How to eradicate youth poverty

October 26, 2021
Raising JobSeeker and other payments to at least $80 a day would allow disadvantaged young people basic rights. Graphic: State Library Victoria

Workers have borne the brunt of the lockdowns, aimed at slowing the spread of the Delta variant of COVID-19. The high rates of transmission in essential industries, such as supermarkets, warehouses, essential retail, transport and healthcare, show that not enough was done to make those workplaces safe.

The closure of most other industries, while necessary to protect people and the health system from being overwhelmed, left millions of people without work. Workers were stood down without pay and told by employers that we were “not their responsibility”.

The Federal government’s disaster payment, for those who lost work under the pandemic restrictions, took a month to be extended to people already on JobSeeker and Youth Allowance. It only came after pressure from unions, community organisations and progressive politicians and, even then, we had to prove we had lost work. Those who were already unemployed received nothing.

I was involved in a campaign by workers at Annette Kellerman Aquatic Centre in Marrickville, who put up a fight to make Belgravia Leisure, the corporate managers, support workers. It developed into a campaign for income support and COVID-19 payments, such as test-and-isolate payments, vaccination pay and safer workplaces.

This campaign, and others like it, had some success, but lockdown measures made it difficult to organise.

The disaster payment was welcomed, although it was still insufficient and is now being wound back rather than staying in place until people find work.

Alison Pennington, senior economist for the Centre for Future Work, said timing payments to vaccination rates is a mistake because the economy and jobs do not snap back as people are vaccinated and lockdowns end.

Socialist Alliance Moreland councillor Sue Bolton said the move would plunge thousands of people into poverty.

Unemployment and underemployment

The unemployment rate in September was 4.6%. However, Pennington said these figures hide the significant rates of underemployment and underuse of those who want work but cannot find any.

Youth unemployment rose to almost 14% during the lockdown last year. The Grattan Institute reported that COVID-19 restrictions impacted businesses most likely to employ young people.

During the latest lockdowns in Sydney and Melbourne, 2.1 million people accessed the disaster payment. At the beginning of October, at least 1.2 million people were unemployed or underemployed.

ABC economics reporter Gareth Hutchens said unemployment rates do not show the true levels of unemployment. They discount anyone who is not available to start work immediately and there are so many reasons why people would not be able to start work including: child care; health and mental health concerns; study; and disability, among other reasons.

People without work may have taken up work in predatory gig-economy industries, such as food delivery with Uber Eats or its competitors. They often work for significantly less than the minimum wage, have few basic working rights and, during the pandemic, have had to put themselves at great risk of contracting the virus.

JobKeeper a poverty trap

Even before the pandemic, the rate of federal income support payments trapped people in poverty.

JobSeeker is $44 a day and Youth Allowance, the payment for students, is only $36 a day. This is significantly below the poverty line and leaves thousands of people having to choose to go without: feeding themselves; paying for medicines or visiting a doctor; or stuck in dangerous domestic situations.

It is hard to describe how all-encompassing poverty is for those like me on income support payments, all we can think about is how to get by.

Even for those like me who are able to work, the way Centrelink payments are set up discourages people from taking on more work.

There is a threshold of only $437 for fortnightly earnings, and once that is reached, payments drop. For example, if I work more than nine hours a week I start to lose funds from the payment while I essentially work for about $12 an hour — far below the minimum wage.

Once you earn $1317 a fortnight your payment drops to nothing. These arbitrary amounts put loads of pressure on low income workers and prevent people from escaping poverty.

There are significant health risks associated with poverty: strain injuries from physically demanding labor, such as stocking shelves or being on your feet serving food; eating more processed and unhealthy food; less access to gyms or recreational spaces; and the fear of not being able to afford health costs deterring people from visiting doctors, dentists and mental health professionals.

Access to education is also significantly lower. The best schooling is available to the wealthy who can afford private education (with public funding) while poorer socioeconomic areas and schools are underfunded. While programs such as the Higher Education Contribution Scheme (HECS) are sold as making university an option for more people, there are still many barriers to participation.

Many poor young people have to help their parents with paying rent and bills and so need to work. Generational disadvantage means people whose parents are not university educated are less likely to go to university. Even costs such as textbooks can be a real burden for poor students. Systems to address this amount to adding to HECS, loading up young people with even more debt when they graduate and start earning a paltry $47,014.

The cost of degrees, such as arts and social sciences, was doubled last year by the federal government. These degrees are often a first step out of poverty, as they have much lower barriers for access, such as lower Australian Tertiary Admission Rank requirements.

Another significant barrier for young disadvantaged people is housing.

House prices in Sydney and other major cities have skyrocketed in the last 10–15 years, thanks to a suite of rules and tax concessions that privilege investors. Sydney is the third-least affordable city in the world and the median price for a house is about $1.4 million. For many, including myself, owning property is a pipe dream.

This means many young people will be renting for their entire lives, paying off other people’s mortgages and lacking the stability that home ownership provides.

Conditions are even worse for international students, who are frequently paying high costs for low quality housing, forced to share rooms to be able to afford to live close to university, unable to access support payments and unable to work many jobs due to visa rules.

Domestic violence is also a significant problem for disadvantaged people who cannot easily remove themselves to safety. There has been a 73% increase in demand for services during the lockdown in NSW. Women are often stuck in dangerous homes because they cannot access or afford alternative housing. There are long wait lists for public housing and shelters are at capacity. The continued underfunding of these services puts domestic violence victims in danger.

Poorer people are also more heavily policed, with higher rates of incarceration in lower income areas. The most recent lockdown highlighted this: poorer areas in Western and South Western Sydney were subjected to much harsher restrictions and over-policing.

If the penalty for breaking a law is a fine, that law only applies to the poor. There are many cases where disadvantaged people, particularly First Nations women, have been arrested for being unable to pay a fine. People on welfare are overrepresented in jails; and even once released, police checks make it very difficult for formerly incarcerated people to find work.

There are many more factors that impact disadvantaged young people and these often compound on each other, making it difficult to break out of the poverty cycle.

These impacts pass down through generations, leading to ongoing trauma and disadvantage. It is important to note that First Nations people suffer much higher disadvantage, exacerbated by racist policies.

While complex problems require a range of solutions, a significant increase in income support payments is critical.

Many studies show that the best way to eliminate poverty is to offer more financial help. The welfare system is punitive and controlling. Recipients of payments have to report their income, fulfill mutual obligations requirements, such as applying for a certain amount of jobs each month, and attend regular meetings with job providers.

Thousands of people have been kicked off income support for failing to meet these harsh rules.


The Australian Council of Social Services, Australian Unemployed Workers’ Union, Living Incomes for Everyone, the Anti-Poverty Network, GetUp! and a range of community groups, unions and others want JobSeeker and other support payments to be raised to at least $80 a day or $600 a week.

This would ensure millions of people do not have to live in poverty and would significantly improve their lives. They also want mutual obligation requirements abolished and income management programs, like the Basics Card and the Cashless Debit card, scrapped.

Jeremy Poxon, anti-poverty advocate and Unemployed Workers Union spokesperson, said the Coronavirus Supplement payment, introduced during the COVID-19 lockdown last year, showed the government can bring millions of people out of poverty overnight.

Like many others, lockdown last year was the first time in my adult life I was living above the poverty line. Prime Minister Scott Morrison ended that supplement in March, claiming the emergency period was over, and has since refused to reintroduce it.

The Greens support the #80aday campaign, but Labor has refused to commit, thus removing any pressure on the government.

Bringing people out of poverty would have so many benefits. So why does the ruling class refuse to do it?

In his studies of the emergence of capitalism, the German philosopher and activist Karl Marx came up with the idea of capital needing a “reserve army” of the unemployed. He said it is central to the laws of motion in capitalism, serving two functions: First, to ensure that there is a reserve of labour in case of a sudden demand for labour; and, secondly, to keep wage rates low. Marx also theorised capitalists don’t pay workers the full value of their labour, which is how they profiteer.

If there were a proper safety net for the unemployed, workers would have a lot more power in the workplace. It would stop bosses from getting away with underpaying and exploiting workers, and create a greater ability to stand up to physical and sexual harassment in the workplace.

If being fired is no longer as big a threat because plenty of other jobs are available, or unemployment payments are set at a liveable rate, bosses’ power is reduced.

This would help drive up union membership and give activists greater ability to organise and agitate, without worrying about how we are going to pay bills. This is why the plight of unemployed and poor people should be taken up by unions and all progressive parties and organisations.

The only reason right-wing parties support any form of welfare payments, considering it goes against their market-driven, individualised ideology, is because it helps placate masses of workers — employed and unemployed.

If there were no safety net at all, the reasons to demand change and to organise against the ruling class would be clearer.

The welfare state was first established during the 1930s as a response to the Great Depression. Welfare systems were established to quell revolutionary sentiment in the revolutionary period surrounding the French and Russian revolutions.

The current system in this country is designed to keep people in poverty, and to push the lie that it is their individual fault and not a fundamental tenet of the class system.

Raising JobSeeker, Youth Allowance and other welfare payments to at least $80 a day and bringing millions of people above the poverty line would hold enormous benefits for the whole of society, not just unemployed people.

But that isn’t the only solution to the poverty crisis. Pegging support payments to rises in the cost of living must also be accompanied by a massive public investment in public housing, free childcare and education, improved renter's rights, greater access to healthcare. A society that puts people and the planet before profits has to be our goal.

[Zoe O'Dea and Isaac Nellist are members of Sydney Socialist Alliance.]

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