Friday 21 September 2018

Unemployment in Australia, 2018

Earlier this month a report was released by ACOSS (Australian Council of Social Service) and Jobs Australia, both are NGO's, this report is called Faces of Unemployment. It is an interesting and unusual look at unemployment in Australia, although not without it's flaws.

The reports summary
"This new report looks behind the headline unemployment statistica to reveal who is affected, why it's no easy matter for most unemployed people to get a job, and the disturbing trend in long term unemployment. We also look at the chances people on unemployment payments have of getting a job, and the help they receive from jobactive employment services."

In July 2018 there were 827,794 people on unemployment benefits, the Australian Bureau of Statistics said that there were 713,000 unemployed people in Australia that month. Thats a discrepancy of more than 100,000 people. To put these numbers in perspective there are 25,000,000 people living in Australia. That means that 3% of Australia's population is unemployed, or to put it another way 1 out of every 30 people.

Even these figures have to be taken with a grain of salt as over 300,000 people who receive unemployment benefits are not required to look for work as they work part time or are studying. At the same time we do not know how many people are not eligible due to their family or partner receiving too much income for them to qualify, even though they are unemployed.

Of the unemployed that receive benefits overall:

17% were aged under 25

38% were aged 25-44

43% were aged 45 or over

The number of young unemployed would be higher if they were not forced to go to university, the real reason for the high retention rates in education. But once they leave then the number goes up and it keeps going up. When unemployment first became an issue in the 1970's, the vast majority of the unemployed were young and the stereotype of the young carefree loafer was born. As the reality of unemployment has changed the stereotype remains.

For the long term unemployed, categorized as 12 months of unemployment or longer:

10% were aged under 25

38% were aged 25-44

49% were aged 45 or over

Of those aged over 55, the long term unemployment figure is 25%!

80% of all unemployed are single, no matter what their age.

62% of unemployed remain out of work after 12 months, after 24 months that figure remained 44% and an amazing 15% remain unemployed for more than 60 months, thats 5 years!

30% of all employment in Australia is part time or casual. Not everyone who works part time or in a casual position wants that to change, but more than 1,100,000 people do, they want full time employment, some argue that anyone who wants a full time job and does not have one should be counted as unemployed.

Section 1.5 asks and answers why they believe long term unemployment has become and remains an issue.

1. People have been put on unemployment benefits who were once on other types of benefits.

2. No investment in helping people get jobs.

3. The labour market has changed with fewer low skilled jobs than in the past.

Later in Section 3.6 they have an interesting chart that talks about whether different employment programs are successful:

-0.2% Public Sector Wage Subsidies (also known as pretend government jobs)

3.8% Compulsory, assisted job search (most unemployed do this)

9.7% Vocational Training (either on the job or at a training centre)

21.2% Wage subsidies in private sector (although this type of subsidy can be massively exploited)

The report is quite hard on temporary migration, meaning students or working holiday visa holders. At any one time there are nearly 400,000 people in Australia in these categories. They often do low end jobs which directly compete against the unemployed. They are often exploited and it has been an ongoing scandal over a number of years. And of course such people also compete against Australian workers. It is an eternal truth that if a foreigner has a job then an Australian does not have that job.

At the top of page 15 is this curious passage on immigration:

"On the whole, new migrants contribute positively to growth in living standards and the diversity of the Australian community, and have little impact (positive or negative) on employment and wages among the resident population."

Little impact? But aren't we always told that they have a positive impact? The statement links to a Productivity Commission report, which is a government agency, interestingly even they couldn't find too much positive to say on immigration. For a report that is directed at government and the media this is not a ringing endorsement. Later on in the paragraph the report states that they believe that temporary migrants do depress wages and working conditions.

We often wonder how many people there are in Australia who aren't White, it seems that it is 21% of Australias population, that 5,250,000. When I was born in 1970 it was around 2%.

The report is only 26 pages long and it told me things I didn't know and am glad that I do now know. I do however have two major issues with the report, firstly Immigration is only barely mentioned, maybe I want too much but I would have liked much more on this issue. Secondly most unemployed people are men, why isn't that mentioned anywhere? Why are we forgotten? 

Unemployment is an issue that has been around for 40 years and most people cannot even remember when politicians talked about restoring full employment let alone when it actually existed. It has a high cost, 80% of the unemployed are single, 50% are middle aged and older, 8% of the Australian Federal budget is spent on paying for unemployment.

The Reserve Bank of Australia regards "full employment" to be 95% of people who want work being employed, in other words 5% unemployment still counts as full employment. Currently Australia's unemployment rate is 5.4%, so as far as the economic planners are concerned their doing a marvelous job. I wish they were.

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  1. From a raw "Homo economicus" position, First World populations are presumed decadent since the end of the "Great Divergence". Corresponding has been the "Convergence" where post-colonial Third World nations are supposed to follow the growth patterns of the Asian Tigers. Economists then try to split the difference by inventing the "middle income trap".

    There's a favorite phrase among libertarians, "no such thing as a free lunch". That's how it will be for the nationalist movements. Immigration is deeply woven into establishment interests in property prices, universities and foreign policy. It also furthers the interests of many hundreds of millions for whom a low wage job in the First World, or even the Second World is a considerable improvement in living standards. To use a specific Australian example, live export of meat animals for halal slaughter. Banning it in OZ would shift much of the production to otherwise impoverished Somalia. Emigration of Somalis would conceivably decrease. But at significant cost to the OZ farmers.

  2. It used to be that Australia was thought to be white blue collar working class heaven. That is gone now forever? Some nations too for a long time had negative unemployment. Switzerland was one of them. That is long gone now too.