Unemployment programs might give the government a nice feeling but they're fatally flawed

Extract from The Guardian

Greg Jericho

Latest figures show the futility of waiting periods and problems with work-for-the-dole. They are no solution to entrenched unemployment
• Only one job advertised for every six low-skilled jobseekers – report

‘The biggest increase in job vacancies has been for those jobs requiring the highest level of skill and conversely, despite overall job vacancies increasing, the number of vacancies has shrunk for those requiring the lowest level of skill.’ Photograph: Julian Smith/AAP

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@GrogsGamut

Tuesday 1 November 2016 06.00 AEDT 

A report released this week by Anglicare on the number of jobs available throughout Australia highlights the difficulty for low skilled workers and also that unemployment programs designed to punish unemployed are fatally flawed.
One of the more interesting statements to come out of the Senate estimates hearings was that the government does not see the purpose of work for the dole as necessarily about getting participants a full-time job.

The secretary of the department of employment told the Senate estimates committee that while only 11.7% of those who did the work-for-the dole scheme found full-time work and 16% found part-time work, “the purpose of work-for-the-dole is not necessarily to lead directly to a full-time job”, rather it was “much broader than that”.
Instead of just getting work, the purpose of work-for-the-dole was “the activation of jobseekers who have been on the case load for an extended period of time and so may have started to lose connection with the labour market” – that is, things like improving their “confidence, employability and motivation.”
It’s not hard to be a tad sceptical. It all sounds a bit management-speak: an employment initiative that is not really a failure ... despite not significantly improving the chances for the participants to become employed.
Talking about “confidence” is all very well, but it reminds me of freelance writers being told they won’t get paid for their work, but they will get a lot of exposure. Confidence, like exposure, doesn’t pay the bills.
But really, not even confidence is the true reason behind work-for-the-dole – rather it is the belief that the unemployed must somehow earn their Newstart payments, because they are, to some degree, at fault for being unemployed.

The problems with this approach are highlighted in Anglicare’s Job Availability Snapshot, released as part of its annual State of the Family Report.
Anglicare’s Michelle Waterford notes that while there are around four to five job vacancies per unemployed, that number is much higher when you include the increasing numbers of underemployed – people who would like to work more hours.
While both measures have improved over the past year, with 10.3 underutilised workers for every job vacancy in Australia, it clearly is not a straightforward proposition of getting a job just because you want one.

The snapshot importantly highlights that while the overall figure of 4.1 unemployed per vacancy is historically quite low, that average hides the fact that getting a job is greatly affected by where you live and your level of skill.
The snapshot categorises the job vacancies listed in the department of employment’s Internet Vacancy Index according to five levels of skills – from Level 1 (jobs requiring a bachelor degree or higher, or at least 5 years of relevant experience) to Level 5 (where either no education or work experience, or the barest level of high school completion is required).
The snapshot found that in the past year the biggest increase in job vacancies has been for those jobs requiring the highest level of skill and conversely, despite overall job vacancies increasing, the number of vacancies has shrunk for those requiring the lowest level of skill:

The report found that since the start of 2015 the proportion of job vacancies requiring skills in the two highest levels has surged, whereas those for the two lowest skill levels have gone from accounting for 45% of job vacancies to now just under 42%:

To an extent it is not surprising that there has been an increase in the job vacancies for work requiring the highest level of skills as these account for 35% of all jobs (not just due to academic qualifications, but also the five year experience aspect).
But even among skill levels, the picture varies across the states.
For example, in the ACT job vacancies requiring the highest level of skill account for 50% of all vacancies – reflecting the high number of public service positions. And not surprisingly, while Tasmania and South Australia have the lowest percentage of Level 1 skilled vacancies, they have the highest proportion of Level 5:

But just because those two states have a greater share of job vacancies for low skill level work does not mean they are particularly good places to be such workers.
While in South Australia there are on average 6.2 unemployed fighting for each job, there is a stunning 9.4 low-skill level unemployed fighting for each low-skill level position. In Tasmania the situation is even worse. While overall there are 7.4 unemployed per vacancy, there are 10.6 low skilled unemployed for each low skill job.
In every state the difficulty for low-skill level unemployed is tougher than for the overall average unemployed person:

And it is worth noting that while these figures only count low-skill level workers going for each low-skill job, of course those jobs are open as well to people with greater skills, meaning the difficulty for low-skilled workers is even tougher than these figures suggest.
Anglicare argues that “the greatest ground for people with limited skills can be gained through supported employment programs”. Such programs stress “the importance of explicit pathways to real jobs for people who are, or believe they are, excluded from the workforce” and that it requires “a commitment from employers and from potential employees”.
This approach could work under the government’s “investment approach” to welfare, which seeks to focus on at-risk groups within the community.
But the snapshot highlights the futility of government policy such as waiting periods until being able to access Newstart. It also shows that while work-for-the-dole programs may give the government a nice feeling that the dole isn’t being given for nothing, it is not a solution to entrenched unemployment for low skilled workers.