“Scott Morrison has declared the Coalition will not engage in “unfunded empathy” when it comes to raising the Newstart rate” and “the best form of welfare is a job” Katherine Murphy The Guardian 29.7.2019
Thinking about job markets is a key task in Career Counselling. This week I’ve been thinking about unemployed people already on Newstart for several months. How have they have processed the rapid change in government policy on “unfunded empathy” prompted by a covid outbreak? Given the very low levels of support for the unemployed to date, it seems very unlikely any of our future novel writers will look back on their job hunting days with anything but horror.
The ACOSS “Faces of Unemployment” Report allows us to better calibrate our understanding of what it has meant to be unemployed in Australia. The report shows that at the end of 2019 151,000 people had been receiving unemployment benefits for more than 5 years. Yes, living in penury and dealing with Centrelink for 5 long years. There are also 200,000 people who have been receiving unemployment payments for over 2 years, and a further 135,000 living off the $40 a day allowance for more than a year.i Laudable as the governments commitment to getting the budget back in surplus was, the ‘Back in Black’ celebrations the Liberal party held in late 2019 missed the mark completely. The ideological victory blocked their view of who was paying full price for that achievement.
“You only discover who is swimming naked when the tide goes out” is a Warren Buffett aphorism. This past fortnight it has been hard not to draw the conclusion that Australia’s much vaunted economy has been swimming naked for some time, perhaps 12 years. Outside of Sydney and Melbourne, local economies have been anaemic for years. Now we see the extent to which even Sydney and Melbourne have harboured so many working people with hardly a dollar to rub together.
What was the real unemployment rate
From a career counselling point of view I don’t disagree with Morrison that a job is the best form of welfare. I’m just not sure that when it turns out hundreds of thousands and maybe millions of jobs turn out to be nothing more than welfare substitution we should be saying our unemployment rate is only 5 or 6%. Actual employment should be characterised by financial security that lasts a little longer than 2 weeks. What is becoming clear now, is that since the GFC our governments have been running a Work Instead of the Dole scheme that has utterly failed hundreds of thousands of young Australians. People who have stayed on in school till year 12, and many more who have racked up significant debts through university study or vocational education. People who post-study have only found very casual or part-time jobs that do not provide a basis for any sort of financial security.
If our job market contains so many of these Work Instead of the Dole positions that don’t even provide financial security for 2 weeks this needs to be part of the national conversation. If this has been the state of our economy for the last 5 – 7 years, we need to be a lot more honest with the kids going through high school now. Their prospects too have probably dimmed significantly these past 2 weeks.
Market failure – careers for the young
The official perspective on the Australian economy has refused to acknowledge the nature of the real economy. The economic reality for millions of Australians was indicated by the extra-ordinary levels of under-employment present in our economy for the best part of a decade. Officially the idea that the share market and corporate profits are a good indicator of economic ‘health’ has obscured the key fact for many workers in Australia. Their financial security has been steadily eroding for years, long before last years thought bubbles about wage stagnation popped up in the national conversation.
The lily-gilding behaviour of government’s and commentators continues to distract from the corroding social effects of economic rationalism. The primary effect of the supply side economics at the core of economic rationalism has been to elevate our economy to the very first thing we think about when circumstances change. Capitalism has always had a fragility at it’s core because it is incapable of plateauing: it can only grow or shrink. Yet the supply-side economics of the last 3 or 4 decades has put so much reliance on domestic consumption that politicians no longer urge citizens to batten down the hatches in times of trouble. Instead it has become our national duty to maintain household consumption at all times; what previous generations would have recognised as nonsense of stilts.
In the next year we will obviously need to discuss how we want to restructure our tax system to start repaying the huge quantum of support the government is doling out to businesses across the land. The equally significant conversation we need to have is what to do about the extra-ordinary market failures of the last 10 years that cheated our young people out of real jobs. That is, real jobs that obviously put someone on the path to a level of financial security that cannot evaporate in a fortnight. What do you want to say to our government and corporate leaders about those market failures?