-when-covid-payments-end-rental-stress-soars-157244">2.6 million face poverty when COVID payments end, rental stress soars</a>
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<p>Another said she had been able to focus on her health needs and her children.</p>
<p>People on social security are often accused of being dependent on welfare, but it’s often the economy and society that are dependent on their unpaid labour. </p>
<p>Yet (except for during the worst of the pandemic) these people have been denied a safety net that ensures their survival.</p>
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<a href="https://images.theconversation.com/files/391332/original/file-20210324-13-1yv9ddm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/391332/original/file-20210324-13-1yv9ddm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/391332/original/file-20210324-13-1yv9ddm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=969&fit=crop&dpr=1 600w, https://images.theconversation.com/files/391332/original/file-20210324-13-1yv9ddm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=969&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/391332/original/file-20210324-13-1yv9ddm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=969&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/391332/original/file-20210324-13-1yv9ddm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1218&fit=crop&dpr=1 754w, https://images.theconversation.com/files/391332/original/file-20210324-13-1yv9ddm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1218&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/391332/original/file-20210324-13-1yv9ddm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1218&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Fewer obligations meant parents were better able to care for children.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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<p>The inadequacy of payments goes to a major and enduring flaw in the Australian social security system — its inability to recognise all of the productive activities people undertake, including <a href="https://www.canberratimes.com.au/story/6836986/not-enough-work-there-is-plenty-we-just-need-to-pay-for-it/">unpaid care </a> largely undertaken by women.</p>
<p>The decisions the government took during 2020 made a major difference to the lives of people outside the formal workforce. </p>
<p>They enabled them to turn their attention away from day-to-day survival towards envisioning and realising a more financially and emotionally sustainable future for themselves and their dependants.</p>
<p>The flow-on benefits, to all of us, ought to be substantial.</p>
<p>The government ought to be very interested. </p>
<p>If it was, it would examine the findings further, but they don’t seem to be on its radar.</p><img src="https://counter.theconversation.com/content/157506/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Elise Klein has received funding from the British Academy, is a current board member of the Institute of Postcolonial Studies and is a member of BIEN.
Kelly Bowey, Senior Policy and Research Officer at the Centre for Excellence in Child and Family Welfare, assisted with the preparation of this piece.</span></em></p><p class="fine-print"><em><span>Kay Cook and Susan Maury do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>An online survey suggests they found it easier to live, easier to care for their families, and easier to prepare for the world of paid work.Elise Klein, Senior Lecturer, Australian National UniversityKay Cook, Senior Lecturer, Justice and Legal Studies Department, Swinburne University of TechnologySusan Maury, PhD candidate in Psychology, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1017282018-08-28T20:18:36Z2018-08-28T20:18:36ZThe Indigenous employment gap is widening and we don’t know how to fix it<p>The <a href="https://closingthegap.pmc.gov.au/executive-summary">Closing the Gap</a> framework sought to halve the employment gap between Indigenous and non-Indigenous Australians, among other targets. But the employment target expired unmet <a href="https://closingthegap.pmc.gov.au/sites/default/files/ctg-report-2018.pdf">this year</a>. </p>
<p>In remote parts of Australia, the gap has actually <a href="http://caepr.cass.anu.edu.au/sites/default/files/docs/2018/6/CAEPR_Census_Paper_5_2018_0.pdf">widened</a> since 2011. </p>
<p>Governments have relied on a series of employment programs to tackle the employment gap, but these have not yielded positive outcomes. Before the new program <a href="https://www.budget.gov.au/2018-19/content/bp2/download/bp2_combined.pdf">starts in 2019</a> we need more evidence of what does and doesn’t work.</p>
<p>There has been no robust evaluation of the last two employment programs. Evidence of what does work might help us finally start closing the gap. </p>
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Read more:
<a href="https://theconversation.com/australia-is-missing-the-closing-the-gap-employment-target-by-decades-91648">Australia is missing the Closing the Gap employment target by decades</a>
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<p>Although the median Indigenous income <a href="http://caepr.cass.anu.edu.au/sites/default/files/docs/CAEPR_Census_Paper_2.pdf">has improved</a> overall, the income gap between Indigenous and non-Indigenous Australians is <a href="https://theconversation.com/were-not-closing-the-gap-on-indigenous-employment-its-widening-89302">also growing</a>, particularly in remote areas. </p>
<p>This is a concerning trend and does not align with <a href="https://www.malcolmturnbull.com.au/media/closing-the-gap-report-2018">government narratives</a> around reducing Indigenous disadvantage. </p>
<h2>Employment programs</h2>
<p>Since the Community Development Employment Projects scheme began to be rolled back in <a href="https://aifs.gov.au/sites/default/files/bh(1).pdf">2007</a> (before it was later abolished), a series of other programs operated in remote communities. </p>
<p>These have included the Job Network, Job Services Australia, the Remote Jobs and Communities Program and the current <a href="https://www.pmc.gov.au/indigenous-affairs/employment/community-development-programme-cdp">Community Development Programme</a>. </p>
<p>The standard approach of these programs has been to increase pressure on jobseekers to participate in “work-for-the-dole” (for example, through increased participation hours), and mete out financial penalties when jobseekers fail to abide by the program rules. </p>
<p>In this way, it’s hoped programs can somehow <em>push</em> jobseekers into employment. </p>
<p>The four programs are very similar in terms of their modes of delivery, funding structures and core components. However, they also differ in important ways. </p>
<p>For example, although Job Network and Job Services Australia included graduated support for more severely disadvantaged jobseekers, this was removed from the Remote Jobs and Communities Program and Community Development Programme. </p>
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Read more:
<a href="https://theconversation.com/were-not-closing-the-gap-on-indigenous-employment-its-widening-89302">We're not closing the gap on Indigenous employment, it's widening</a>
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<p>Funding for broader community development (to create more jobs) that existed under the Remote Jobs and Communities Program was also dramatically reduced under the Community Development Programme. </p>
<p><a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Finance_and_Public_Administration/CDP/Report">Many</a>, including program providers, participants, Indigenous leaders, and academics, have <a href="https://www.whitlam.org/publications/rethinking-australias-employment-services">argued</a> this approach <a href="http://caepr.cass.anu.edu.au/sites/default/files/docs/CAEPR_Topical_Issues_2_2016_0.pdf">oversimplifies</a> the challenges involved in improving remote employment. </p>
<p>For example, employment programs haven’t adequately addressed structural barriers to gaining employment, such as the <a href="http://press-files.anu.edu.au">availability of jobs</a> and the long term effects of poorer <a href="https://search.informit.com.au/documentSummary;dn=070995750909473;res=IELAPA">educational</a> attainment, health and well-being. </p>
<p>Nevertheless, robust evidence concerning outcomes and impacts of these recent programs is scarce. </p>
<p>Evaluations of <a href="https://docs.jobs.gov.au/system/files/doc/other/job_network_evaluation_stage_three_effectiveness_report.pdf">Job Network</a> and <a href="https://docs.jobs.gov.au/system/files/doc/other/servicing_indigenous_job_seekers_in_job_services_australia.pdf">Job Services Australia</a> were undertaken, but they were not independent, and had methodological problems. </p>
<p>This meant they could not reliably distinguish program effects from other factors that may have also influenced results. Even so, the evaluations only uncovered minimal evidence of positive outcomes. </p>
<p>The subsequent program – the <a href="https://www.dss.gov.au/sites/default/files/files/indigenous/remote-jobs/CDF_Guidelines_v1_1.PDF">Remote Jobs and Communities Program</a> (2013–2015) – was not evaluated at all. </p>
<h2>More harm than good?</h2>
<p>The Community Development Programme (2015–present) has been subject to a number of reviews, including by the <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Finance_and_Public_Administration/CDP/Report">Senate Standing Committee on Finance and Public Administration</a> and the <a href="https://www.anao.gov.au/sites/g/files/net4981/f/ANAO_Report_2017-2018_14a.pdf">Australian National Audit Office</a>. </p>
<p>These reviews, and other <a href="http://caepr.cass.anu.edu.au/sites/default/files/docs/CAEPR_Topical_Issues_2_2016_0.pdf">research</a> and <a href="http://www.abc.net.au/news/2018-05-02/work-for-the-dole-cdp-scheme-costly-failure-harming-people/9714522">commentary</a>, have pointed to anecdotal evidence the Community Development Programme has caused harm. </p>
<p>For example, inflexible program rules have resulted in <a href="http://caepr.cass.anu.edu.au/sites/default/files/docs/CAEPR_Topical_Issues_2_2016_0.pdf">disproportionate</a> <a href="https://17-jobsaust.cdn.aspedia.net/sites/default/files/cdp_penalties_-_september_update.pdf">fines</a> being imposed. This has hurt income stability and <a href="http://caepr.cass.anu.edu.au/sites/default/files/docs/CAEPR_Topical_Issues_2_2016_0.pdf">food security</a> for some jobseekers, many of whom are already living in circumstances of disadvantage. </p>
<p>An independent evaluation of the Community Development Programme is currently <a href="https://www.anao.gov.au/sites/g/files/net4981/f/ANAO_Report_2017-2018_14a.pdf">under way</a>. However, despite the evaluation being planned for completion in <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Finance_and_Public_Administration/CDP/%7E/media/Committees/fapa_ctte/CDP/report.pdf">mid-2018</a>, no findings have been publicly released.</p>
<p>The Community Development Programme evaluation design was only developed and signed off between <a href="https://www.anao.gov.au/sites/g/files/net4981/f/ANAO_Report_2017-2018_14a.pdf">seven and 10 months</a> after the program was implemented (rather than forming part of the program design). </p>
<p>This contradicts <a href="https://pmc.gov.au/sites/default/files/publications/ias-evaluation-framework.pdf">one of the best practice principles</a> for evaluation in Indigenous affairs. There was also no consideration of the initial design by an evaluation <a href="https://www.anao.gov.au/sites/g/files/net4981/f/ANAO_Report_2017-2018_14a.pdf">reference group</a>. </p>
<p>According to the <a href="https://www.aph.gov.au/%7E/media/Committees/fapa_ctte/estimates/add_1617/pmc/pm103.pdf">Department of Prime Minister & Cabinet</a>, the evaluation is supposed to “assess early signs of impact and explore what works for who and in what circumstances”.</p>
<p>However, aside from some information regarding the <a href="https://www.anao.gov.au/sites/g/files/net4981/f/ANAO_Report_2017-2018_14a.pdf">types</a> of <a href="https://pmc.gov.au/sites/default/files/publications/ias-evaluation-workplan.pdf">data</a> being used, the exact methods used in the evaluation are unclear. </p>
<p>In particular, it’s <a href="https://www.anao.gov.au/sites/g/files/net4981/f/ANAO_Report_2017-2018_14a.pdf">unclear</a> how or whether the evaluation will be able to isolate the impacts of the Community Development Programme.</p>
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<em>
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Read more:
<a href="https://theconversation.com/eight-ways-we-can-improve-indigenous-employment-60377">Eight ways we can improve Indigenous employment</a>
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<p>A <a href="https://www.budget.gov.au/2018-19/content/bp2/download/bp2_combined.pdf">new program</a> is planned to replace the Community Development Programme from 1 February 2019. Ideally, the evaluation findings would have been available to inform ongoing consultation. </p>
<p>But most of this consultation has now already taken place. </p>
<p>The Commonwealth government has <a href="https://www.anao.gov.au/sites/g/files/net4981/f/ANAO_Report_2017-2018_14a.pdf">committed</a> to improving the evidence base in Indigenous affairs. It has highlighted the importance of achieving greater <a href="https://pmc.gov.au/sites/default/files/publications/ias-evaluation-framework.pdf">transparency</a> in the public release of evaluation reports (in line with similar calls <a href="https://www.pc.gov.au/research/supporting/better-indigenous-policies/07-better-indigenous-policies-chapter5.pdf">elsewhere</a>) and also made moves to appoint an <a href="http://sjm.ministers.treasury.gov.au/media-release/029-2018/">Indigenous Commissioner</a> to the Productivity Commission.</p>
<p>These are positive steps. But the Commonwealth must hold itself to the same standards as it seeks to hold others. </p>
<p>Rigorous, well designed evaluation is important in informing future policy-making, and developing a stronger evidence base for strategies that hold true potential for closing the remote employment gap. Monitoring and evaluation are also important for ensuring programs intended to reduce disadvantage do not, instead, exacerbate it.</p><img src="https://counter.theconversation.com/content/101728/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Zoe Staines consults to the Cape York Institute for Policy and Leadership.</span></em></p>Governments have relied on a series of employment programs to tackle the employment gap, but these have not yielded positive outcomes.Zoe Staines, Research Consultant; Research Assistant, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/588682016-05-05T04:58:38Z2016-05-05T04:58:38ZExtra steps required to ensure jobs plan delivers for young people<figure><img src="https://images.theconversation.com/files/121326/original/image-20160505-19745-v8iba1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The government's new plan to help young people gain employment won't work for those who are severely disadvantaged.</span> <span class="attribution"><span class="source">Maureen Barlin/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span></figcaption></figure><p>The government’s Youth-Jobs PaTH program to increase jobs, announced in the budget, is a step in the right direction but its success will depend on a number of factors. </p>
<p>The program will see young jobseekers receive six weeks of pre-employment training followed by a subsidised internship for four to 12 weeks. Employers can then choose to retain interns for a longer period, again supported by a wage subsidy.</p>
<p>While any move away from the <a href="https://theconversation.com/work-for-the-dole-doesnt-work-but-here-is-what-does-22492">discredited Work for the Dole program</a> might be seen as a good thing, the PaTH program has already attracted controversy. Employer groups have expressed support for the program but <a href="http://www.abc.net.au/worldtoday/content/2016/s4455836.htm">the ACTU has argued</a> that it will deter job creation and allow employers to exploit young workers by paying below-award wages.</p>
<h2>Will PaTH work for all job seekers?</h2>
<p>A program such as PaTH is likely to work best for young job seekers with a medium level of disadvantage to getting work – who need some polishing of their job seeking skills and an opportunity to demonstrate to an employer that they can perform well in the workplace.</p>
<p>For job seekers who aren’t at a disadvantage in finding work, PaTH may be much more than is needed for them to obtain a job. The danger is that if these job seekers are allowed to participate in the program, they will be chosen by employers for internships before other job seekers with higher levels of disadvantage. Employers will then receive a subsidy for a worker they would have been willing to hire at the award wage; and internships won’t be going to job seekers who would benefit most. </p>
<p>For this reason, the restriction of the PaTH internship scheme to job seekers who have been in employment services for at least six months is sensible – as would be any further measures to ensure the program cannot be accessed by job seekers who might easily find work.</p>
<p>At the other end of the spectrum, the type of assistance in PaTH will not be enough to make disadvantaged job seekers, such as those who are homeless or have language and literacy problems, job ready. Genuine assistance for this group requires funding service providers to work with them for a longer period and support them during the internship. </p>
<p>Because PaTH won’t enable more disadvantaged job seekers to become job ready, it follows that employers won’t be willing to put them into internships. Instead they will languish and still be forced to undertake Work for the Dole once their unemployment spell reaches 12 months.</p>
<h2>Where will the internships come from?</h2>
<p>Subsidy programs have a history of low take-up rates. Even with the offer of a subsidy, experience shows employers (quite reasonably) are only willing to take on job seekers who are job ready, so it has often proved difficult to meet targets for placements. </p>
<p>An example of this is the Job Compact from the mid-1990s. Initially it was planned to give 70% of long-term unemployed work experience via wage subsidies, but eventually only 30% were able to be placed. More recently, the <a href="http://www.vic.gov.au/backtowork.html">Victorian Government’s Back to Work</a> program had to be restructured following low take-up. So it will be important to find effective ways for creating internships.</p>
<p><a href="https://journal.anzsog.edu.au/publications/25/EvidenceBase%202014Issue4Version1.pdf">The evidence</a> is that this is best done via local partnerships between service providers who can provide training in job readiness, and employers who will provide the job placements. In a local partnership, service providers will be able to target the training they provide at the available placements and employers will be able to develop trust in the quality of job seekers to whom they give internships. A close relationship will also mean that the service provider can continue to support the job seeker and employer during the internship.</p>
<h2>Getting the internships right</h2>
<p>The incentives to participate in PaTH for job seekers and employers will depend on the structure of payments and on the labour market benefits they receive (for job seekers this benefit is work experience, and for employers is the possibility of finding a worker who they would like to retain).</p>
<p>So far there has <a href="http://www.businessinsider.com.au/people-are-outraged-by-the-federal-budgets-internship-program-which-pays-4-an-hour-on-top-of-their-existing-payments-2016-5">been considerable focus on</a> whether the income support supplement to job seekers of A$100 a week during the internship is fair and likely to motivate them to participate. Another aspect is the $1,000 payment to employers. </p>
<p>A lump-sum payment may incentivise employers to offer the shortest possible length of internship. A better alternative would have been to seek to motivate employers to offer longer internships by making the payment vary with the length of internship. All this suggests some more thought may need to go into the payment structure to ensure the incentives are right.</p>
<p>Another critical aspect of the internship is the type of job placement. Any work experience in the private or government sector work will bring some valuable development of skills. And even where it doesn’t lead to a longer-term job offer, there is the benefit of being able to obtain a reference. At the same time, it is easy to envisage the quality of internships, and hence their benefit to job seekers, varying widely. For that reason, some standards for what is expected from an internship should be part of the program.</p>
<h2>How many extra jobs?</h2>
<p>Wage subsidy programs will bring a small amount of extra job creation while they are in place. In some cases, the offer of a subsidy may be sufficient to convince an employer of the need to create a new job. However, <a href="http://www.keepeek.com/Digital-Asset-Management/oecd/employment/oecd-employment-outlook-2015/activation-policies-for-more-inclusive-labour-markets_empl_outlook-2015-7-en#page35">the evidence on these programs</a> is that in most cases employers will substitute a worker receiving a wage subsidy for another worker who they would otherwise have hired. </p>
<p>Once the subsidy scheme is over, any effect on job creation disappears. So the best way for a government to create extra sustainable jobs is by doing all it can to promote economic growth.</p><img src="https://counter.theconversation.com/content/58868/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jeff Borland receives funding from the Australian Research Council.</span></em></p>The success of the government’s new youth employment plan will depend on how its used by services, employers and young people alike.Jeff Borland, Professor of Economics, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/563552016-04-20T20:14:06Z2016-04-20T20:14:06ZIdeas for Australia: Welfare reform needs to be about improving well-being, not punishing the poor<figure><img src="https://images.theconversation.com/files/118063/original/image-20160411-12525-6wgh70.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">At its peak in 1996, nearly 25% of Australia's working-age population was receiving basic income support benefits.</span> <span class="attribution"><span class="source">AAP/Dan Peled</span></span></figcaption></figure><p><em>The Conversation has asked 20 academics to examine the big ideas facing Australia for the 2016 federal election and beyond. The <a href="https://theconversation.com/au/topics/ideas-for-australia">20-piece series</a> will examine, among others, the state of democracy, health, education, environment, equality, freedom of speech, federation and economic reform.</em></p>
<hr>
<p>Over the past two decades, Australia’s social welfare system has been subject to major reforms and many small-scale adjustments. This is sometimes designed to increase payment levels and expand eligibility for assistance. At other times, the aim is to <a href="https://theconversation.com/shaping-2015-social-services-need-more-than-short-term-fixes-36009">scale back spending and restrict eligibility</a>.</p>
<p>At its peak in 1996, nearly 25% of the working-age population (16 to 64 years) was receiving basic income support benefits. These are payments like Newstart and Youth Allowance for the unemployed, the Disability Support Pension, Parenting Payment Single for lone parents, and the Carers Payment.</p>
<p>By 2014, this <a href="https://www.dss.gov.au/publications-articles/research-publications/statistical-paper-series">figure was 16.8%</a>.</p>
<p>This dramatic drop is the result of a wide range of factors, including:</p>
<ul>
<li><p>population growth and an ageing population – which could be expected to push up numbers on welfare;</p></li>
<li><p>changes in unemployment and the labour market more generally;</p></li>
<li><p>changes in family composition; and</p></li>
<li><p>changes in government policies.</p></li>
</ul>
<h2>Protecting or penalising?</h2>
<p>The main policy agenda in Australia – and many other OECD countries – for working-age people receiving social security payments is usually described as “<a href="http://link.springer.com/chapter/10.1057%2F9780230307636_2">activation</a>”.</p>
<p>The objective of an effective activation policy is to increase the efforts of the unemployed to find work and bring more people into the labour force by requiring them to actively look for work. </p>
<p>The theory is that the greater a person’s efforts in actually looking for work, the greater their chances of finding it. This is based on the idea that unemployment is primarily an issue of deficient labour supply, rather than insufficient demand.</p>
<p>In Australia, this has involved a number of specific strategies. For people on unemployment payments who have always been required to actively look for work, these include:</p>
<ul>
<li><p>additional requirements for the number of <a href="http://www.abc.net.au/news/2014-07-29/sheen-welfare-overhaul-reality-check/5631592">jobs they need to apply for each fortnight</a>;</p></li>
<li><p>penalties or sanctions for <a href="https://www.humanservices.gov.au/customer/enablers/penalties-not-meeting-your-mutual-obligation-requirements">failing to satisfy the “work test”</a>; and</p></li>
<li><p>the <a href="https://www.employment.gov.au/work-dole">work-for-the-dole scheme</a>, which requires some people receiving unemployment payments to work 15 hours a week to remain eligible for benefits.</p></li>
</ul>
<p>Evidence on the effectiveness of these approaches is mixed. A <a href="http://cf.fbe.unimelb.edu.au/staff/jib/documents/wfdwp.pdf">study</a> on <a href="https://theconversation.com/work-for-the-dole-doesnt-work-so-why-is-it-coalition-policy-784">work for the dole’s</a> pilot phase found participants in the program were no more likely to move off welfare payments in the 12 months than a comparable group of payment recipients who did not participate. The explanation for this finding includes the observation that for people to move off welfare, new jobs need to be available.</p>
<p>In contrast, the OECD’s <a href="https://www.oecd.org/els/emp/Employment-Outlook-2013-chap3.pdf">2013 Employment Outlook</a> argued that all countries with well-developed systems of income support for the unemployed also need a strong activation system:</p>
<blockquote>
<p>… backed up where necessary, and certainly after six months or a year of unemployment, by mandatory referrals, enforced by benefit sanctions, to employment and training programs.</p>
</blockquote>
<p>The OECD report suggests the job-search requirements in Australia are more onerous than those in the other countries studied. In 2007, a jobseeker in Australia could be required to report between eight and 20 job-search activities each month, compared to four to ten each month in Switzerland, ten in the UK and only two in Japan.</p>
<p>The OECD also notes that since 2000 there have been “vast swings” in sanction rates (penalties for non-compliance), with sanctions ranging in this period from 25,000 a year to 300,000. The <a href="http://www.acoss.org.au/wp-content/uploads/2015/06/ACOSS_submission_to_the_social_security_compliance_bills_inquiry.pdf">Australian Council of Social Service</a> has pointed out that despite changes to compliance arrangements and penalties over this period, the proportion of appointments missed at some stage has remained relatively stable at 35% to 45%.</p>
<p>The <a href="http://insidestory.org.au/the-budget-fairness-and-class-warfare/">2014 federal budget</a> proposed what might be viewed as the strongest form of activation ever envisaged in any rich country – unemployed young people under the age of 30 would have to wait up to six months to receive Newstart payments. While unemployed people under 30 receive <a href="http://insidestory.org.au/the-budget-fairness-and-class-warfare/">less than 1%</a> of total Commonwealth budget spending, they would have contributed close to 10% of total budget savings had these proposals been implemented.</p>
<p>The government’s rationale for this was to stop young people becoming “entrenched on welfare”. But data <a href="http://www.australianreview.net/digest/2015/10/whiteford4.html">shows that</a> roughly three in every 1,000 young people who ever received welfare benefits between 2001 and 2011 remained reliant on benefits for the whole period.</p>
<h2>Extending activation</h2>
<p>Activation has been extended to groups other than the unemployed. This has been achieved mainly by restricting access to non-activity-tested payments and either directly or indirectly transferring them to Newstart. </p>
<p>In 1995, the Wife Pension was closed to new entrants, and the Age Pension age for women started to be raised from 60 to 65. In 2003, Mature Age Allowance and Partner Allowance were closed to new entrants. In 2005, new grants of Widow Allowance were restricted.</p>
<p>Cumulatively, these changes were associated with <a href="http://insidestory.org.au/is-welfare-sustainable">large reductions</a> in the numbers of recipients of many benefits. There were marked reductions in numbers of women receiving Age Pensions and particularly those receiving “dependency payments” as wives or widows.</p>
<p>The Howard government’s <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook43p/welfaretowork">“welfare to work”</a> reforms of 2006 and 2007 lowered the age of child eligibility of Parenting Payment Single to eight years and Parenting Payment Partnered to six years. New claims for Disability Support Pension were restricted to those having an assessed work capacity of less than 15 hours per week (down from 30 hours). </p>
<p>Parenting Payment Single recipients who had been receiving payments before 2006 were protected from these changes. New claimants were required to move to Newstart rather than the Parenting Payment once their youngest child turned eight.</p>
<p>The Gillard government’s 2010–11 budget included revised access procedures for some Disability Support Pension claimants, starting January 1, 2012, and new participation requirements from July 1, 2012. This affected recipients under the age of 35 assessed as having a work capacity of eight hours or more a week. </p>
<p>And, in January 2013, the Gillard government moved the “protected” Parenting Payment Single recipients onto Newstart.</p>
<h2>Has activation worked?</h2>
<p>Another 2013 <a href="http://www.oecd.org/els/emp/activatingjobseekershowaustraliadoesit.htm">OECD report</a> concludes the reforms reduced the number of new benefit claims for Parenting Payment Single for those with a youngest child over eight years and Parenting Payment Partnered for those with a youngest child over six years by 51% and 55% respectively. </p>
<p>New claims for those affected by the Disability Support Pension changes were reduced by 38%.</p>
<p>Large reductions in the number of new Parenting Payment and Disability Support claimants still on benefits 50 weeks later suggested the measures had also increased exits from benefits.</p>
<p>The reforms, however, had very little impact on those not directly affected – for example, parents with younger children. </p>
<p><a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/6523.0">Surveys of household income</a> show that between the mid-1990s and 2013-14, the proportion of lone parent households whose principal source of income was government payments fell from around 60% to 40%. By 2011, a higher proportion of lone parents were mainly reliant on employment income than on welfare. </p>
<p>“Deep reliance” (that is, where 90% or more income comes from welfare) fell from 40% to 20%. Since 2000, the average incomes of lone parents have increased by around 49% in real terms compared to around 44% for the population generally.</p>
<p>These trends appear to suggest that welfare-to-work reforms have been successful. But, it is necessary to look in greater detail at the trends and their context to assess the role of policy changes.</p>
<p>Clearly, <a href="https://www.data.gov.au/dataset/dss-payment-demographic-data/resource/1cfde617-da6b-444a-9e97-584c596adb78">120,000 lone parents</a> on Newstart are worse off and further below the relative poverty line than they would be on Parenting Payment Single.</p>
<p>Between 1996 and the onset of the global financial crisis in 2008, Australia’s general unemployment rate <a href="http://www.rba.gov.au/chart-pack/factors-prod-labour-mkt.html#7">fell from more than 8% to close to 4%</a>. Some of this may have been due to the impact of the benefit activation reforms, but it was also due to Australia’s experience of uninterrupted economic growth. And that is a prerequisite for successful activation strategies.</p>
<hr>
<p><em>You can read other articles in the series <a href="https://theconversation.com/au/topics/ideas-for-australia">here</a>.</em></p><img src="https://counter.theconversation.com/content/56355/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Whiteford has received funding from the Australian Research Council and Jobs Australia. He is affiliated with the Commission for Inclusive Prosperity of the Chifley Research Centre and is a Fellow of the Centre for Policy Development. He is an independent member of the Sustainability Committee of the Board of the National Disability Insurance Agency.</span></em></p>What aspects of the government’s reforms succeeded in assisting people into employment? And did the reforms improve the population’s economic well-being? Or have they left some groups worse off?Peter Whiteford, Professor, Crawford School of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/299622014-07-31T20:48:06Z2014-07-31T20:48:06ZGrattan on Friday: Government must be held to account for what’s happening to children in detention<figure><img src="https://images.theconversation.com/files/55414/original/nwq754xt-1406797432.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Immigration Minister Scott Morrison has been the subject of calls to get asylum seeker children out of detention centres and into the community. </span> <span class="attribution"><span class="source">AAP/Nikki Short</span></span></figcaption></figure><p>Two characteristics of this government are that it regularly overreaches and that where possible it shies away from transparency and accountability.</p>
<p>Very different issues in the news this week highlight these features – the proposed new requirements for job seekers and some shocking revelations in relation to asylum seekers.</p>
<p>One would have thought, after all the trouble over its budget measures, that the government would have been careful in calibrating its new model for employment services. But instead it has again gone too far.</p>
<p>The argument that work-for-the-dole can help get and keep people engaged may be fair enough - although the hard evidence doesn’t support the conclusion it helps them into jobs. The government produces anecdotal accounts rather than empirical data to back up its belief that having the under 30s complete 25 hours a week for six months each year is the way to go.</p>
<p>And while obviously people on unemployment benefits should have to show they’re making serious efforts to apply for jobs, the proposed requirement to undertake up to 40 job searches per month seems absurd.</p>
<p>The small business sector is complaining it will be swamped with applications. Peter Strong, executive director of the Council of Small Business of Australia, said: “It’s not workable. It won’t really achieve anything. You know, it’s classic tough talking from governments that they do now and then”.</p>
<p>Employment minister Eric Abetz says people can do one application in the morning and another in the afternoon. The government is putting more emphasis on quantity rather than quality, which suggests it is driven more by ideology than common sense.</p>
<p>Answering criticism that the plan would increase red tape, Tony Abbott recalled his days as employment minister in the Howard government. “There was a requirement for people on unemployment benefits to make contact with potential employers and in those days, all you had to do was call or knock on the door and make a diary entry” which was “occasionally” audited by Centrelink. That sounds like tokenism.</p>
<p>The government points out its employment services blueprint is out for consultation, and it will be listening to feedback.</p>
<p>But what it has put up tells us a lot about its mindset. Go for the more extreme, rather than the moderate, approach. And assume that people who are unemployed are very likely to be so because they are not trying hard enough to get jobs.</p>
<p>The fact is that in some areas and for certain cohorts jobs will be hard to find.</p>
<p>The government encourages the option of people moving to where there is more work but even for the young, this is often not as easy as it suggests. And for both younger and older workers, there are particular problems in the labour market. While the government has some initiatives directed to these issues, its dominant attitude towards the unemployed – especially the young unemployed - seems punitive, most notably demonstrated by its imposition in the budget of a six months waiting period for the unemployment benefit for those under 30.</p>
<p>Saul Eslake, chief economist for Bank of America Merrill Lynch says: “The main reason for relatively high unemployment among young people is not that they don’t want to work but that there aren’t enough jobs for them.</p>
<p>"Employers in aggregate have almost completely stopped new hirings since the global financial crisis. Almost inevitably the brunt of that will be felt by new entrants to the work force – who are bound to be predominately young people.”</p>
<p>If it’s negative towards the young jobless, the government’s approach to asylum seekers is to try to dehumanise them in the public mind. They are labelled “illegals”. Immigration Minister Scott Morrison pronounced the 157 Tamils he was forced to finally bring to Australia as “economic migrants” before they have been processed.</p>
<p>After Human Rights Commission President Gillian Triggs visited Christmas Island and said most of the children were sick, and highlighted the self harm among them, Morrison on Wednesday rejected her account, essentially accusing her of giving an untruthful picture. </p>
<p>“I don’t think there is evidence of the claim that the Human Rights Commissioner has made in the way that she has made it,” he said. “I think they’re quite sensational claims that have been made. She herself is not a doctor and we have medical people who are there who provide that care on a daily basis.”</p>
<p>But on Thursday doctors with experience on the ground, who appeared before the Human Rights Commission’s inquiry into children in immigration detention, backed up her account in spades.</p>
<p>Psychiatrist Peter Young, former director of mental health services for the private provider International Health and Medical Services that has the immigration detention contract, made the very serious allegation that the Immigration department, presented with figures showing the significant mental health problems among child detainees, “reacted with alarm” and asked for the figures to be withdrawn from the reporting.</p>
<p>The department’s head, Martin Bowles, who also appeared at Thursday’s hearing, could not shed any light on this.</p>
<p>Two doctors who worked on Christmas Island in 2013 told the inquiry how inappropriate the conditions were for treating children. The inquiry heard that asylum seekers had medications taken from them when they arrived, including a three year old girl with epilepsy who started having seizures.</p>
<p>Asked about the children, Abbott told reporters: “They will be dealt with in the ordinary way and the best thing that we can do for children in detention is to ensure that this whole people smuggling business is ended as swiftly as possible and that is the commitment of this Government”. In other words he defaulted to the old mantra, which is not the present issue.</p>
<p>In a strong statement outside the inquiry, Triggs said Morrison “has a responsibility to be much more transparent about what is happening.</p>
<p>"We’re trying to get facts right when frankly it would be much simpler for the minister to provide the Australian public with this information in the first instance.”</p>
<p>She followed this up later with a call for Morrison to get the children out into the community “because a lot of damage is being done”.</p>
<p>Morrison, whose commitment to secrecy has been most recently shown by his refusal for weeks to disclose where the shipload of Tamils was, has said he will appear at the inquiry but this week gave the excuse of the High Court case over the Tamils to avoid doing so.</p>
<p>It is worth remembering that we are only hearing what is happening to the children in detention because of the independence of the Human Rights Commission and the willingness of Triggs to take on Morrison, refusing to be bullied by his attempt to discredit her. The onus is on Morrison to answer the latest claims and evidence. He is responsible for what is done by his department.</p>
<p>What this week has made clear above all else is that the call in a just-released report from a church taskforce for the guardianship of asylum seeker children to be removed from the Immigration Minister is absolutely spot on. The conflict of interest is blatant.</p>
<p><strong>Listen to the new Politics with Michelle Grattan podcast, with guest, <a href="http://michellegrattan.podbean.com/e/us-ambassador-john-berry/?token=27be07d85bcc5d78f5787fbb1f50d468">US Ambassador John Berry</a>.</strong></p>
<iframe id="audio_iframe" src="https://www.podbean.com/media/player/audio/postId/5238393?url=http%3A%2F%2Fmichellegrattan.podbean.com%2Fe%2Fus-ambassador-john-berry%2F" data-link="http://www.podbean.com/media/player/audio/postId/5238393?url=http%3A%2F%2Fmichellegrattan.podbean.com%2Fe%2Fus-ambassador-john-berry%2F" height="100" width="100%" frameborder="0" scrolling="no" data-name="pb-iframe-player"></iframe><img src="https://counter.theconversation.com/content/29962/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Two characteristics of this government are that it regularly overreaches and that where possible it shies away from transparency and accountability. Very different issues in the news this week highlight…Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/297452014-07-29T04:40:25Z2014-07-29T04:40:25ZMoving for work: not the panacea the government seeks<figure><img src="https://images.theconversation.com/files/55076/original/qydcqr5p-1406591242.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The government incentivises workers to relocate for a job, but is it incentivising the right workers?</span> <span class="attribution"><span class="source">Faisal Akram/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>As a policy response to unemployment and structural change, incentives for workers to relocate in search of work have been pushing higher up the policy <a href="http://www.smh.com.au/business/the-economy/workers-should-be-willing-to-move-for-jobs-20140728-zxi4f.html">agenda</a>. </p>
<p>This has been the trend since the World Bank’s 2009 World Development Report, <a href="http://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=544849&piPK=64165421&menuPK=64166093&entityID=000333038_20081203234958">“Reshaping Economic Geography”</a>, which abandoned the longstanding idea that governments should attract firms to sites where labour is abundant, and instead proposed that workers move to sites of job creation. </p>
<p>Worker mobility, spurred by the market forces of labour supply and labour demand, was celebrated as a means to unleash growth by enabling specialisation to flourish. </p>
<p>It follows that when job seekers find themselves living in areas with high unemployment, they are increasingly encouraged to move to places with more job opportunities. Labour mobility reduces labour market frictions and increases the quality of job matches. It also gives workers a wider pool of possible employment options. </p>
<p>The government’s <a href="http://employment.gov.au/news/relocation-assistance-take-job-programme">Relocation Assistance to Take Up a Job program</a>, announced earlier this month, embodies this logic. It offers assistance of A$6000 to eligible jobseekers who move to a regional area to take up a job and A$3000 for those moving to a metropolitan area. An additional $3000 is available to support the relocation of families. </p>
<p>To qualify, the new position must require more than 90 minutes travel; if the position is in a different capital city the destination city must have a lower unemployment rate. The funds can be used flexibly - for rental bonds, rental payments, removal costs and travel costs - but penalties apply if the job ends prematurely without an accepted explanation. To be eligible, a jobseeker must be registered with a Job Services Australia provider, have been in receipt of income support for at least 12 months, and be subject to activity test requirements. This programme replaces the under-subscribed 2013 Move 2 Work program.</p>
<h2>Good in theory…</h2>
<p>There are both practical and theoretical reasons to be wary of relocation as labour market strategy. Practically speaking, relocation is not an option for most job seekers. </p>
<p>The most important issue is the interaction of labour markets and housing markets. In places offering a range of skilled jobs, housing prices and rents are higher than they are in places with fewer jobs and less demand for housing. In places that are shedding jobs (Geelong, for example), house prices will be falling, so job-losers who sell to relocate are likely to absorb capital losses. Renters will face higher rents and difficulty finding suitable accommodation. </p>
<p>Consequently, jobseekers facing a move to a place with higher housing costs often discover they are better off – both financially and socially – by staying put and working in a less skilled and less well-paid job. This was the experience of former textiles workers in Camperdown and Warnambool in the early 1990s, former energy workers in the Latrobe Valley in the 1990s, and former Ansett Airlines workers in Sunbury in 2002. </p>
<p>There are other complications. Job vacancies have different spatial reaches depending on the skill demands – a rocket scientist might operate in a global labour market, a sales manager in a national market, a teacher in an urban market and an office cleaner in a local market. This means, contrary to the new policy, that job opportunities might be plentiful in an occupationally specific labour market, even if that town has a higher overall unemployment rate. </p>
<p>But in less skilled and less well paid occupations employers tend to recruit locally, a practice that makes practical sense. Even for higher skilled jobs, many firms now often recruit for multiple casual and part-time positions, offering reliable full-time work only to the best recruits. It would make no sense to relocate a family for a job that is not guaranteed to last, especially when an unsuccessful match risks draconian penalties. </p>
<p>The social impediments to relocation are no less important: people in relationships may be reluctant to move if the other partner does not wish to leave a career position; those with teenage children are unlikely to wish to be blamed for disrupting their children’s school performance; and those with young children, who rely on others to cope with the everyday emergencies of traffic jams and cancelled trains, are unlikely to risk losing their support networks.</p>
<h2>Benefiting the advantaged?</h2>
<p>All this means that encouraging relocation is another way of saying that policy will give preference to those who are able to relocate without difficulty - a cohort of younger, skilled and unattached jobseekers; people who are less likely to meet the new program’s eligibility conditions but are more likely to relocate on their own initiative. </p>
<p>The theoretical concerns about relocation policies warrant careful debate. Increasing worker mobility does not increase the total number of jobs in the national economy. What it is likely to do instead is sharpen recruitment, allocating jobs to the most qualified candidates in a larger applicant pool. But this might end up eroding the flexibility of the labour market as employers respond by demanding more exact skill set portfolios. </p>
<p>What relocation-led employment policies do not consider is the long-term implications of encouraging an exodus of skilled workers from lagging regions into already-crowded centres. </p><img src="https://counter.theconversation.com/content/29745/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sally Weller's research on labour mobility has been funded by the Australia Research Council.</span></em></p>As a policy response to unemployment and structural change, incentives for workers to relocate in search of work have been pushing higher up the policy agenda. This has been the trend since the World Bank’s…Sally Weller, Australian Research Council Future Fellow, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/297432014-07-28T20:29:15Z2014-07-28T20:29:15ZTen job seekers per vacancy: a reality check on welfare overhaul<figure><img src="https://images.theconversation.com/files/55011/original/sbzpyzs9-1406525243.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Anyone who imagines most job seekers have it easy probably hasn't been out of work recently.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/hangout-lifestyle/5859665794/in/photolist-9VNjuA-e2fQKB-xnesy-ahiTDV-9ePPiG-gqTYQ-jHRDAs-9qP8m2-7iDp2X-9ykAkC-9yhB4D-9ykAo3-9yhB5x-9yhB1P-9yhBai-9yhB2F-9yhBaZ-9ykAbd-ctaQpd-aeYwaF-agbZ2u-agbYX7-agbYUQ-afAjTi-afAjX4-afD6Zd-afD6P1-afD6KS-agbZuW-agbZBE-afAkka-9yhBdc-9ykAgE-9TEL2r-aeYvN4-af2jtf-aeYvZM-aeYwn2-ahiXuz-ahiXyt-ahmJ6w-ag9eVe-ag9eSV-agbZR3-agbZVU-ag9eN4-agbZMy-9Nsggq-afoRn4-dsK5VU">Flickr/Florian Simeth</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>It turns out that the <a href="http://www.humanservices.gov.au/corporate/publications-and-resources/budget/1415/measures/job-seekers/64-90066">policies for under 30s</a> in the federal budget in May were a precursor to a <a href="http://www.theaustralian.com.au/national-affairs/policy/search-and-work-to-keep-the-dole/story-fn59noo3-1227003575905">much wider set of changes</a> affecting unemployed people across the board. These are just now coming to light. While people aged 30 and over won’t have to face a potential <a href="http://www.dss.gov.au/about-the-department/publications-articles/corporate-publications/budget-and-additional-estimates-statements/2014-15-budget/budget-fact-sheet-working-age-payments">six-month wait to receive payments</a>, nevertheless the Newstart unemployment payment is to become a much more conditional payment, with a considerably tougher set of eligibility requirements.</p>
<p>As a reminder, the full payment for a single person for <a href="http://www.humanservices.gov.au/customer/services/centrelink/newstart-allowance">Newstart Allowance is $255.25</a> a week. The rate of payment has been widely criticised as inadequate by many groups including <a href="http://www.acoss.org.au/media/release/oecd_joins_growing_call_for_increase_in_newstart_allowance">the OECD</a> and <a href="http://www.bca.com.au/publications/submission-to-the-senate-inquiry-into-the-adequacy-of-the-allowance-payment-system-for-jobseekers-and-others">the Business Council of Australia</a>, which makes the point that its low level is actually a barrier to effective job searches and employment.</p>
<p>Nevertheless, <a href="https://ministers.employment.gov.au/abetz/new-employment-services-model-drive-stronger-job-outcomes">the government is proposing</a> to make sure recipients “earn” every cent of this payment through an expanded “work for the dole” program for recipients up to the age of 49. People aged 50-60 will be required to undertake an “approved activity” under “mutual obligation”. Another new obligation is that people receiving Newstart will have to apply for around 10 jobs a week or 40 a month, roughly double the current requirement.</p>
<p>In fairness, the government is also saying that it will improve the employment services system to help people in their work search endeavours. This has been a theme for as long as I can remember in government efforts to increase employment services outcomes since the mid-1980s. But, however “effective and efficient” the service provider can be made, receiving a Newstart Allowance will be a singularly tough gig for anyone unfortunate enough to lose a job, or to be looking for a job after finishing a stint in education and training.</p>
<p>Greater “work for the dole” and work search requirements also have far-reaching implications for employers and organisations who host “work for the dole” programs.</p>
<h2>More applications does not make more jobs</h2>
<p>The overall unemployment rate is now <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6202.0Main+Features1Jun%202014?OpenDocument">6%, and 13.5% for 15-24 year olds</a>. In May there were <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6354.0Main+Features1May%202014?OpenDocument">146,000 job vacancies</a> with <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/FF34E6CB6EEC7E3BCA257D100013F3D8?opendocument">720,000 people</a> unemployed. Another <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0May%202014?OpenDocument">920,000</a> were underemployed and wanting more hours of work. Underemployment is a very important labour market indicator as, under the terms of internationally agreed labour statistics collection, an individual is counted as employed if <a href="http://www.abs.gov.au/ausstats/abs@.nsf/Previousproducts/6202.0Main%20Features999Feb%202012?opendocument&tabname=Summary&prodno=6202.0&issue=Feb%202012&num=&view=#EMPLOYMENT">working one hour a week</a> for pay or profit. </p>
<p>Altogether, these figures mean 1.64 million people who have no work or not enough work are potentially competing for available job vacancies.</p>
<p>While the labour force underutilisation rate of <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Jun%202014?OpenDocument">13.5%</a> suggests that there are around 10 potential job applicants for each vacancy, we need to consider that some sectors of employment will have very large pools of applicants. This applies especially to those jobs with broader skills requirements. </p>
<p>This is the core reality of the Australian job market. The intensification of job search requirements means people receiving Newstart will be coerced into applying for many jobs that they have very <a href="https://theconversation.com/an-800-000-plus-jobs-gap-between-welfare-to-work-and-reality-22226">little chance of obtaining</a>.</p>
<p>No one suggests that they shouldn’t be doing what they can to find a job, but futile applications for jobs serve no purpose but to tick the boxes to receive a payment. It is an immense strain on the unemployed person – as if being unemployed and living on Newstart isn’t hard enough.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/55008/original/djpggz49-1406524069.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/55008/original/djpggz49-1406524069.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=678&fit=crop&dpr=1 600w, https://images.theconversation.com/files/55008/original/djpggz49-1406524069.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=678&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/55008/original/djpggz49-1406524069.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=678&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/55008/original/djpggz49-1406524069.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=852&fit=crop&dpr=1 754w, https://images.theconversation.com/files/55008/original/djpggz49-1406524069.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=852&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/55008/original/djpggz49-1406524069.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=852&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Employers can expect to sort through hundreds of applications completed by job seekers having to submit 40 a month.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/124247024@N07/14066879786/in/photolist-nr3otG-nt5R5k-nr3rh7-nbAtzw-nsNqiV-nt5NFc-nuRP1T-nbAnRt-nt5Nxr-nbAwRv-nr3oBN-nbAsd5-nbAtCr-nt8c1N-nsNpaH-nbAsku-nbAw4b-nt5PNH">Flazingo.com/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>The government might also consider the burden it imposes on employers and employment service providers. Many employers will be inundated with unsuitable applicants. We might speculate that they will be less inclined to advertise positions attracting hundreds of applicants, perhaps opting for more informal means of recruitment.</p>
<p>At the same time, employment service providers will be tasked with pushing unemployed people into inappropriate job search efforts.</p>
<p>A further consideration is how “work for the dole” is to be expanded. Having worked in a number of NGOs, I am well aware that it is no simple task to take on a “volunteer” in terms of supervision and support; even more so someone who is mandated to do unpaid work so that they have some income to live on. It is an invidious and very unpleasant scenario for <a href="https://employment.gov.au/work-dole">the type of organisations</a> that the government wishes to impose on for “work for the dole” places. </p>
<p>And as economist Jeff Borland <a href="https://theconversation.com/work-for-the-dole-doesnt-work-but-here-is-what-does-22492">has pointed out</a> in The Conversation, the outcomes of “work for the dole” program are very weak and largely a waste of time. </p>
<p>The question then must be asked: what is the government trying to achieve? Certainly, the outcome of its new policies for under 30s and the imminent policies for anyone on Newstart will be more stigmatisation for being unemployed, and more deterrence to making claims for payments.</p>
<p>Perhaps, there are some other motives related to long-term reduction in minimum wages, with more people prepared to work under the counter just to survive, as suggested in a thoughtful article by Fiona Scott-Norman in <a href="http://www.thebigissue.org.au/">The Big Issue</a> (July 4-17).</p>
<h2>The final word on being unemployed</h2>
<p>It’s worth recalling that it is very hard now being unemployed and in receipt of Newstart. I will let a woman in her early 50s who I interviewed for my doctoral research have the final word:</p>
<blockquote>
<p>On Newstart there is constant pressure. Most of my time [is] taken up with job searching. In this time (three years) I have applied for over 600 jobs with a rate of one interview for every ten jobs I applied for. And out of these, resulted in two jobs … but only lasted the extent of probation. I found myself underperforming due to depression and lack of confidence.</p>
</blockquote>
<p>By the way, she had a university degree and had worked many years in the public sector. </p><img src="https://counter.theconversation.com/content/29743/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Veronica Sheen does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It turns out that the policies for under 30s in the federal budget in May were a precursor to a much wider set of changes affecting unemployed people across the board. These are just now coming to light…Veronica Sheen, Research Associate, School of Social Sciences, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/283922014-07-15T19:54:05Z2014-07-15T19:54:05ZThe B20, job creation and the importance of being human<figure><img src="https://images.theconversation.com/files/53873/original/frprf4rt-1405402405.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Business leaders would prefer to align job skills with labour shortages.</span> <span class="attribution"><span class="source">Image sourced from www.shutterstock.com</span></span></figcaption></figure><p>The <a href="http://www.b20australia.info/Pages/B20-2014-Leadership.aspx">B20 business leaders</a> meeting this week in advance of <a href="https://www.g20.org/">November’s G20 summit</a> play an important role in advising on what to do about those intractable global issues of <a href="https://www.g20.org/about_G20">economic growth and job creation</a>.</p>
<p>The B20 especially focuses on <a href="http://www.b20australia.info/priorities-1">the recipe</a> for “doing business”: improving financial systems and access to business credit, promoting investment in infrastructure, and reducing trade barriers. One of the four stated priorities for the B20 is considering “human capital” in the formula of what’s needed for job creation and growth.</p>
<p>The <a href="http://www.b20russia.com/B20_WhiteBook_web.pdf">position of the 2013 B20</a> following its deliberations in Russia last year was that vocational training and university education must be consistently aligned with labour market needs and practical requirements. </p>
<p>It also advocated a high level of business sector involvement in educational policy, curricula development and delivery. It says that education must be more highly focused on basic literacy and numeracy as well as the STEM competencies – science, technology, engineering and mathematics.</p>
<p>For its <a href="http://www.b20australia.info/priorities-1">2014 deliberations in Australia</a>, the B20’s specific human capital interests cover long-term and youth unemployment, jobless growth and the impact of automation and robotics.</p>
<p>So how does Australia square up on this agenda on “human capital” in current policy directions? And is its recipe one we would want to follow in any case?</p>
<h2>Business role in education and training</h2>
<p>Skilling up young people to step seamlessly from education to work is certainly a desirable goal. The formula advocated by the B20 is heavily oriented towards present workforce needs and strong involvement of business, echoing the 2010 joint G20/International Labour Organisation (ILO) paper <a href="http://www.oecd.org/g20/topics/employment-and-social-policy/G20-Skills-Strategy.pdf">A Skilled Workforce for Strong, Sustainable and Balanced Growth</a>. </p>
<p>However the same paper further on also says: </p>
<blockquote>
<p>Experience from various countries provides important lessons on the limits of skills forecasting: crucially, that it is better to focus on providing adaptable core, transversal skills, and especially on building the capacity to learn, than on planning training to meet detailed forecasts of technical skill requirements, because these may change before curricula can adjust.</p>
</blockquote>
<h2>Where is the jobs growth?</h2>
<p>The table below shows half of Australia’s workforce is in health care and social assistance, education and training, wholesale trade, retail trade, construction and manufacturing. There has been little change in this over the last 30 years.</p>
<p>While manufacturing has declined, more employment is found in health care and social assistance and education and training. While employment in the professional, scientific and technical industry grouping has doubled, it remains a relatively small area of employment. </p>
<p>And, for all the buzz about employment in information technology, media and telecommunications, it remains a tiny sphere of employment and has not grown in the last 30 years. We might also note that in 2014 around 10% of the workforce is in industries designated as administration and 7% in accommodation and food services.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/53879/original/yhw3hrd3-1405405150.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/53879/original/yhw3hrd3-1405405150.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=347&fit=crop&dpr=1 600w, https://images.theconversation.com/files/53879/original/yhw3hrd3-1405405150.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=347&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/53879/original/yhw3hrd3-1405405150.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=347&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/53879/original/yhw3hrd3-1405405150.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=436&fit=crop&dpr=1 754w, https://images.theconversation.com/files/53879/original/yhw3hrd3-1405405150.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=436&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/53879/original/yhw3hrd3-1405405150.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=436&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>What will the Australia B20 make of these facts? As the recently released <a href="http://www.dss.gov.au/our-responsibilities/review-of-australia-s-welfare-system/a-new-system-for-better-employment-and-social-outcomes-full-version-of-the-interim-report">Welfare Review</a> report points out, 90% of Australian employment is in the services sector and in the next five years, half the jobs growth will be in health care and social assistance, retail trade and construction. Aged and disability care will be particularly strong growth areas with the introduction of the <a href="http://www.ndis.gov.au/">National Disability Insurance Scheme</a> and of course, the result of population ageing.</p>
<p>The focus on STEM competencies in the formula for human capital development is strongly linked to economic growth aspirations resulting from their innovation potential. But the extent to which the education and training system can prioritise these skill sets is questionable. </p>
<p>And can the Australian science and technology industry sectors sustain a flood of new candidates for jobs? With <a href="https://theconversation.com/planning-for-survival-is-not-enough-for-success-in-australian-research-27911">government policy</a> reducing expenditures and workforces in key institutions <a href="https://theconversation.com/australia-needs-fundamental-research-to-build-a-great-country-20031">such as the CSIRO, and in research funding</a>, such jobs will be much harder to find.</p>
<p>The 2010 G20/ILO competencies in analytical skills involving creativity, problem-solving, communication, teamwork and entrepreneurship will be especially important in the evolving Australian labour market. These would also seem to be the skills that would help young people create their own enterprises, another core interest of the B20.</p>
<h2>Youth unemployment – no quick fix</h2>
<p>There is an air of crisis in the international community about youth unemployment in the aftermath of the global financial crisis. The G20/B20 concerns are echoed by the <a href="http://www.weforum.org/content/global-agenda-council-youth-unemployment-2012-2014">World Economic Forum</a>, <a href="http://ec.europa.eu/social/main.jsp?catId=1036">the European Commission</a>, <a href="http://www.oecd.org/employment/unemployment-set-to-remain-high-in-oecd-countries-through-2014youth-and-low-skilled-hit-hardest.htm">the OECD</a>, <a href="http://www.imf.org/external/pubs/ft/survey/so/2013/NEW101713A.htm">the IMF</a>, and <a href="http://www.ilo.org/global/topics/youth-employment/lang--de/index.htm">the ILO</a>.</p>
<p>B20 and the IMF make much of the skills mismatch between young people and the job market, assuming the education system is failing to keep up with the new skills needed.</p>
<p>But this is not really supported when considering the composition of the workforce in Australia and the growth in the service sector, particularly in health care. </p>
<p>Other factors that have nothing to do with new types of jobs tend to be overlooked. For instance, unemployment amongst youth is high because there are simply not enough jobs for all who want them, with new entrants competing with experienced contenders. </p>
<p>As economist <a href="https://theconversation.com/unemployment-is-hitting-youth-hard-this-is-what-we-should-do-27590">Jeff Borland</a> has consistently pointed out, the best remedy for youth unemployment is jobs growth. It is also worth noting the current high levels of youth unemployment - <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Jun%202014?OpenDocument">around 12-13%</a> - mirror those from the late 1970s. Youth unemployment rates were at the lowest in Australia prior to the GFC but have reverted to what they were across the 1980s and 1990s.</p>
<p>Also impacting on accessibility to jobs for young people is how these jobs are organised and performed. New technologies such as robotics and automation are compressing and reconfiguring jobs, rather than creating new ones. </p>
<p>This transformation, rather than a skill mismatch, may represent the greater challenge facing young people. </p>
<p>The reality is that there may be no “quick fixes” for youth unemployment, apart from sustained jobs growth.</p>
<p>What society should be doing for them is providing them with every possible support, including income support, to allow them to find sustainable work consistent with their education and training. The government’s new suite of welfare policies targeting people under 30 is a retrograde step in helping them adjust to the contemporary world of work. </p><img src="https://counter.theconversation.com/content/28392/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Veronica Sheen does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The B20 business leaders meeting this week in advance of November’s G20 summit play an important role in advising on what to do about those intractable global issues of economic growth and job creation…Veronica Sheen, Research Associate, School of Social Sciences, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/288392014-07-08T20:18:16Z2014-07-08T20:18:16ZWhen job seekers outnumber jobs 5 to 1, punitive policy is harmful<p>The prime object of welfare reform should be to increase the well-being of people rather to <a href="http://kevinandrews.dss.gov.au/media-releases/142">reduce public expenditure</a>. Good policy should be able to achieve both goals over the longer term. Too many current proposals, however, are likely to cause damage that increases costs and affects social cohesion.</p>
<p><a href="https://theconversation.com/welfare-review-fails-to-understand-australias-labour-market-28587">Proposed policies</a> in the budget and McClure report that focus on cutting income support or tightly controlling recipients’ spending are highly unlikely to achieve either of the above goals. Instead, they will create a subgroup of people with no income and/or suffering further stigma because they are denied control over basic decisions.</p>
<p>The Australian’s post-budget <a href="http://www.theaustralian.com.au/opinion/editorials/australias-intractable-welfare-state-of-mind/story-e6frg71x-1226924545128?nk=4002e994c4d2fb13fdb83940be7944f3">editorial</a> echoes the official view on welfare, but this approach disregards the factual evidence of whether this is likely to produce effective policy:</p>
<blockquote>
<p>As Mr Hockey has argued, welfare is meant to provide a safety net, not become a cargo net. Australians know that our most vulnerable will be looked after; governments should help the poor and disadvantaged, but those who can work or provide for themselves should not be discouraged to do so.</p>
</blockquote>
<p>The proposals are a further move away from the postwar consensus on the need for a welfare state. That derived from the political damage done by high unemployment and inequalities in the lead-up to the Second World War. In a time when inequality is again alarming <a href="https://www.imf.org/external/np/speeches/2014/052714.htm">even the International Monetary Fund</a> (IMF), we need to examine whether the risks of introducing both savage cuts and spending controls exceed the possible benefits. </p>
<h2>A false assumption of blame</h2>
<p>The welfare policy shift seems to be based on a more individualised view of unemployment rather than a social or structural analysis. The faults are seen as being on the supply side of labour, not with the lower demand for labour generally. Unemployment is assumed to be the result of problematic job seekers who fail to get a job and/or live disordered lives.</p>
<p>Policy makers should be aware that there are, at least, <a href="http://www.smh.com.au/federal-politics/political-news/head-east-for-the-jobs-new-data-reveals-20140626-3awgl.html#ixzz35zU1eg2x">five unemployed job seekers for every official job vacancy</a>. The official Australian Bureau of Statistics (ABS) count excludes job changers or non-active seekers willing to take one, so the ratio of job competitors to jobs could be twice as high. This means the chances of success are very limited, particularly for those who are not well qualified, lack recent experience or encounter employer prejudices.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/53160/original/qf3dm2gj-1404714983.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/53160/original/qf3dm2gj-1404714983.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=291&fit=crop&dpr=1 600w, https://images.theconversation.com/files/53160/original/qf3dm2gj-1404714983.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=291&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/53160/original/qf3dm2gj-1404714983.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=291&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/53160/original/qf3dm2gj-1404714983.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=366&fit=crop&dpr=1 754w, https://images.theconversation.com/files/53160/original/qf3dm2gj-1404714983.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=366&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/53160/original/qf3dm2gj-1404714983.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=366&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Australia’s 146,000 job vacancies amount to barely a fifth of the total of 717,000 people recorded by the ABS as unemployed.</span>
<span class="attribution"><a class="source" href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/6354.0">Australian Bureau of Statistics, May 2014 Job Vacancies, Australia (cat. no. 6354.0) </a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Heavying those who are unlikely to succeed in such circumstances is pointless and punitive. Yet proposed “reforms” clearly assume that younger people need their welfare income cut because they are not properly trying to find paid work. </p>
<p>The clear example is the budget proposal of a six-month wait for unemployment benefits for those under 30. Less known is a proposal before the Senate to cut payments for those who miss appointments with job agencies or are seen as not pursuing a job deemed suitable by Centrelink. These often futile processes are difficult to negotiate and <a href="http://www.smh.com.au/comment/centrelink-is-designed-to-fail-the-most-vulnerable-20140706-zsuvj.html">often totally unproductive</a>.</p>
<p>The <a href="http://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r5275_ems_ec0c3bac-7d58-4e74-a43c-af3d769345d5/upload_pdf/394955.pdf;fileType=application%2Fpdf#search=%22legislation/ems/r5275_ems_ec0c3bac-7d58-4e74-a43c-af3d769345d5%22">explanatory memorandum</a> to that legislation shows the lawmakers’ view on rights. It states:</p>
<blockquote>
<p>Article 6 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right to work. This includes the right to the opportunity to gain a living by work which the person freely chooses or accepts and is considered an inherent part of human dignity.</p>
</blockquote>
<p>That sounds good but further down the tone changes as the right to work becomes an obligation:</p>
<blockquote>
<p>The imposition of an eight-week non-payment for refusing an offer of suitable work does not unreasonably restrict the right to freely choose or accept work … </p>
</blockquote>
<p>People long out of work may have many reasons for failure to comply but the possibility of these being considered is now limited and <a href="http://news.smh.com.au/breaking-news-national/alarming-jump-in-centrelink-breaches-20110418-1dl6c.html">extra employment is not the outcome</a>.</p>
<h2>Policy bereft of supporting evidence</h2>
<p>Another aspect of this punitive approach is income management (IM). Despite the lack of any evidence of its benefits, as well as high administrative costs, ideological beliefs of recipient incompetence are pushing expansion.</p>
<p>While the above changes cut spending costs, in this case an expensive program is being expanded. The budget allocated A$100 million to extend income management for the next 12 months with suggestions of further expansion. </p>
<p>Administration costs amount to over $3500 per person for the 28,000 current recipients. The costs come from policing the spending of more than 50% of their income support. This expensive option relies on assumptions about the incompetence of the recipients. </p>
<p>The reasoning <a href="http://www.dss.gov.au/sites/default/files/documents/06_2014/dss006_14_exec_summary_26_june_2014_tagged.pdf">is described</a> in the McClure report:</p>
<blockquote>
<p>Consideration should be given to incorporating income management as part of a package of support services available to job seekers who need to stabilise their circumstances and develop a pathway to work or study. </p>
</blockquote>
<p>Little clear evidence exists to justify this program. A <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook44p/IncomeManagement">parliamentary briefing note says</a>:</p>
<blockquote>
<p>Income management has been a controversial welfare reform. While conditions have always been applied to eligibility for welfare payments, restrictions on how payments may be spent are a new development, criticised by some as paternalist and stigmatising. Income management is also relatively expensive to administer, with an estimated cost up to 2014–15 in the range of $1 billion. </p>
</blockquote>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/53162/original/nhkbccyc-1404716222.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/53162/original/nhkbccyc-1404716222.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=426&fit=crop&dpr=1 600w, https://images.theconversation.com/files/53162/original/nhkbccyc-1404716222.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=426&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/53162/original/nhkbccyc-1404716222.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=426&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/53162/original/nhkbccyc-1404716222.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=536&fit=crop&dpr=1 754w, https://images.theconversation.com/files/53162/original/nhkbccyc-1404716222.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=536&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/53162/original/nhkbccyc-1404716222.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=536&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Seven years after its first roll-out, the evidence for income management is weak at best.</span>
<span class="attribution"><span class="source">Centrelink</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Other reports find little evidence of benefits. A government-funded evaluation of the seven-year-old Northern Territory versions of IM <a href="http://www.dss.gov.au/our-responsibilities/families-and-children/programs-services/income-management/evaluating-new-income-management-in-the-northern-territory-first-evaluation-report">failed to show clear outcomes</a>, as in many earlier reports.</p>
<p>At best, some participants said they have had good experiences. Many others reported seriously negative experiences. The report concluded:</p>
<blockquote>
<p>There are few, if any, strong and consistent impacts of NIM; rather, there have been diverse outcomes. This is reflected in the wide and inconsistent range of views and experiences of income management. </p>
</blockquote>
<p>On the basis of these and other similar reports, it is hard to justify an extended version, let alone its continuation.</p>
<h2>Focus on structures not the individual</h2>
<p>The evidence is that long-term non-employment is more about social and physical barriers than the character of the job seeker, so the justification for punitive approaches becomes less convincing. The potential damage to those on the receiving end of extra cuts and controls may well create greater costs in the longer term.</p>
<p>If we had a welfare program based on assumptions that society has failed most of those who need income support, it would look very different. Stigmatising the many recipients because a few may not be enthusiastic seekers of non-existent jobs does not justify wholesale cuts. </p>
<p>Similarly, infantilising income recipients because a few need or want help with financial issues is wrong. They could be offered cheaper voluntary assistance through Centrepay, without losing the right to control their spending. </p>
<p>Policy proposals need to be tested against solid criteria. There is no evidence that reducing and controlling spending capacity are effective remedies for the unemployed. </p>
<p>Blaming the victims may be <a href="https://theconversation.com/safe-seats-are-more-likely-to-have-a-work-for-the-dole-pilot-27914">politically useful</a> but obscures the real issues. These include a shortage of jobs and barriers to work created by employer prejudices. The risks include damaging the vulnerable by encouraging hostile public responses to their needs and reinforcing their lack of self-worth.</p><img src="https://counter.theconversation.com/content/28839/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eva Cox does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The prime object of welfare reform should be to increase the well-being of people rather to reduce public expenditure. Good policy should be able to achieve both goals over the longer term. Too many current…Eva Cox, Professorial Fellow Jumbunna IHL, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/279142014-06-26T20:46:38Z2014-06-26T20:46:38ZSafe seats are more likely to have a work for the dole pilot<figure><img src="https://images.theconversation.com/files/51823/original/36nx9s4h-1403482137.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The probability of receiving a work for the dole pilot is much higher in non-marginal electorates, regardless of the level of actual youth unemployment.</span> <span class="attribution"><span class="source">AAP/Julian Smith</span></span></figcaption></figure><p>In July, the federal government will begin a series of pilot programs for its <a href="https://employment.gov.au/work-dole">work for the dole</a> scheme <a href="http://www.employment.gov.au/work-dole-selected-areas-locations">across Australia</a>. All job seekers aged 18 to 30 who have been unemployed for more than a year and have a work experience requirement will either participate in this program or have their income support payments reduced or stopped.</p>
<p>The program is controversial – for good reason. First, it probably won’t work. Instead, it is likely to harm the people it applies to. We can anticipate this because the Howard government experimented with work for the dole programs in the 1990s and early 2000s. In a <a href="https://www.melbourneinstitute.com/downloads/working_paper_series/wp2004n14.pdf">2004 study</a>, University of Melbourne economists Jeff Borland and Yi-Ping Tseng found that participants in the old work for the dole scheme were less likely to exit unemployment payments. </p>
<p>In other words, the only real evidence we have about these work for the dole programs shows they are likely to cause harm to an arbitrarily targeted subset of the population. Australia already has one of the <a href="http://www.oecd-ilibrary.org/social-issues-migration-health/eligibility-criteria-for-unemployment-benefits_5k9h43kgkvr4-en">least generous</a> unemployment benefits schemes in the OECD, with some of the strictest job search and monitoring requirements.</p>
<p>The crucial question is whether young people are actually the problem. If youth unemployment were truly a crisis, we would expect young people to make up a large proportion of the total unemployed in Australia. The graph below shows the trend in the proportion of the total unemployed in Australia aged 15-24 years old since 1978.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/50875/original/rnx3rsg5-1402534329.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/50875/original/rnx3rsg5-1402534329.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/50875/original/rnx3rsg5-1402534329.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/50875/original/rnx3rsg5-1402534329.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/50875/original/rnx3rsg5-1402534329.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/50875/original/rnx3rsg5-1402534329.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/50875/original/rnx3rsg5-1402534329.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/50875/original/rnx3rsg5-1402534329.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Proportion of unemployed persons aged 15-24 years old: 1978-2014.</span>
<span class="attribution"><span class="source">A loss smoother is applied to data from the Australian Bureau of Statistics cat. no. 6202.0. </span></span>
</figcaption>
</figure>
<p>The proportion of unemployed persons aged 15-24 years is at one of the lowest levels in the past 30 years. However, some areas of Australia do have unusually high rates of youth unemployment. As a result, we would certainly expect the new work for the dole pilot programs to be targeted at these areas. The government’s <a href="http://employment.gov.au/work-dole-selected-areas-frequently-asked-questions-job-seekers">justification</a> for selecting the pilot regions was because:</p>
<blockquote>
<p>… they represent a broad cross section of metropolitan and non-metropolitan locations with varying labour markets and typically have high rates of youth unemployment. </p>
</blockquote>
<p>To explore this claim, I mapped the government’s work for the dole target areas to the Australian Electoral Commission’s boundaries and used Parliament House’s <a href="http://goo.gl/PzU8DR">concordance table</a> to overlay the youth unemployment statistics for small geographic areas published by the Australian Bureau of Statistics (ABS). </p>
<p>The regions targeted for work for the dole pilots correspond to 42 electorates scattered across Australia and the levels of youth unemployment are not unusually high in these areas. A simple random sample of 42 electorates yields an average youth unemployment rate approximately equal to the rate observed in work for the dole electorates. </p>
<p>This suggests the choice of work for the dole zones was not strongly related to the youth unemployment rate, a result also found by Borland and Tseng’s 2004 study for the rollouts under the Howard government.</p>
<p>So, was the choice of work for the dole regions related to electoral politics? If we assume parties are rational and seek to maximise their number of seats, it’s reasonable to assume they are less likely to implement controversial policies if the potential consequences include a loss of political support. </p>
<p>Such consequences will be acutely felt in marginal electorates, where the loss of political support can mean the loss of political power. If I was a Coalition MP in a marginal electorate I certainly wouldn’t want to justify one of these work for the dole programs to my constituents, given what we know about work for the dole’s effectiveness.</p>
<p>The graph below shows the predicted probabilities (solid lines) and 90% confidence intervals (bands) associated with receiving a work for the dole pilot (y-axis) as a function of youth unemployment (x-axis) for marginal (red) and non-marginal (blue) electorates.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/50887/original/rb6b5gms-1402535959.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/50887/original/rb6b5gms-1402535959.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/50887/original/rb6b5gms-1402535959.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=557&fit=crop&dpr=1 600w, https://images.theconversation.com/files/50887/original/rb6b5gms-1402535959.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=557&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/50887/original/rb6b5gms-1402535959.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=557&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/50887/original/rb6b5gms-1402535959.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=700&fit=crop&dpr=1 754w, https://images.theconversation.com/files/50887/original/rb6b5gms-1402535959.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=700&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/50887/original/rb6b5gms-1402535959.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=700&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Predicted probabilities of receiving work for the dole pilot programs by youth unemployment and marginal electorate.</span>
<span class="attribution"><span class="source">Predicted probabilities and 90% confidence intervals from a logistic regression of work for the dole indicator on average youth unemployment rate (from four ABS small area Labor force surveys in 2014) plus an indicator for marginal electorate.</span></span>
</figcaption>
</figure>
<p>The estimated probability of receiving a work for the dole pilot is much higher in non-marginal electorates, regardless of the level of actual youth unemployment. The estimated probability for marginal electorates with an average level of youth unemployment is approximately 5% and 30% for non-marginal electorates with the same level of youth unemployment. </p>
<p>This association likely reflects the political danger of delivering unpopular policies to electorates with political power. So why bother with the work for the dole scheme at all? </p>
<p>The work for the dole program, like many aspects of the May budget, can serve a valuable function for the increasingly radical conservative movement in Australia. The narrative that young people are enjoying a <a href="http://goo.gl/1wc7Hw">“social security endless summer”</a> is an emotionally affective myth that puts youth in the “other” category. </p>
<p>It would probably be impossible to sustain the movement against welfare if the face of the “age of entitlement” was a grandmother collecting a pension or a poor young white family. “Earn or learn” is another rallying cry for the conservative base.</p><img src="https://counter.theconversation.com/content/27914/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kyle Peyton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In July, the federal government will begin a series of pilot programs for its work for the dole scheme across Australia. All job seekers aged 18 to 30 who have been unemployed for more than a year and…Kyle Peyton, Research Fellow, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/275902014-06-19T20:57:49Z2014-06-19T20:57:49ZUnemployment is hitting youth hard: this is what we should do<figure><img src="https://images.theconversation.com/files/51302/original/k2mjxc37-1402981358.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">More than one-third of unemployed people are aged 15 to 24, a critical period in their lives. </span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-82004164/stock-photo-sad-man.html?src=pp-photo-110533634-vzxUmhTHpQDJt-tYMBbB6g-2">luxorphoto/Shutterstock</a></span></figcaption></figure><p>Australia came out of the global financial crisis better than most industrialised countries, but did not escape altogether. With a weaker economy, the unemployment rate rose from about 4% to 6% between 2008 and 2009. It has remained around that level since then, and the longer unemployment remains at this level, the greater the costs it imposes on those affected.</p>
<p>The young are <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1314/QG/YthUnemployment">particularly disadvantaged</a> by the current unemployment rate. This is not unexpected, as the young always fare worst in downturns.</p>
<p>Slowing economic activity reduces the rate of creation of new jobs. At any point in time, the young, who are making the transition from education to work, account for a disproportionate share of job seekers. Therefore, they are also <a href="http://au.ibtimes.com/articles/548111/20140415/youth-unemployment-rate-australia-hits-12-5.htm#.U5-_IJSSxJ1">most affected</a> by the declining availability of jobs. </p>
<p>In May 2012, the rate of unemployment for 15 to 19-year-olds was 18.8%; and for the broader group of 15 to 24-year-olds it was 13.1%. This compares to an unemployment rate of 5.8% for the population aged 15 to 64 years. </p>
<p>Long-term unemployment also becomes a more severe problem as the economic downturn lengthens. Of those 15 to 24-year-olds who were unemployed in May 2012, more than 25% had been unemployed for 12 months and longer.</p>
<p>These numbers have <a href="https://theconversation.com/why-rising-youth-unemployment-demands-our-urgent-attention-25990">attracted growing attention</a> to the labour market problems facing young Australians today. The main point of discussion has been how to assist the young unemployed and those who will make their transition to the labour market in coming years to obtain employment.</p>
<h2>Focus on help, not blame</h2>
<p>It is important to recognise that the main influence on their employment prospects is outside their control. This is the rate of economic growth. It determines the pace at which jobs are created, and therefore the unemployment rate. <a href="https://sites.google.com/site/borlandjum/labour-market-snapshots">Recent research</a> I have done shows that virtually all of the increase in Australia’s rate of unemployment since the start of 2008 can be explained by slower economic growth. </p>
<p>Once the rate of economic growth becomes sufficient to generate a higher rate of job creation, it is young job seekers who will benefit most. Being the largest share of job searchers, they will get the largest share of the new jobs. Therefore, the employment rate of the young will increase, and their unemployment rate will decrease by more than for the rest of the population.</p>
<p>The best way for a government to reduce youth unemployment then is to keep economic growth as high as possible. The other main way to improve labour market outcomes for the young unemployed is through targeted programs that make them “job ready” and create pathways to employment. Programs that provide these services to the young unemployed can increase their opportunities to move into work when extra jobs become available. </p>
<p>There is, however, a problem. Having programs targeted to improve outcomes for the young unemployed sounds good in theory, but the practice has been more difficult. Designing programs that work has been a major challenge.</p>
<p>It is this challenge, and the challenge of long-term unemployment more generally, that was taken up this month by the <a href="http://socialventures.com.au/">Social Ventures Australia</a> (SVA) “Employment Dialogue”. With the theme “Building better futures for those experiencing long-term unemployment”, the event brought together representatives of leading welfare agencies, service providers for the unemployed, major business groups, as well as SVA members. </p>
<p>At a time when the federal government’s best idea is to go back to the <a href="http://theconversation.com/work-for-the-dole-doesnt-work-but-here-is-what-does-22492">failed model of Work for the Dole</a>, the discussion at the Employment Dialogue was refreshing and inspiring. </p>
<p>Speakers from very different backgrounds provided a broad range of ideas on what would be good policy that were striking for how much they had in common. Putting these ideas together provides the possibility of a new approach to designing policies to improve labour market outcomes for the long-term unemployed as well as those about to move into the labour market.</p>
<h2>Policies to help young workers</h2>
<p>Here’s my summary of the main ideas from the Employment Dialogue about policy design: </p>
<ul>
<li><p>Assistance to the unemployed should ideally involve a job placement. This is the best pathway to long-term employment and the best context for increasing skills.</p></li>
<li><p>Many employers are willing to support initiatives to improve outcomes for the unemployed; for example, by providing job placements. A prerequisite for employers to offer placements is that they want workers who already have basic capabilities needed for work. They are happy to partner not-for-profits/service providers who can do the work of giving the unemployed those basic capabilities. An example profiled on the day was a partnership between Leighton Contractors and Beacon Foundation and CareerTrackers.</p></li>
<li><p>Not-for-profits can also successfully create job placements that improve the employment prospects of young unemployed. A leading example is the STREAT program which provides young jobless homeless youth with the training and skills for a career in the hospitality sector.</p></li>
<li><p>To support building relationships between business and not-for-profits or service providers it is necessary to have a local or decentralised model of assistance for the unemployed and the young who are making the transition from education to work. </p></li>
<li><p>Part of the local assistance to young people making the transition from education to work should be a greater role for schools and suppliers of tertiary education in providing opportunities to engage with the workplace. For example, having more information on work options allows students to make better study choices and provides greater motivation for study.</p></li>
<li><p>Training and obtaining a formal qualification can be an important part of improving outcomes for the unemployed, but the incentives to undertake training and the value of training are greatest when it is matched to a job placement.</p></li>
<li><p>All this can only happen if we have government funding that supports a decentralised model of assistance to the young unemployed. Any funding model should require that specified outcomes be achieved, but must also allow greater flexibility and less bureaucracy than current government schemes. </p></li>
<li><p>The government funding model should recognise that “you get what you pay for”. Some young unemployed have a substantial level of disadvantage, which will require significant spending for them to acquire basic capabilities for employment. Therefore, it is necessary to take a long-run approach to benefit-cost in evaluating this type of spending.</p></li>
<li><p>It is important to make more effort to do rigorous evaluation of programs that seek to assist the unemployed, as a basis for refining our knowledge of what is most effective.</p></li>
</ul>
<p>Applying these principles to the design of programs for young unemployed would be a big step forward in Australia. It would give us a good chance of, as one participant put it at the Employment Dialogue, “getting money to where it will be most effective and starting to make a difference”.</p>
<hr>
<p><em>See the rest of the Another Country: Youth in Australia series <a href="https://theconversation.com/topics/youth-in-australia">here</a>.</em></p><img src="https://counter.theconversation.com/content/27590/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jeff Borland has received funding from the ARC to undertake research on the operation of the Australian labour market. He attended the SVA Employment Dialogue as an invited participant.</span></em></p>Australia came out of the global financial crisis better than most industrialised countries, but did not escape altogether. With a weaker economy, the unemployment rate rose from about 4% to 6% between…Jeff Borland, Professor of Economics , The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/278102014-06-13T03:32:05Z2014-06-13T03:32:05ZAs G20 host, our welfare policy is exposed to an unflattering light<p>Australia is <a href="https://www.g20.org/">hosting the G20</a> this year and showcasing to the world its approach to welfare policy: <a href="http://www.dss.gov.au/about-the-department/publications-articles/corporate-publications/budget-and-additional-estimates-statements/2014-15-budget/budget-fact-sheet-working-age-payments">deny young people income support</a> for up to six months and instead make more food vouchers available. This is a bizarre and certainly remarkable innovation on the traditional role of democratic governments to govern in the public interest. </p>
<p>Since the end of World War Two, when the international community established the public institutions of capitalist prosperity, we have thought that high youth unemployment is a bad thing, that homelessness is to be deplored and that poverty is a social evil to be remedied. Yet Australia has a government designing policies that will increase these, even making <a href="http://www.abc.net.au/news/2014-06-05/500000-australians-may-need-emergency-aid-after-budget-cuts/5501532">budgetary allowances for emergency relief</a>. These are policies <a href="https://theconversation.com/young-people-are-now-on-the-edge-of-our-reconfigured-welfare-state-26697">to create an underclass</a>. </p>
<p>Where else has a government worked to consciously send its citizens into poverty? This is in stark contrast to the global shift to a policy focus on reducing youth unemployment and inequality – which includes organisations like the <a href="http://www.imf.org/external/np/sec/pr/2014/pr14169.htm">International Monetary Fund</a> (IMF) and <a href="http://www.worldbank.org/en/news/feature/2014/05/26/youth-unemployment-southeast-europe-averting-lost-generation">World Bank</a>.</p>
<h2>Why social inequality matters</h2>
<p>Consider what having no income for six months might mean in the lives of real people: fear and anxiety; the humiliation and degradation of eviction; partners, children and friends looking on; job searches without money for transport; becoming glum and down at heel. </p>
<p>This route is the reverse of the traditional democratic pursuit of national prosperity and stability, giving citizens and especially <a href="http://www.theguardian.com/environment/planet-oz/2013/jul/02/obama-climate-change-ethics-morals-speech">“our children and our children’s children”</a> (in the words of US president Barack Obama) confidence to look to the future. It appears this does not apply in Australia – and, besides, life was not meant to be equal. </p>
<p>So what does a bit <a href="https://theconversation.com/increasing-inequality-brings-high-social-cost-report-27867">more social inequality</a> matter? Actually, there is an <a href="http://www.theguardian.com/books/2010/feb/28/spirit-level-richard-wilkinson-kate-pickett">international research consensus</a> about the destructiveness of social inequality on individual lives and on society broadly.</p>
<p>Comparing OECD market-based democracies, countries with the most social inequality consistently score highest on social dysfunction indicators – mental ill health, violence, incarceration, functional illiteracy, obesity, substance abuse, among others. State policy repertoires of citizen rights to generous public services are associated with more social equality. Conversely, austere market-based approaches to social policy typify the most unequal nations. </p>
<p>The United States is among the <a href="https://theconversation.com/income-and-wealth-inequality-how-is-australia-faring-23483">world’s most unequal nations</a>. The Abbott government’s welfare policies would take us closer to the US. The budget policy rationale seems to be that a dose of fear and insecurity is good for young people. But what sort of theory stipulates that experiences of destitution or fear of homelessness are conducive to healthy personality development?</p>
<p>Just as Australia’s convict forebears resorted to theft to eat, this policy will push people to take desperate measures. Do I sell my body, become homeless, or just deliver this bit of ice to cover the cost of my rent?</p>
<h2>Investments in people pay off</h2>
<p>All the evidence points to the efficacy of the reverse policy logic: supported jobs, job creation, accessible and affordable public services for training and education, in order for young people to develop into the resilient and flexible workforce of knowledge economies. </p>
<p>OECD Secretary-General Angel Gurría is <a href="http://www.keepeek.com/Digital-Asset-Management/oecd/social-issues-migration-health/society-at-a-glance-2014_soc_glance-2014-en#page11">worried</a> most of all about “scarring”, the damaging effects of experiences of poverty and unemployment for young people, which severely lessens lifelong earnings and job opportunities. It is not as if our young people are not already at risk; Australia has long had high <a href="http://www.mindframe-media.info/for-media/reporting-suicide/facts-and-stats">rates of suicide</a> and <a href="http://www.abc.net.au/rampup/articles/2014/04/14/3984981.htm">mental illness</a>.</p>
<p>While federal treasurer Joe Hockey declares <a href="https://theconversation.com/hockeys-first-budget-redefines-the-role-of-government-in-australia-26573">“the age of entitlement is over”</a>, the IMF’s head <a href="http://www.abc.net.au/tv/qanda/txt/s3941811.htm">Christine Lagarde</a> argued on a recent visit to Australia that governments have to provide good public education and health and reduce social inequality. </p>
<p>As bastions of global capitalism, the IMF and World Bank championed neoliberal economics from the 1970s. But now they declare that social inequality <a href="http://www.imf.org/external/pubs/ft/sdn/2011/sdn1108.pdf">harms economic prosperity</a>. </p>
<p>Given increasing economics literature linking inequality with fragile growth, the IMF used a multi-country, multi-variate and longitudinal database to research the direct effects of government fiscal redistribution. It <a href="http://www.imf.org/external/pubs/cat/longres.aspx?sk=41291.0">reported in February 2014</a> that income transfers have no negative effects on economic growth. On average, what governments have done to redistribute has narrowed inequality, which helped support faster and more durable growth. </p>
<p>The IMF’s verdict is that to focus on economic growth alone and let inequality take care of itself is wrong policy because the resulting growth may be fragile and unsustainable. Such a strategy should also be abandoned “from ethical, political, or broader social considerations”.</p>
<p>The OECD remains alarmed at the social impacts of the global financial crisis and the evident decline of social trust and stability since the GFC. It <a href="http://www.keepeek.com/Digital-Asset-Management/oecd/social-issues-migration-health/society-at-a-glance-2014_soc_glance-2014-en#page12">advises</a> the global community to rely on good social policies to develop the resilience of populations needing to adjust to unpredictable economic fluctuations. </p>
<p>According to these representatives of the international research community, social policies, welfare or public services entitlements are not undesirable, nor deadweights on society, but necessary. In other words, the Abbott government’s welfare policies are economically, socially and ethically unjustifiable. </p>
<p>The date for Brisbane G20 draws near and I am feeling so embarrassed.</p><img src="https://counter.theconversation.com/content/27810/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Olga Bursian does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Australia is hosting the G20 this year and showcasing to the world its approach to welfare policy: deny young people income support for up to six months and instead make more food vouchers available. This…Olga Bursian, Lecturer, Federation University AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/267002014-05-14T19:24:59Z2014-05-14T19:24:59ZRegressive measures won’t help youth into work or training<figure><img src="https://images.theconversation.com/files/48454/original/nbkf32pn-1400043272.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Policy measures have failed to understand why unemployed and disaffected youth are the way they are.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/downloading_tips.mhtml?code=&id=73217326&size=medium&image_format=jpg&method=download&super_url=http%3A%2F%2Fdownload.shutterstock.com%2Fgatekeeper%2FW3siZSI6MTQwMDA3MTk4MiwiYyI6Il9waG90b19zZXNzaW9uX2lkIiwiZGMiOiJpZGxfNzMyMTczMjYiLCJwIjoidjF8MTAxMjc1ODh8NzMyMTczMjYiLCJrIjoicGhvdG8vNzMyMTczMjYvbWVkaXVtLmpwZyIsIm0iOiIxIiwiZCI6InNodXR0ZXJzdG9jay1tZWRpYSJ9LCJMOTNNZjR3QUVlSTE1Y1VpTlNqQ05FMjk4M2siXQ%2Fshutterstock_73217326.jpg&racksite_id=ny&chosen_subscription=1&license=standard&src=Hlvv5x9Q9KwnmkTHFqIAFQ-1-30">Shutterstock</a></span></figcaption></figure><p>The 2014 federal budget implemented a so-called crackdown on what Minister for Social Services Kevin Andrews calls young people who are content to <a href="http://www.theaustralian.com.au/national-affairs/budget-2014/labor-wont-block-mp-pay-freeze-chris-bowen-says/story-fnmbxr2t-1226912874697">“sit on the couch at home and pick up a welfare cheque”</a>.</p>
<p>The crackdown will change access to income support for people under 30 years of age. </p>
<p>From January 1 2015, all young people seeking Newstart Allowance and Youth Allowance for the first time will be required to “<a href="http://www.budget.gov.au/2014-15/content/bp2/html/bp2_expense-21.htm">demonstrate appropriate job search and participation in employment services support for six months before receiving payments</a>”. </p>
<p>Upon qualifying, recipients must then spend 25 hours per week in Work for the Dole in order to receive income support for a six-month period. What happens beyond this six months is unclear.</p>
<p>What <em>is</em> clear is that these policy changes, together with the Minister’s accompanying statements, are informed by a deficit view of disadvantaged youth. </p>
<p>It is a view that demonstrates how little politicians know or understand about these young peoples’ past circumstances.</p>
<h2>Putting a face on the young people</h2>
<p>A recent ARC Discovery project I led investigated the experiences of young people enrolled in special schools for disruptive students in New South Wales.</p>
<p>The kids I have been working with for the last three years have all experienced severe learning difficulties, in addition to receptive and expressive language disorders, as well as family breakdown, child abuse and resulting mental health issues.</p>
<p>The majority report a lack of academic support in the primary years of school, conflict with teachers, and poor peer-relationships. Most are years behind their age peers academically and the vast majority come from severely disadvantaged backgrounds.</p>
<p>By severely disadvantaged, I mean children who have been removed from or surrendered by their parents and children who have moved schools more times than they can count. This was often because their mum could no longer pay the rent on their housing commission home or because she had to flee to a refuge to escape domestic violence.</p>
<p>I also refer to 13-year-olds who speak of “juvie” like it is inevitable, 15-year-olds who cannot read anything more complex than a street sign, an 11-year-old who spent 18 months of primary school travelling in his father’s truck due to rolling school suspensions, and 13-year-olds on medication cocktails that would fell a horse.</p>
<p>I also mean young people who say they want to be builders, carpenters, reptile handlers, lion keepers, paramedics, policemen, lawyers and professional rappers.</p>
<p>However, given the learning gaps and high absenteeism noted by participating school principals, not one of these young people is likely to gain a Year 12 qualification.</p>
<p>Short of a miracle, the majority are destined to join the unemployment line but not one of these young people indicated that this was a life they were planning for themselves.</p>
<h2>Help them escape the unemployment line</h2>
<p>The special schools know what their students’ futures are likely to be and are working hard to help them into alternative pathways.</p>
<p>The traditional port of call for low attainers and early school leavers has been TAFE, yet TAFE and the role that it can play in the social mobility of disadvantaged young people has not figured in any serious policy considerations since the Dawkins years.</p>
<p>It is as though successive governments have forgotten that 24% of young Australians still do not complete year 12, and that those who do not make it into further education or training are in real danger of joining the long-term unemployment line.</p>
<p>On budget night we heard that the further education sector is to undergo its biggest shake-up since the Dawkins reforms. The demand-driven system is to be extended to include non-university providers offering diplomas, advanced diplomas and associate and bachelor degrees.</p>
<p>Conspicuously absent in the educational measures announced is funding for second-chance education programs and the critical bridging courses that are necessary to support access to further education and training for disadvantaged early school leavers.</p>
<p>These are the young people who are likely to be pushed into the harsh new income support measures introduced on budget night. The result will be to further concentrate financial hardship; an outcome that will not only affect these young people but also their parent/s.</p>
<p>For many of the students I described earlier, home is headed by a single mother who, since the Gillard government’s changes to the single mother’s pension, cannot afford to support them.</p>
<p>Instead of education policy that has been informed by knowledge of where these young people have come from and what is needed to help them achieve their dreams, we get welfare policy that portrays them as lazy couch-potatoes.</p>
<p>The question is why, when a successful outcome for these young people would surely be better in the long run, not only for them, but for the economy too. </p><img src="https://counter.theconversation.com/content/26700/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>A/Prof Linda Graham receives funding from the Australian Research Council (DP1093020 & DP110103093) and the Financial Markets Foundation for Children (FMF4C 2013-030). She is the Managing Editor of the Australian Educational Researcher and a member of the Australian Association for Research in Education (AARE) Executive Committee.</span></em></p>The 2014 federal budget implemented a so-called crackdown on what Minister for Social Services Kevin Andrews calls young people who are content to “sit on the couch at home and pick up a welfare cheque…Linda J. Graham, Principal Research Fellow in Education, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/266972014-05-14T19:22:37Z2014-05-14T19:22:37ZYoung people are now on the edge of our reconfigured welfare state<figure><img src="https://images.theconversation.com/files/48464/original/nvckmnfv-1400047334.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Treasurer Joe Hockey warned Australians that 'the age of entitlement is over' – a promise that certainly came true for young Australians in the federal budget.</span> <span class="attribution"><span class="source">AAP/Lukas Coch</span></span></figcaption></figure><p>The <a href="http://www.budget.gov.au/2014-15/index.htm">2014-15 federal budget</a> continues the deconstruction of Australia’s post-war <a href="https://theconversation.com/robin-hood-and-piggy-bank-what-the-welfare-state-does-for-us-25790">welfare state</a>. In fact, the budget takes it a step further, particularly for the young. People under the age of 30 will now have a quite different relationship to the social protection system. Essentially, their rights and entitlements to payments are heavily circumscribed. There are certainly no “entitlements”, as treasurer Joe Hockey <a href="http://www.theage.com.au/national/the-end-of-the-age-of-entitlement-20120419-1x8vj.html">promised</a>.</p>
<p>Young people <a href="http://www.smh.com.au/business/federal-budget/federal-budget-2014-young-to-wait-until-25-to-get-dole-20140513-388di.html">must now wait</a> until they are 25 before they are eligible for a <a href="http://www.humanservices.gov.au/customer/services/centrelink/newstart-allowance">Newstart</a> unemployment payment, and instead rely on the much lower <a href="http://www.humanservices.gov.au/customer/services/centrelink/youth-allowance">Youth Allowance</a> if under 25.</p>
<p>For those under the age of 30, there is a waiting period of six months before a claim for any assistance can be made, although <a href="http://www.dss.gov.au/about-the-department/publications-articles/corporate-publications/budget-and-additional-estimates-statements/2014-15-budget/budget-fact-sheet-working-age-payments">some account</a> will be taken of previous workforce experience. In addition, all payments are subject to “earn or learn” requirements.</p>
<h2>The fallacies of ‘work for the dole’</h2>
<p>In 1987, as a research officer at the Brotherhood of St Laurence, I wrote a policy paper entitled <a href="http://trove.nla.gov.au/work/12505771?selectedversion=NBD5245744ocx">Community Work for Unemployed Young People</a>. The paper argued against the Hawke government’s controversial proposal that unemployed young people should “work for the dole”.</p>
<p>The paper took the line that work for the dole was antithetical to the objectives enshrined in the post-war welfare state in which unemployment payments were an unconditional compensation for unemployment and, as such, a right. If you were unemployed you received a low but adequate payment while you looked for work until you found a job – no more, no less. </p>
<p>Of course, in the <a href="https://theconversation.com/not-just-a-number-defining-full-employment-15248">full employment</a> post-war era, it didn’t take long to find a job. Your unemployment was a fault of the system in not providing jobs, so your unemployment payment was an entitlement. This was how welfare systems were constructed following the Great Depression and World War Two.</p>
<p>Work for the dole largely abandons these principles. It enshrines a view that unemployment is a matter of individual deficits. In this world view, there is no “entitlement” to compensation payments – especially if you are young with no or limited work experience. In fact, you must “work” for that payment.</p>
<p>Needless to say, my paper had no impact whatsoever and <a href="https://employment.gov.au/work-dole">work for the dole</a> has long been a part of the social welfare settings for unemployed young people. Perhaps there are some positive aspects to it, although the evidence for this is <a href="http://theconversation.com/work-for-the-dole-doesnt-work-but-here-is-what-does-22492">not strong</a>. </p>
<p>According to economist Jeff Borland’s <a href="http://cf.fbe.unimelb.edu.au/staff/jib/documents/wfdwp.pdf">research</a>, the best path out of unemployment for young people consists of jobs that emanate from economic growth. But high quality, flexible, locally driven labour market programs can also help.</p>
<h2>Damaging the safety net</h2>
<p>These new requirements attached to eligibility, as announced in the budget, profoundly damage the welfare state and certainly erode most of the original principles enshrined by its architects in the post-war period. Australian social protection is now seriously compromised.</p>
<p>The waiting period, denying unemployment payments, means that those waiting have no income. If they have been working in a low-paid and/or casual job, as many young people do, they will have little or no back-up savings if they lose a job. If they have emerged unemployed out of education and training, again they will have no income. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/48465/original/n5synpw3-1400047901.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/48465/original/n5synpw3-1400047901.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/48465/original/n5synpw3-1400047901.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=915&fit=crop&dpr=1 600w, https://images.theconversation.com/files/48465/original/n5synpw3-1400047901.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=915&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/48465/original/n5synpw3-1400047901.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=915&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/48465/original/n5synpw3-1400047901.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1149&fit=crop&dpr=1 754w, https://images.theconversation.com/files/48465/original/n5synpw3-1400047901.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1149&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/48465/original/n5synpw3-1400047901.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1149&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">There is, in effect, no social safety net for some of those affect by the budget changes.</span>
<span class="attribution"><span class="source">AAP/Natalie Boog</span></span>
</figcaption>
</figure>
<p>This is a very troubling dimension of the changes: there is, in effect, no social safety net. For some, a return to the family home and parental support may be an option but it won’t be for many. These people will be penniless and pauperised. It will put them at risk of homelessness and could also encourage greater participation in black or grey economies. This is certainly a very regressive element of the changes.</p>
<p>Young people, however, are not the only ones taking a king hit in this budget. The other group consists of older Australians, who will be working until they are 70 before qualifying for an age pension. The policy affects everyone born after 1958 and continues the present timeframe for increasing the pension eligibility age to 67 by 2024.</p>
<p>Many older people will struggle to maintain workforce participation until they are 70 and will be forced on to the lower Newstart unemployment payment if they have insufficient savings. This is most likely to be those who have worked in lower paid jobs through their working lives or who have had disrupted careers.</p>
<h2>Compromising our future</h2>
<p>It is also greatly troubling that policies that once were confined to the very young – those under the age of 21 – are now applicable to people up to the age of 30. There might be some justification for differential treatment for people under the age of 21 on account of their youth and lack of skills and experience. But there is no justification for treating people in their 20s up to the age of 30 as different citizens from older age groups. </p>
<p>People in their 20s are largely independent or wish to be so, are active social contributors, and many have their own families. They are on the path to becoming the leaders and key social actors of the future. </p>
<p>However, the policies instituted in Tuesday’s budget serve to infantilise, disempower and disenfranchise this group. The impact will consist of lower levels of social protection at key junctures during Australians’ lives, particularly at early and later stages – when such protection is most needed.</p><img src="https://counter.theconversation.com/content/26697/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Veronica Sheen does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The 2014-15 federal budget continues the deconstruction of Australia’s post-war welfare state. In fact, the budget takes it a step further, particularly for the young. People under the age of 30 will now…Veronica Sheen, Research Associate, School of Social Sciences, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/224922014-01-30T03:19:30Z2014-01-30T03:19:30ZWork for the Dole doesn’t work – but here is what does<figure><img src="https://images.theconversation.com/files/40081/original/2mvrxszq-1390966623.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The government plans to re-introduce work for the dole, but does it work?</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The Work for the Dole program could again become a core element of welfare policy for the unemployed in Australia, but there is a considerable body of evidence which shows it is unlikely to help people find jobs. </p>
<p>While <a href="http://www.theaustralian.com.au/national-affairs/coalition-to-expand-workfordole/story-fn59niix-1226811025865">this week’s announcement</a> by Assistant Minister for Employment Luke Hartsuyker was sketchy in detail, from what has been said so far, it seems that the details of the program will remain similar to when it was first introduced in the late 1990s. The government will provide funding for short-term job placements in the community sector that will be required to be taken up by Newstart payment recipients whose unemployment spell reaches a threshhold length. </p>
<p>Another constant with Work for the Dole between its introduction and this week’s announcement is the idea that it can improve employment outcomes for Newstart recipients. Unfortunately, this seems unlikely. In fact there is now much more evidence to tell us this than when the scheme was introduced 15 years ago. </p>
<p>A <a href="http://cf.fbe.unimelb.edu.au/staff/jib/documents/wfdwp.pdf">study</a> I carried out with my University of Melbourne colleague Yi-Ping Tseng on the pilot phase of Work for the Dole, found that participants in the program were <a href="https://theconversation.com/work-for-the-dole-doesnt-work-so-why-is-it-coalition-policy-784">no more likely to move off welfare payments</a> in the 12 months than a comparable group of payment recipients who did not participate in the program. </p>
<p>Our finding is consistent with a large body of international evidence on the effects of public sector job programs. The majority of those studies find zero or negative effects on labour market outcomes for participants.</p>
<h2>Why it doesn’t work</h2>
<p>There are good reasons why public sector job programs such as Work for the Dole do not have a positive effect on employment outcomes. First, the programs do not increase the long-term availability of jobs. It is only when extra jobs become available that people who are unemployed can move into sustainable employment. But these programs are only providing a limited period of employment. </p>
<p>Second, the programs are not providing a sufficient opportunity for skill development to make a big difference to employment prospects for the unemployed. Many people who are unemployed have low education and skills, as well as other sources of disadvantage, and hence require a substantial increase in skills to be able to obtain and retain employment. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/40083/original/6cp7tx9g-1390966709.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/40083/original/6cp7tx9g-1390966709.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=404&fit=crop&dpr=1 600w, https://images.theconversation.com/files/40083/original/6cp7tx9g-1390966709.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=404&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/40083/original/6cp7tx9g-1390966709.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=404&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/40083/original/6cp7tx9g-1390966709.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=507&fit=crop&dpr=1 754w, https://images.theconversation.com/files/40083/original/6cp7tx9g-1390966709.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=507&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/40083/original/6cp7tx9g-1390966709.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=507&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Government programs can be effective if they draw on evidence of what works.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>Programs that are short-term, and are not structured around formal skill development, as is the case for most public sector job schemes, do not provide that substantial increase.</p>
<h2>Change the design</h2>
<p>Does this mean that we should give up on government programs intended to assist the unemployed? Well, partly I think it does. The best way for a government to reduce unemployment is to keep the rate of economic growth as high as possible. For example, recent research I have done shows that virtually all of the increase in Australia’s rate of unemployment since the start of 2008 – from about 4-6% – can be <a href="sites.google.com/site/borlandjum/labour-market-snapshots">explained</a> by slower economic growth over that period. So 95% of the time a government spends thinking about unemployment should be spent thinking about ways to promote economic growth. </p>
<p>For the other 5% of the time, I would argue that it is worth government persisting with programs for the unemployed. What needs to change, however, is the design of the programs. There needs to be much more attention to building in the lessons we now have about “what works”. While it is the case that most programs that have been studied show no effect on employment outcomes for the unemployed, some schemes have been found to do better.</p>
<h2>Keep it local</h2>
<p>Small-scale programs, targeted at the needs of local unemployed and employers, and where ideally an unemployed person obtains a formal certificate or qualification, are more regularly found to have positive effects. Trying to incorporate these features into programs for the unemployed would therefore be a good place to start on policy design.</p>
<p>In another previous article in <a href="https://theconversation.com/four-ways-to-get-people-back-into-work-1157">The Conversation</a> I suggested a new approach to choosing programs to improve labour market outcomes for those from disadvantaged backgrounds that would allow this type of bottom-up approach. An independent body would be given responsibility for allocating funds amongst organisations (community or private sector) which submitted proposals for improving employment outcomes for disadvantaged groups. </p>
<p>There would be a great deal of flexibility in the type of projects that would be funded – from early years interventions through to labour market programs to assist those currently unemployed. Decisions on which proposals to support would be made using a benefit-cost method, and it would be a requirement of funding for a rigorous evaluation of outcomes from the project to be undertaken. Allocating funds in this way would provide an organic process for identifying and developing programs, assisting organisations with an understanding of how to improve outcomes in their local area and the capacity to implement their ideas. </p><img src="https://counter.theconversation.com/content/22492/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Some of the research described in this article was funded by the Commonwealth Department of Family and Community Services. Jeff Borland receives funding from the Australian Research Council.</span></em></p>The Work for the Dole program could again become a core element of welfare policy for the unemployed in Australia, but there is a considerable body of evidence which shows it is unlikely to help people…Jeff Borland, Professor of Economics , The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/222882014-01-23T19:42:36Z2014-01-23T19:42:36ZIs ‘unsustainable’ welfare growth really being driven by Newstart?<figure><img src="https://images.theconversation.com/files/39706/original/4xy2939b-1390435788.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Moving some sole parents onto the lower Newstart payments has pushed up the numbers.</span> <span class="attribution"><span class="source">Alan Porritt/AAPIMAGE</span></span></figcaption></figure><p>Social services minister Kevin Andrews has targeted the Disability Support Pension and Newstart, the main payment for the unemployed, for reform, branding the current level of welfare as <a href="http://www.theguardian.com/world/2014/jan/21/australias-unsustainable-welfare-system-to-be-overhauled-says-minister">unsustainable</a>.</p>
<p>But the idea that growing numbers on Newstart are providing relentless pressure on the federal budget is not supported by the data in the <a href="http://www.dss.gov.au/about-the-department/publications-articles/research-publications/statistical-paper-series/statistical-paper-no-11-income-support-customers-a-statistical-overview-2012">annual Statistical Report</a> that Andrews referred to when calling for reform.</p>
<p>In fact, the number of people receiving <a href="http://www.humanservices.gov.au/customer/subjects/payments-for-job-seekers">unemployment payments</a> (Newstart for people aged 22 years and over and Youth Allowance (other) for people aged 16 to 21) was a little lower in 2012 than in 2002 (633,000 in 2012 compared to 645,000 in 2002). </p>
<p>Adjusting for growing population size also shows the proportion of working-age Australians receiving unemployment payments actually fell from around 5.0% to 4.2% between 2002 and 2012.</p>
<h2>Complicated picture</h2>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/39707/original/sg8v7cdj-1390435913.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/39707/original/sg8v7cdj-1390435913.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=902&fit=crop&dpr=1 600w, https://images.theconversation.com/files/39707/original/sg8v7cdj-1390435913.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=902&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/39707/original/sg8v7cdj-1390435913.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=902&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/39707/original/sg8v7cdj-1390435913.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1133&fit=crop&dpr=1 754w, https://images.theconversation.com/files/39707/original/sg8v7cdj-1390435913.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1133&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/39707/original/sg8v7cdj-1390435913.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1133&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Social services minister Kevin Andrews wants to review welfare.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>However, looking at more recent trends, the picture becomes more complicated. Following the onset of the global financial crisis, the number of people on unemployment payments jumped from a low point of 3.3% of the working age population in 2008 to 4.2% in mid-2009 and 4.4% in 2010. </p>
<p>After 2010 the numbers started to fall. But more recent figures from the government’s <a href="http://www.dss.gov.au/about-the-department/labour-market-and-related-payments-monthly-profile-publications">monthly statistics on labour force payments</a> show another large jump from 4.2% to 5.3% of the working-age population between mid-2012 and mid-2013. This was an increase from around 633,000 people to just over 800,000. It should be noted, however, that the numbers in the annual publication and the monthly publications do not exactly align.</p>
<p>So why has there been such a large increase in the number of people receiving unemployment payments since 2012? According to <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Dec%202013?OpenDocument">the ABS</a>, since June 2012 the unemployment rate has increased from around 5.0% to 5.5%, and in Australia the number of people receiving unemployment benefits fairly closely tracks broader trends in the labour market.</p>
<h2>Sole parents swapped over</h2>
<p>A more important factor, however, appears to be government policy changes in other parts of the welfare system. <a href="http://www.humanservices.gov.au/customer/enablers/centrelink/parenting-payment/changes-to-parenting-payment">From January 1, 2013</a>, parents have no longer been eligible for the Parenting Payment when their youngest child turns six years of age if receiving Parenting Payment (Partnered), or eight years old for those receiving Parenting Payment (Single). </p>
<p>The then-Gillard government <a href="http://www.abc.net.au/pm/content/2012/s3633771.htm">estimated</a> that around 75,000 parents would be transferred from Parenting Payments to Newstart, and another 10,000 would lose all benefit entitlements because of their income from work. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/39709/original/74hf8dzx-1390436423.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/39709/original/74hf8dzx-1390436423.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/39709/original/74hf8dzx-1390436423.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/39709/original/74hf8dzx-1390436423.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/39709/original/74hf8dzx-1390436423.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/39709/original/74hf8dzx-1390436423.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/39709/original/74hf8dzx-1390436423.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Greens and social groups protested against changes to parenting payments last year.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>The monthly statistics on labour force payments shows that between December 2012 and February 2013 the number of people on unemployment payments jumped from around 700,000 to 796,000, an increase around four times as great as the corresponding periods for the previous two years. </p>
<p>Also, around 83% of the increase in the number of recipients were women, suggesting that this very large jump is likely to be explained mainly by parents being transferred from Parenting Payments.</p>
<p>The monthly figures do not identify whether beneficiaries have children or not, while the annual statistics will not show the effect of this policy change on the number of people receiving parenting payment until next year. Nevertheless, it seems very likely much of this recent increase will be offset by reductions in numbers on other payments. </p>
<p>This substitution between payments also explains a good part of the <a href="http://inside.org.au/growth-of-disability-support-pension-numbers/">longer-term increase</a> in numbers of people receiving the Disability Support Pension (DSP).</p>
<p>This also raises the problem that if the <a href="http://kevinandrews.dss.gov.au/transcripts/41">welfare review</a> foreshadowed by Andrews does only look at Newstart and DSP, then it will inevitably miss part of the explanation for the trends that appear to be of concern.</p>
<h2>Moving people into work</h2>
<p>There is much to agree with Andrews’ argument that the “best form of welfare is work”, a proposal in accord with the previous government’s rationale for moving people from the Parenting Payment to Newstart. The problems that some people on welfare face in moving into work require a comprehensive analysis, however.</p>
<p>Not all the problems that people on welfare face are caused by the welfare system, with barriers to work including labour market programs that are not equally effective for all, the level of job opportunities in the regions in which people live, the availability of public transport, the availability and affordability of childcare, and the level of skills of individuals, as well as employer attitudes to people disadvantaged in the labour market. </p>
<p>Incentives in the welfare system are only one part of these potential barriers.</p>
<p>Having said this, the wide and growing gap between the <a href="https://theconversation.com/paltry-newstart-allowance-is-fast-becoming-a-poverty-trap-6218">level of Newstart benefits and the level of DSP</a> is certainly an issue that needs to be urgently reviewed. If, as suggested by <a href="http://m.theage.com.au/federal-politics/political-opinion/kevin-andrews-is-tackling-the-welfare-problem-labor-ignored-20140121-316jk.html">Fairfax’s Peter Martin</a>, this is one of the objectives of the review, real progress could be made in helping the unemployed. </p><img src="https://counter.theconversation.com/content/22288/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Whiteford receives funding from the Australian Research Council, with a linkage partner being the Department of Social Services. He was a member of the Reference Group for the Harmer Review of the Australian Pension system.</span></em></p>Social services minister Kevin Andrews has targeted the Disability Support Pension and Newstart, the main payment for the unemployed, for reform, branding the current level of welfare as unsustainable…Peter Whiteford, Professor, Crawford School of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/222262014-01-23T01:32:30Z2014-01-23T01:32:30ZAn 800,000-plus jobs gap between ‘welfare to work’ and reality<figure><img src="https://images.theconversation.com/files/39657/original/rf48yfjn-1390368394.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Single parents' protests last year at being transferred to Newstart were ignored, and the evidence suggests the move made it harder to get suitable work to support their families.</span> <span class="attribution"><span class="source">AAP/Paul Miller</span></span></figcaption></figure><p>The major missing factor in debates on cutting welfare spending – as has been <a href="http://www.smh.com.au/federal-politics/political-opinion/kevin-andrews-is-tackling-the-welfare-problem-labor-ignored-20140121-316jk.html">flagged</a> by social services minister Kevin Andrews – is the limited and falling demand for labour. Labour market figures give the lie to the need to target working-age payment recipients as the issue. </p>
<p>The problem is not supply-side inadequacies but the demand for labour: there are far too few jobs on offer.</p>
<p>This factor undermined the thrust of <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Publications_Archive/archive/welfarebrief">Patrick McClure’s original review</a> of the welfare payments system in 2000, which was labelled “Welfare to Work”. It makes a nonsense of <a href="http://www.probonoaustralia.com.au/news/2014/01/welfare-system-shake">repeating the exercise</a>.</p>
<p>The earlier strategies did not decrease the numbers on payments: it just moved them to other payments, as is shown in the gradual increase in recipients overall. The numbers fell when more jobs were available and rose as the global financial crisis cut in and <a href="http://www.dss.gov.au/about-fahcsia/publications-articles/research-publications/statistical-paper-series">job numbers fell</a>.</p>
<p>In December 2013, the Australian Bureau of Statistics (ABS) recorded [716,000 unemployed people](http://www.abs.gov.au/ausstats/abs@.nsf/cat/6354.0](http://www.abs.gov.au/ausstats/abs@.nsf/cat/6354.0) who had actively looked for work in the previous fortnight, up 15,000 from the previous month. These figures do not fully overlap with <a href="http://www.dss.gov.au/about-the-department/labour-market-and-related-payments-monthly-profile-publication/labour-market-and-related-payments-november-2013">338,660 November Newstart Allowance recipients</a>, as some of those had a few hours’ work in the same fortnight. But, put together, the figures show official job seekers numbered around at three-quarters of a million. </p>
<p>This estimate does not include those discouraged from actively looking for work and those wanting to change jobs or find more work. So maybe the real job-seeker numbers are close to one million people looking for work.</p>
<p>One of the basic questions that is not asked is whether suitable paid jobs are available and accessible for those on payments that are assumed to encourage entry to paid work. The ABS data on job vacancy trends suggests some serious and increasing <a href="http://www.abs.gov.au/ausstats/abs@.nsf/cat/6354.0">lack of vacancies</a>.</p>
<p>Total job vacancies in November 2013 were 140,000, a decrease of 0.3% from August 2013. Private sector vacancies numbered 129,500 in November 2013, a decrease of 0.1% from August 2013. Job vacancies in the public sector totalled 10,500 in November 2013, a decrease of 3.6% from August 2013.</p>
<p>Another set of indicators tells the same story of too few jobs and <a href="http://www.tradingeconomics.com/australia/job-vacancies">falling vacancies</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/39646/original/y5sfkkqm-1390363651.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/39646/original/y5sfkkqm-1390363651.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=290&fit=crop&dpr=1 600w, https://images.theconversation.com/files/39646/original/y5sfkkqm-1390363651.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=290&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/39646/original/y5sfkkqm-1390363651.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=290&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/39646/original/y5sfkkqm-1390363651.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=364&fit=crop&dpr=1 754w, https://images.theconversation.com/files/39646/original/y5sfkkqm-1390363651.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=364&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/39646/original/y5sfkkqm-1390363651.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=364&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>Here we learn that:</p>
<blockquote>
<p>Job vacancies in Australia decreased to 124,786.50 in December 2013 from 125,657.20 in November 2013. Job vacancies in Australia averaged 134,517 from 1999 until 2013, with an all-time high of 261,394 in April 2008 and a low of 56,560.60 in July 1999.</p>
</blockquote>
<p>These figures show serious gaps between the numbers of jobs and job seekers. There appear to be at least seven potential applicants per vacancy, without including employers’ specific requirements. </p>
<p>These conditions make it likely that employers will choose able-bodied people without kids with recent employment experience and who are not depressed by too many failures. Such discrimination is hard to identify in situations where labour demand is so far below supply that most of the officially unemployed will miss out.</p>
<p>The old McClure strategies did not increase participation, nor will they now. The main strategy was to reduce the incomes of possible job seekers by moving them off higher payments that recognised their difficulties in finding employment (Disability Support Pension and Parenting Payment) onto Newstart. The theory was that a lower base income and tighter tapers on added earned income would create the incentive to find (non-existent) paid work in a crowded market.</p>
<p>The failure of the tactic is shown clearly in the experience of sole parents after the McClure review. From 2006, those on the Parenting Payment were registered as job seekers when their youngest child turned six. They were moved to Newstart when the child turned eight. </p>
<p>About 120,000 existing recipients were grandfathered onto the higher payment, but most of them were recently moved to Newstart under the Gillard government.
This change ignored the lack of evidence that those sole parents already on the lower payment had benefited from the earlier move by finding jobs.</p>
<p>In contrast, those left on the higher payment mainly had part-time work, which fitted with study and children’s needs. The move to Newstart meant their incomes were substantially reduced and they needed more work to make it up. Some dropped out of training as they had no support or time.</p>
<p>Data on the 40,000 who were moved earlier to Newstart is sparse, but the indications are that they are less likely to have part-time jobs than those who were on the higher payment. I <a href="https://theconversation.com/what-the-government-wants-to-ignore-about-sole-parents-and-jobseeking-11582">covered this change</a> in detail last year.</p>
<p>The claims by the government that the problem is the unemployed, not the lack of jobs, is a major con, too often blindly accepted by the media and the public. Cutting people’s payments does not increases their participation level in tight job markets. Their very low payments often fail to cover the costs of looking for unlikely jobs.</p>
<p>All Newstart recipients subsist on widely acknowledged inadequate incomes. Even the Business Council of Australia believes the current Newstart rate (A$250 a week) <a href="http://www.theguardian.com/world/2014/jan/21/coalition-needs-to-look-beyond-welfare-cutbacks-to-balance-the-budget?CMP=ema_792">is too low</a>. The payment no longer meets the community standard of adequacy and is, in itself, a barrier to people finding their way back into the workforce.</p>
<p>The same payment also covers many who are not looking for paid work because they are in training, sick, have temporary disabilities, are volunteering because of age, or have care responsibilities. Half of the people on Newstart are living in poverty but not looking for work, which is one reason given for keeping it so low. More are now also single parents and have some levels of disability.</p>
<p>People living on part-time paid jobs or doing unpaid ones need more income support. Andrews’ review should tackle the issue of funding a rise in the basic payment to provide an adequate basic income. </p>
<p>The review should also look at recognising other forms of time contributions. Higher payments can supplement the earned income of those with part-time work and other responsibilities or limits on their capacity to work. We need to think about ways to redistribute the benefits of both paid work and unpaid tasks and contributions to create wider well-being.</p><img src="https://counter.theconversation.com/content/22226/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eva Cox does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The major missing factor in debates on cutting welfare spending – as has been flagged by social services minister Kevin Andrews – is the limited and falling demand for labour. Labour market figures give…Eva Cox, Professorial Fellow Jumbunna IHL, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/92312012-08-31T05:36:19Z2012-08-31T05:36:19ZDown and out, and on the dole: why the Newstart Allowance needs a raise<figure><img src="https://images.theconversation.com/files/14880/original/8cp9ftwr-1346390750.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Workplace Relations Minister Bill Shorten has agreed to examine Newstart rates after ruling out a raise to the dole earlier this week.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>Why do we have welfare policies that create unnecessary poverty? </p>
<p>Despite a multitude of reports, submissions, public pleas and other advocacy on the problems of Newstart (NSA) recipients, the government has been adamant - until now - that change is unnecessary. This is in spite of unusually wide agreement that most of over 600,000 people on Newstart and related payments cannot survive financially because the payments are too low to cover any levels of decent living. How this is happening was clearly <a href="http://www.smh.com.au/opinion/politics/old-prejudices-leave-newstart-recipients-cut-adrift-20120824-24r19.html#ixzz2558xVmxc">expressed by Kasy Chambers from Anglicare</a> on Tuesday last week.</p>
<p>When confronted with that information, responses from the two biggest political parties - and a very large slab of the commentariat - argue that the best (or only) answer is a job. It’s implied if you can’t manage on Newstart, it must be smokes, pokies, laziness or incompetence that is to blame. Beneath these arguments are the presumptions that people on the Newstart allowance who may have out-of-date work skills, caring responsibilities, or ill health don’t really want to work or contribute to the community around them - and that we have a duty to make them. The inadequacy of the allowance is thus punishment for their individual moral failings – and a necessary incentive for them to get out and get a job.</p>
<p>Maybe there are finally signs of some shift. Last Thursday, Bill Shorten finally agreed to look at the payment levels, albeit as a response to such pressure, rather than recognition of the problems. However, <a href="http://www.smh.com.au/opinion/political-news/shorten-opens-the-door-to-debate-on-newstart-rates-20120829-2512o.html">he did say</a> that “it’s important to be clear that we care deeply and that those in Canberra who make decisions don’t have a tin ear to community concerns. It would be very, very tough living on $35 a day. And anyone in my business that denies this must surely be either heartless or utterly out of touch”.</p>
<p>Is this the sign that change may come? The following material examines the prejudices and their origins. Much come from assumptions about those on the payment which are quite wrong and unfair. People already draw these payments under quite restrictive conditions of eligibility and most have serious job search or other participation requirements. They become eligible because of their proven lack of access to other forms of income, including higher payments. While more than half are defined as job seekers, many others are sick or otherwise incapacitated and therefore exempted. Others are in forms of training or job related skill acquisition or have carer and other responsibilities that limit their ability to take on paid work. There are now more sole parents and people with disabilities being put onto Newstart as eligibility for other payments are tightened. These still have limits on the jobs they can find. Yet as a payment category, all of these diverse (often seriously disadvantaged people) seem to be condemned as not worthy of adequate income for a decent existence.</p>
<p>The statistical distributions support the diversity as is clear in the [NATSEM report](http://www.natsem.canberra.edu.au/storage/2-going%20Without%20MCP%20Report_Aug%202012.pdf](http://www.natsem.canberra.edu.au/storage/2-going%20Without%20MCP%20Report_Aug%202012.pdf) just released, done for some churches:</p>
<p><em>As of June 2012, Australia had 663,000 persons either on Newstart Allowance or job seeker Youth Allowance. Of these, the average duration on some form of income support was 2.6 years. Around one in four remain continuously on income support for more than two years (Australian Government, 2009).</em></p>
<p><em>A single person without children on Newstart receives a benefit of $244.85 per week3 4. This equates to around $12,766 per annum … A single pensioner receives $377.75 per week while average weekly earnings for male total earnings is $1298 per week. Newstart for singles equates to 18 per cent of average male earnings and 40 per cent of the current minimum wage ($606 per week). At 40 per cent of the minimum wage there is clearly a very strong incentive to move to paid employment.</em></p>
<p>A majority of recipients of these payments are clearly disadvantaged in many ways that derive from external factors, not from their own actions. Only 30% are on the payments for less than three months, and often have to wait before they can access the payment; most are on for much longer. The long-term recipients tend to be less formally qualified than the rest of the working age population. They may have difficulties with employers because of age, recent migration, ethnic background or forms of disability. About half of the long-term recipients are not registered with job search agencies, as job seekers expected to actively look for paid work. This suggests they are seen as too old or with issues and problems that make employment very unlikely.</p>
<p>The NATSEM paper shows only 10.6% of NSA/YA persons have a bachelor’s degree or higher, compared with 23% of others. At the other end, 35.4% of NSA/YA recipients have not made it past year 10 compared with 23.4% of the working age population. They also tend to suffer more ill health than higher income groups, as is shown by the most recent <a href="http://www.aihw.gov.au/publication-detail/?id=10737422718">AIHW report</a>, which reduces their chances of finding work. The problems of NSA recipients finding jobs are likely to become worse . Sole parent numbers are about to increase in 2013, as an extra 60,000 sole parents will shortly be transferred from their grandfathered payments. These have care responsibilities which employers don’t like. More people with disabilities are being rejected as criteria for DSP are tightened.</p>
<p>The coalitions of those blaming the victim are still making noises. A <a href="http://www.smh.com.au/opinion/politics/higher-dole-should-come-as-bonus-for-serious-jobseekers-only-20120830-253c3.html">Centre for Independent Studies op-ed</a> continues the assumptions despite quoting two of their usual suspects supporting a rise.</p>
<p>“There is growing momentum for raising the dole. Even the Business Council of Australia has joined the likes of the Australian Council of Social Service and the Greens in calling for increasing the $245-weekly Newstart allowance, saying it is a barrier to employment and can entrench poverty. This follows unlikely advocates in Judith Sloan and Ian Harper, who have both said the dole is too low compared with the $378 weekly disability support pension, or the $606.40 weekly minimum wage.</p>
<p>The case for a higher Newstart may be stronger for the long-term unemployed. However, any increase for this group should be accompanied by some degree of mutual obligation. After all, there is no point giving more money to people on unemployment benefits without making sure they are using that money to look for work.</p>
<p>A more targeted and prudent option could be a financial supplement, like a job-seeker’s bonus, where payment is conditional on meeting additional job-search requirements, or eligibility for mobility allowance and/or rent assistance could be broadened to include more Newstart recipients who meet the same job-search requirements.”</p>
<p>This view feeds into the assumption that the problem is always with the income recipient, rather than employer prejudices or lack of suitable jobs. The danger is that such a view plays into current beliefs that assume the jobs are there for people with no recent job experiences or certain qualifications. </p>
<p>At any one time, there are about <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/6354.0">200,000 vacant jobs listed</a> most of which are for skilled people with recent experience. The question is: why is this type of payment so politically suss? It obviously appeals to the misinformed voter prejudices. Add in the current bipartisan support for imposing income management on many of these recipients, and the stance provides convenient - if irrational - scapegoats for politicians wanting to look tough. </p>
<p>The political classes see more benefit in playing to media and public prejudices against “dole bludgers”, sole parents, and presumed welfare cheats than recognising that the limited jobs available are not suitable for most of these jobs seekers. They ignore the consequences of disheartening, ritualised unsuccessful job seeking and being knocked back or ignored constantly. The government maintains that raising the levels of Newstart would decrease incentives for finding work, but offer no proof that very low payments increase job search successes. </p>
<p>In fact, the reverse is likely as the very limited cash available means no extra money for haircuts, fares, papers, phones or other job related costs. The evidence from the <a href="http://www.who.int/social_determinants/thecommission/finalreport/en/index.html">social determinants of health data</a> shows how lack of adequate income can lead to loss of feelings of agency, and therefore the confidence that is necessary to do a good job interview. </p>
<p>These people live on far less than is reasonable or fair. They have become part of an underclass of long-term poor who need to use food services and other welfare support systems just to survive, that has no place in a wealthy society. They inhabit a grey zone of lack of political clout, blamed for the plethora of disadvantages they suffer. As there is no evidence (here or overseas) that lowering payments and increasing conditionality leads to more effective job seeking, why build this into policy?</p><img src="https://counter.theconversation.com/content/9231/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eva Cox does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Why do we have welfare policies that create unnecessary poverty? Despite a multitude of reports, submissions, public pleas and other advocacy on the problems of Newstart (NSA) recipients, the government…Eva Cox, Professorial Fellow Jumbunna IHL, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/62182012-04-19T20:20:51Z2012-04-19T20:20:51ZPaltry Newstart Allowance is fast becoming a poverty trap<figure><img src="https://images.theconversation.com/files/9671/original/vm8vxkdk-1334627218.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">For the majority of Newstart Allowance recipients, payments barely cover the cost of rent - let alone other living expenses.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>Despite ongoing uncertainty about global economic conditions, prosperity in Australia remains both very high and relatively widespread. But there is one group in Australia who has not shared in our rising national prosperity at all: people receiving unemployment payments (<a href="http://www.centrelink.gov.au/internet/internet.nsf/payments/newstart.htm">Newstart Allowance</a>).</p>
<p>People reliant on pensions and benefits are recognised as being amongst the poorest in our community. Age and disability pensioners have always received higher payment rates than the unemployed. But since 1997, when the Howard government started to index pensions to average weekly earnings but continued to index unemployment payments to the consumer price index, the gap has widened significantly.</p>
<p>Following the recommendations of <a href="http://www.fahcsia.gov.au/about/publicationsarticles/corp/BudgetPAES/budget09_10/pension/Documents/Pension_Review_Report/part3.htm">the Harmer Review</a>, in September 2009 the federal government increased the single rate of Age Pension by more than $35 per week – one of the largest pension increases in Australian history. </p>
<p>This was a welcome change that significantly reduced income poverty among the aged. However, this further widened the gap between Newstart and pensions to the point where the shortfall is now nearly $266 per fortnight. In 1997, a single unemployed person received 92% of what was paid to a pensioner; that ratio is now 65%.</p>
<p>It is not just that the unemployed are falling behind other social security recipients. They are falling behind every other group in the community on virtually any comparable measure.</p>
<p>Since 1996, payments for the single unemployed have fallen from 23.5% of the average wage for males to 19.5%. Furthermore, the level of Newstart for a single person has fallen from around 54% to 45% of the after-tax minimum wage. Newstart has fallen from 46% of median family income in 1996 to 36% in 2009-10 – or, from a little way below a standard relative income poverty line, to a long way below.</p>
<p>In 1996, a single unemployed person would have received an income that was about $14 a week (in 2010 values) less than a person in the 10th percentile of the overall income distribution. In 2009-10, they would have been $116 a week below a person in the 10th percentile. </p>
<p>Newstart recipients are falling into continuously deepening poverty. </p>
<p>Would raising benefits to a more adequate level keep the unemployed out of jobs or even cause low paid workers to give up jobs? Since 1996, the level of Newstart for a single person has fallen from 54% to 45% of the after-tax minimum wage. </p>
<p>It is difficult to see how going back to the 1996 relativities between Newstart and the minimum wage would pose serious disincentives to work. Do we really believe that people need to be impoverished in order to maintain incentives to work?</p>
<p>Currently, single unemployed adults receive $490 per fortnight in Newstart payments, or $35 per day. If they’re renting privately, they’re entitled to up to $120 per fortnight in rent assistance. But, to get that amount their rent has to be more than $267 per fortnight, leaving them with just $24.50 per day for everything else; and that assumes you can find somewhere to rent for $267 a fortnight. </p>
<p>The NSW government’s <a href="http://www.housing.nsw.gov.au/About+Us/Reports+Plans+and+Papers/Rent+and+Sales+Reports/Latest+Issue/">Rent and Sales Report</a> found that in late 2011, the cheapest one-bedroom homes in Sydney’s outer ring were in Wyong – around 90 kilometres from the CBD. If you were on Newstart and paying rent for a one-bedroom property in Wyong, you would have just $17.15 a day left over for your food, clothing, transport and other bills. </p>
<p>If you were paying a typical rent for a one-bedroom flat in Liverpool, 40 kilometres from the CBD, you would have less than $10 a day for everything else. While nearly 30% of Newstart recipients are under 25 and may be able to live with their parents, 36% are over 40 years of age, and are not likely to have this option.</p>
<p><a href="http://www.smh.com.au/national/newstart-benefit-fails-even-to-pay-the-rent-20120416-1x3sw.html">Data released earlier this week</a> from the Tenants Union of Victoria shows that the Newstart unemployment benefit either just meets or fails to pay the median rent for a one-bedroom flat in all capital cities aside from Hobart and Adelaide. This week, as part of the Greens’ campaign for a $50 weekly increase to the allowance, Senator Rachel Siewert has <a href="http://rachel-siewert.greensmps.org.au/content/media-releases/greens-senator-faces-early-budget-pressure-newstart">pledged to live on $17 a day</a>, which is what the <a href="http://www.acoss.org.au/">Australian Council of Social Service</a> (ACOSS) says people on Newstart have left for living expenses once rent has been accounted for. </p>
<p>The problems faced by the unemployed were recognised by the <a href="http://www.taxreview.treasury.gov.au/">Henry Review</a> of the tax system, which highlighted the need for a principles-based approach to setting payment levels: “Establishing adequacy benchmarks for transfer payments not considered in the Pension Review would make the system more robust, particularly if the benchmarks were preserved through a common but sustainable indexation arrangement.” This “would mean an increase to base rates for single income support recipients” on Newstart. </p>
<p>The Henry Review also recommended that the maximum rate of rent assistance should be increased and the rent maximum should be indexed by movements in national rents. </p>
<p>This problem is not going to go away. The continuing impoverishment of Newstart recipients is written into legislation and cannot be alleviated without deliberate government policy change. </p>
<p>Current policies are simply going to make the problem more difficult to deal with if decisions are postponed. It is worthwhile remembering that one of the first initiatives of the Hawke Government was to increase the rate of unemployment benefits, recognising that the lack of consistent indexation had made these payments inadequate. </p>
<p>It’s time the current government recognised that Newstart needs to be increased.</p><img src="https://counter.theconversation.com/content/6218/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Whiteford receives funding from the Australian Research Council. In July 2008, he was appointed by the Australian government to the Reference Group for the Harmer Review of the Australian pension system. He was an invited keynote speaker at the Melbourne Institute-Australia's Future Tax and Transfer Policy Conference held in June 2009 as part of the Henry Review of Australia’s Future Tax System, and he participated in the Tax Forum held in Canberra in October 2011.</span></em></p>Despite ongoing uncertainty about global economic conditions, prosperity in Australia remains both very high and relatively widespread. But there is one group in Australia who has not shared in our rising…Peter Whiteford, Professor, Crawford School of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/7842011-04-13T03:49:30Z2011-04-13T03:49:30ZWork for the Dole doesn’t work, so why is it Coalition policy?<figure><img src="https://images.theconversation.com/files/481/original/coalition2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Coalition welfare policy wrongly relies on the flawed Work of the Dole program.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>Tony Abbott’s recently unveiled <a href="http://www.news.com.au/money/money-matters/quarantine-welfare-payments-to-essentials-says-opposition-leader-tony-abbott/story-e6frfmd9-1226031178877">welfare reform package</a> advocating a range of tough policies to push people into work has been described by Prime Minister Julia Gillard as ‘reheated’.</p>
<p>You might expect that part of reheating would involve throwing out those parts of the menu that hadn’t worked.</p>
<p>In this case that doesn’t seem to have happened. The proposed Coalition approach for improving outcomes for the unemployed reinstates the Work for the Dole program to centre stage. </p>
<p>Yet the only independent research study undertaken of this program found that – far from improving outcomes for the unemployed – Work for the Dole caused participants to spend longer amounts of time on welfare payments.</p>
<p>In the early 2000s, in work with my University of Melbourne colleague Yi-Ping Tseng that was funded by the Commonwealth Department of Family and Community Services, I examined how participation in Work for the Dole affected the amount of time an unemployed person spent in receipt of welfare payments. </p>
<p>We focused on the experiences of 888 Newstart allowance recipients aged 18 to 24 years who participated in the pilot phase of the Work for the Dole program from late 1997 to mid 1998. We were able to compare the group of WfD participants with Newstart allowance recipients who had the same characteristics (such as gender and age) and same labour market background (for example, living in a region with the same rate of unemployment, and having a similar personal history of welfare receipt in the past 12 months) but who had not participated in Work for the Dole. </p>
<p>The main finding from our study was that there appeared to be quite large adverse effects of participation in WfD. </p>
<p>Participants were less likely to move off payments. Six months after commencing in the Work for the Dole program, 71.4% of participants were still in receipt of unemployment payments, compared to only 59.1% of non-participants. </p>
<p>After six months this gap began to slowly reverse so that by 12 months the difference in the percentages who had exited from unemployment payments had narrowed from 12.3% to 10.3%. </p>
<p>But this meant that Work for the Dole participants were still substantially more likely to remain unemployed. A consequence of Work for the Dole participants moving off payments more slowly was that they spent a longer average amount of time in receipt of payments. By 12 months after commencing participation they had been in receipt of payments on average for 2.2 fortnights longer than those who did not participate in Work for the Dole.</p>
<p>Why might Work for the Dole participants spend a longer time unemployed? We believe that the main potential explanation is that participation in Work for the Dole may cause or allow reduced job search effort. </p>
<p>There is growing international evidence of a ‘lock-in’ or ‘attachment’ effect during program participation. For example, an evaluation of the Community Work Program in New Zealand found that many participants viewed their work experience placements as ‘work’ and therefore did not engage in job search activity. </p>
<p>A lock-in effect would explain why the rate of exit from welfare payments was so much slower for Work for Dole participants during the time when they were doing Work for the Dole, but reversed thereafter so that their rate of exit was quicker than for non-participants. </p>
<p>Unemployed who have done Work for the Dole however never completely caught up to others in the likelihood of moving off welfare payments. One possibility to explain this absence of catch-up is that there is a permanent ‘scarring’ effect on Work for the Dole participants. This might be due to behavioural changes in payment recipients as a result of doing Work for Dole, or to employers stigmatising Work for the Dole participants. Evidence of employer stigma effects is the unwillingness of unemployed persons to reveal to employers offering jobs in which they are genuinely interested that they are involved in intensive activity test requirements.</p>
<p>Our study, it must be acknowledged, was of a relatively small number of Work for the Dole participants and of the Pilot phase of the program. Equally though, it has to be acknowledged there is no subsequent study of Work for Dole to show that our study is not representative of its effects in later years. </p>
<p>Moreover, our research is highly consistent with international evidence on the effects of work-based programs for young unemployed. In a review of the effects of labour market programs in the United States, the Nobel Prize winning economist James Heckman has written: “studies consistently report that these programs have no impact (or sometimes even a negative impact) on youth’s earnings.” </p>
<p>For Europe, Joachim Kluve and Christoph Schmidt summarise the evidence on these programs as being that “youth programmes have usually displayed negative effects.”</p>
<p>Having policies to improve labour market outcomes for the unemployed should be a major policy objective for any government. On both equity and efficiency grounds (for example, to ease the inflation-unemployment tradeoff that is likely to intensify as high rates of economic growth in Australia resumes) being able to has important consequences for national well-being. </p>
<p>On the evidence available, however, Work for the Dole cannot be part of achieving the objective. Suggesting that it might seems to be more about creating the impression that all the unemployed need to get back to work is a good kick in the bum.</p><img src="https://counter.theconversation.com/content/784/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The research on which this article was based was funded by the Social Policy Contract between the Melbourne Institute of Applied Economic and Social Research and the Commonwealth Department of Family and Community Services. The research does not reflect the views of the Department (or its current incarnation).</span></em></p>Tony Abbott’s recently unveiled welfare reform package advocating a range of tough policies to push people into work has been described by Prime Minister Julia Gillard as ‘reheated’. You might expect that…Jeff Borland, Professor of Economics , The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.