The Jobs and Skills Summit was a welcome start in resolving Australia’s unemployment and labour shortage concerns, but policymakers are still not going far enough in exploring the deeper causes behind the crisis. As remarkable as the 3.4% unemployment rate is, more can be done to tackle stubborn long-term unemployment.
Increasing the participation rate of the underemployed and bringing more women back into the workforce are two other areas that need further consideration. Instead of relying on sweeping generalisations about the unemployed, policymakers must commit to a targeted, evidence-based approach to investigate the contributing causes of unemployment. This includes examining why people aren’t enrolling into training courses or education, why apprenticeship uptakes are so low, and why they are unemployed in the first place.
It would also be helpful to take into account case studies and lessons from what has worked before. Japan for instance consistently has one of the lowest unemployment rates in the OECD at 2.6% while the Czech Republic hovers around 2.2%.
In the case of Japan, Japanese employment practices, most notably its culture of “lifetime employment”, are credited as being one of the reasons why the country has been able to maintain one of the lowest unemployment rates in the industrialised world. Japan’s reputation for employment security and a policy of preventing unemployment rather than paying benefits forms the basis of the country’s “productive welfare” policy.
Australia has no such equivalent, but it can take a note out of Japan’s playbook in terms of preventing unemployment instead of pouring money into an expensive welfare system that pays far too little to live on anyway. And history tells us alternative policies have worked well in the past to keep unemployment low.
In the three decades following the Great Depression, unemployment in Australia sat around the 2% mark thanks to the government’s extensive jobs creations schemes.
In the post-war years, Liberal and Labor governments alike made it their central mission to achieve full employment.
Today Australia’s women are among the most educated in the world, but according to ABS figures (2021) only 26.1% are employed in full-time positions while a further 21.3% are working part-time. Alarmingly, this leaves more than 50% of women unaccounted for in the paid workforce. This equates to 3 million women in full-time employment in contrast to the 13 million women who aren’t.
As of Feb 2022 ABS data shows there are 1.8 million people who aren’t working but want to, and 5.5 million who don’t want to work or are permanently unable to. Of those who didn’t want to work, 592,800 or 11% said it was because they had home duties to attend to. Common difficulties for job seekers included insufficient work experience, a lack of necessary skills or education and poor health. Intriguingly, the biggest category of respondents said they ‘did not have difficulty finding work’ (15.7%) with no further explanation.
There are a few important things policymakers need to get their heads around when it comes to reducing unemployment and alleviating labour shortages. By now it should be clear that Australia’s dismal rate of female workforce participation is something that needs to be drastically improved. Upskilling programs are great, but the availability of free training courses doesn’t necessarily translate into high enrolment rates. There are numerous barriers women face when attempting to progress their careers, and any program that wants to boost female participation needs to address them. Fundamentally women need a community they trust and feel safe in to empower them to fulfil their potential.
Instead of increasing welfare, we need to strengthen the support mechanisms to get people back into a job — things like high quality, abundant and affordable childcare needs to be fixed sooner rather than later. If it is an ‘investment’ as the government claims, why must women wait until next July for the subsidy changes to kick in?
Better employment support is another area that deserves attention. There are many psychological and social factors affecting the unemployed. Without a holistic approach, we can’t expect to make any meaningful progress in reducing stubborn unemployment.
In the area of apprenticeships, there needs to be more support to ensure a healthy uptake and retention of those engaged in apprenticeships. As they currently are, apprentices are not being paid enough to entice them to stay in their programs. For mature apprentices in particular, their wages and support loans may not adequately support them in covering living and training costs.
Last of all, lifting the pension cap is a start but doesn’t go far enough to make it worthwhile for pensioners wanting to work. Retirees should be able to work without being kicked off the Centrelink system if they earn more than the income threshold for 12 months, not 12 weeks.
Though the Labor government has done much to progress the conversation about unemployment and labour shortages, it must move beyond band-aid solutions to tackle unemployment’s root causes if it wants to make any meaningful impact. To do otherwise would only exacerbate existing problems and render the summit a total waste of time.
Amanda Rose is the founder of Small Business Women Australia, Western Sydney Women and Western Sydney Advisory. She has also been named as one of the most influential people in Western Sydney.
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