New report provides insights on reducing long-term unemployment when the economy recovers

3 April 2020

As Australia faces a period of high unemployment, Jobs Australia and the Australian Council of Social Service have released a report showing reform of employment services and commitments from employers will be crucial in reducing long-term unemployment in the recovery period.

The report, ‘Faces of Unemployment’, was prepared before the coronavirus outbreak and the subsequent announcement of a six-month payment that effectively doubles the rate of the JobSeeker Allowance (Newstart) and Youth Allowance. Nonetheless, the report provides important insights that could be applied by government to effectively reduce long-term unemployment in the lead up to our recovery from the current health and economic crisis. It profiles the people who receive Newstart Allowance and the jobs that were available to them, demonstrating that even before the present downturn, those receiving income support had a hard time finding employment.

Australian Council of Social Service CEO Cassandra Goldie said: “Even before the onslaught of the crisis we now find ourselves in, far too many people were locked out of paid work. When the unemployment rate was close to 5% in November 2019, there were already 8 people unemployed or needing more paid hours for every job available. Two thirds of people receiving Newstart Allowance had received it for a year or more, two-fifths had a disability, and half were 45 years or older.

“Income support for people searching for paid work or studying has been greatly improved for the next six months. But it’s vital that we start planning to make sure no one is left behind when the economy recovers and more jobs are available.

“This must include a permanent increase to income support payments, which otherwise trap people in poverty, making it near impossible to find employment.

“It must also include a serious investment in employment services, where the Australian Government spends less than half the average for wealthy nations as a share of GDP.

“We have a good idea from the evidence available of what works to get people unemployed long-term into jobs: paid work experience in a regular job rather than Work for the Dole; training in skills in demand from employers rather than standardised ‘work preparation’ courses, and one-on-one support both for those seeking employment and prospective employers.”

Jobs Australia CEO Debra Cerasa said: “Our report finds that older people, people with disability and single parents are at greater risk of long-term unemployment, due to discrimination and a lack of secure job opportunities with adequate paid working hours in entry level jobs. The report finds that many people who are currently unemployed have Year 12 qualifications or less, and that most of the jobs available to them are casual and part-time. For example, 8 in 10 entry-level jobs in hospitality are casual and 7 in 10 are part-time; 6 in 10 labouring jobs are casual and 5 in 10 are part-time. Although some people prefer part time or casual jobs, as we’re seeing now, these workers are the first to be let go when demand for services dries up.

“As the economy recovers from the current downturn, we need to rethink how these jobs are organised so that people have greater regularity and security of paid working hours, and to lift the skills of those who missed out on educational opportunities.

“Quality employment services make a difference. It’s crucial that the Government implements the recommendations of its Employment Services Expert Panel, which found that the system was too focussed on compliance, and that services for people unemployed long-term or facing other disadvantages in the jobs market were under-resourced.  It’s challenging for providers when the average employment consultant has 140 people to help and much of their time has to be spent administering compliance with contract and benefit requirements.

“We are open to working with the Government and employers to meeting the huge challenge of connecting people with employment opportunities as the economy recovers.

“Meanwhile it’s essential that employment services and their staff remain in place and continue their work with unemployed people and employers to help people sustain their skills and confidence, and take up job opportunities that come up during this difficult time.”

Read the report in PDF

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