Employment

Your regular reminder that solving every problem by creating a competitive market of private sector "service providers" does not work.

Just 11.7% of jobseekers in Australia found long-term employment through a job provider in the latest financial year, according to the Department of Employment and Workplace Relations’ annual report.

Service providers are allowed to claim publicly funded outcome payments when clients have completed four, 12 and 26 weeks in employment – regardless of whether the client or provider found the job.

[…]

Jeremy Poxon, a welfare advocate at the Antipoverty Centre, said the system was failing “en mass” to help get people into meaningful work.

“The government knows full well that this system is failing on this basic metric to help people into work,” he said.

It came as Guardian Australia revealed Centrelink has threatened payment suspensions to jobseekers at a rate of five a minute, despite serious concerns from social security experts that they are illegal.

Poxon said the data showed the system was better at punishing people than helping them into employment.

This project built on previous Australian and recent international research to develop a set of budget standards for low-paid and unemployed Australians and their families.  

The family types included are:

• a single person (male and female) 
• couples without children
• couples with one and two children 
• a sole parent with one child.

The approach incorporated existing community norms, expert judgments and relevant evidence from social surveys. It emphasised the views expressed by low-paid and unemployed individuals in focus groups to ensure that the standards are grounded in everyday experience and reflect actual needs.  

The results were also used to inform debate and guide decisions about the adequacy of minimum wages and income support payments for the unemployed required to support healthy living consistent with individual needs, family needs and prevailing community standards.

From the ABC's summary:

The Albanese government's Economic Inclusion Advisory Committee released its second report recently. […]

The committee made 22 recommendations to the federal government on ways to best improve economic inclusion and create a more equal and prosperous nation.

It said its recommendations had been made with regard to their fiscal impact, their effect on workforce participation, and the long-term sustainability of the social security system.

But the committee said its five priority recommendations were to:

• "Substantially increase JobSeeker" and related working-age payments, and immediately improve the indexation arrangements of the payments.
• Increase the rate of Commonwealth Rent Assistance to better reflect the high rents actually charged in the private rental market.
• Commit to a "full-scale redesign" of Australia's employment services system to underpin the government's goal of full employment, and to replace the current system, which "worsens economic exclusion" with one that "promotes economic inclusion".
• Implement a national early childhood development system that is available to every child, beginning with abolishing the activity test for the child care subsidy to guarantee access to a minimum three days of high-quality care.
• Renew the culture and practice of Australia's social security system to support economic inclusion and wellbeing.

The committee's experts said that last point was really important.

Job providers are being paid millions of dollars in public money for work that jobseekers are finding themselves, with advocates saying there is “simply no reason” for the payments.

The Department of Employment and Workplace Relations has paid providers more than $3.6m in the past five years for pre-existing employment, where someone on jobseeker found a job prior to starting with a provider, according to data provided to Guardian Australia by the department.

The data shows there has been an uptick in pre-existing employment payments, with providers receiving $1.1m in the 2023-2024 financial year, more than double the $464,200 paid in 2019-2020.

 The following searchable document is the complete White Paper as published as an Appendix to the paper by H.C. Coombs (1994) 'From Curtin to Keating: The 1945 and 1994 White Papers on Employment', Discussion Paper, North Australia Research Unit, Australian National University.

It is the only on-line archive of the full paper in its original format that I am aware of. I have corrected some formatting issues that were in the Coombs Appendix version. 

 After decades in which macroeconomic policy focused primarily on inflation, the announcement of a renewed commitment to full employment, made by Prime Minister Anthony Albanese in 2021, was a major step. Labour’s election campaign included not only a commitment to full employment but the promise of a Jobs Summit leading to a new White Paper on Full Employment, modelled on that of 1945.

Upon taking office, the Labor Government backed away from this commitment. The Jobs Summit was relabelled a ‘Jobs and Skills Summit’ and much of the discussion focused on supposed skills shortages. This was a misnomer. The problem faced by employers was not a shortage of particular skills but the difficulty of filling vacancies of any kind in a situation of full or near-full employment. After decades in which the number of unemployed workers routinely exceeded vacancies, employers found this situation difficult to accept.

An even more consequential change was the removal of the word ‘Full’ from the name of the proposed White Paper. The decision to break with Labor’s history on this crucial issue seemed to portend the abandonment of the entire process.

"The problem [is] no-one knows exactly where the harm is," she explains. And, given that companies have saved money by replacing human HR staff with AI – which can process piles of resumes in a fraction of the time – she believes firms may have little motivation to interrogate kinks in the machine. 

"One biased human hiring manager can harm a lot of people in a year, and that's not great. But an algorithm that is maybe used in all incoming applications at a large company… that could harm hundreds of thousands of applicants" – Hilke Schellman

From her research, Schellmann is also concerned screening-software companies are "rushing" underdeveloped, even flawed products to market to cash in on demand. "Vendors are not going to come out publicly and say our tool didn't work, or it was harmful to people", and companies who have used them remain "afraid that there's going to be a gigantic class action lawsuit against them".

Australia’s system has long been designed in a deficit paradigm, underpinned by two flawed theories. Firstly, that unemployment is always an individual failing (ignoring structural and major barriers like ageism, racism, a lack of suitable work and thin labour markets, health, and disability). This drives the belief that if you only beat disadvantaged people hard enough to do the same things over and over they’ll somehow magically get a job, and if they don’t they’re lazy—the pernicious myth of the ‘dole-bludger’. Secondly, that more choice and competition in human services in every place, as well as harsh performance management, will inevitably result in better services and employment outcomes—especially for vulnerable and long-term unemployed people. Both theories have been proven to be rubbish, yet we have persisted in designing the entire system around them. The system designed for the few who cheat–around the worst people in society and the worst providers.

Consistent with the findings of previous reviews, it is clear that the overwhelming majority of unemployed people want to work. But the current rigid approach to mutual obligations is killing unemployed people’s intrinsic motivations and efforts to seek work, by drowning them and those paid to help them in a mountain of red tape, compliance requirements and pointless mandatory activities. People are made to do silly things that don’t help them get a job—such as pointless training courses or applying for jobs they won’t get—and are then harshly and repeatedly sanctioned for trivial or inadvertent breaches of prescriptive rules. It is ridiculous that over 70per cent of people with providers have been subject to payment suspensions despite zero evidence that 70per cent of people are cheating the system. The Robodebt Royal Commission’s finding that fraud in the welfare system is minuscule is apt. The nature and extent of mutual obligations is like using a nuclear bomb to kill a mosquito.

Under the JG scheme, the government continuously absorbs workers displaced from private sector employment. The “buffer stock” employees would be paid the minimum wage, which defines a wage floor for the economy. Government employment and spending automatically increases (decreases) as jobs are lost (gained) in the private sector. The approach generates full employment and price stability. The JG wage provides a  floor that prevents serious deflation from occurring and defines the private sector wage structure.

[…]

In this paper I develop the argument that the NAIRU is a costly and unreliable target for policy makers to pursue. It is argued that full employment demands that policy emphasise the number of jobs rather than some politically acceptable (though high) unemployment rate. Many commentators who are otherwise sympathetic to the goals of full employment are skeptical of a policy approach that chooses along the lines of the JG to endogenise the budget deficit. There is a fear that it will make inflation impossible to control. To answer these claims, the inflation control mechanisms inherent in the JG model are outlined. The final section indicates other issues that are relevant but not addressed.

Melissa Fisher believed her jobseeker payments would be cut off if she didn’t complete a resilience training course.

So the South Australian-based artist, who has a disability and has been on income support for several years, signed up. She found herself being asked to rate her friends and family, whether God played an important role in her life and if she felt grateful she had enough to eat.

At one point in the four-day course, she was shown pictures of Brad Pitt in a chicken suit to illustrate how people can go from “nothing to something”.

“I found all of it so condescending,” Fisher says of the resilience training run by WISE employment in South Australia.

“They said that who we have in our life is important and surrounding ourselves with successful people will make us successful. If we surround ourselves with unsuccessful people we will be unsuccessful.”

Fisher says she believed the course was part of her mutual obligations which jobseekers are required to undertake otherwise their payments can be suspended. Fisher says she was never told she could choose not to do the course – and other jobseekers across Australia say they also thought the same.