Problem is lack of jobs, not ‘dole bludgers’

January 24, 2014
Last year, unemployment increased by more than 5000 people a month.

The one thing that we can expect with some confidence this year is an increase in unemployment. An analysis of Australian employment statistics for 2013 shows that jobs growth was at its lowest level for more than 20 years.

Last year, unemployment increased by more than 5000 people a month. In the month of December, the economy lost 23,000 jobs, making last year the weakest calendar year of jobs growth since 1992. The number of officially unemployed increased by more than 9% to 722,000.

Although the official jobless rate stayed at 5.8% this was largely because the participation rate (the share of the working-age population that is either employed or actively seeking employment) has fallen from its 2010 peak of 66% to 64.6%, an ABS quarterly job vacancies survey said on January 15.

ANZ’s monthly job advertisement figures continue to fall while NAB’s business survey shows that companies planning to cut hiring exceed — by more than 8% — those planning to take on new employees.

The working-age population has been growing by about 30,000 people a month while the number of jobs has risen by just 4500 a month. One of the consequences of this stagnation is that it is already increasingly difficult for those unemployed to find work. Before the global financial crisis, 26% of unemployed were able to find work within a month. This figure is now down to 19%, the lowest level since 2000.

The decline in manufacturing jobs will also raise unemployment in Victoria and South Australia, with regional centres like Geelong particularly hard hit.

These sobering statistics come before the expected downturn in mining investment and the federal government budget cuts that are increasingly looking like a recipe for recession.

These cuts are likely to include further attacks on what social services minister Kevin Andrews described on January 21 as an “unsustainable” welfare system. His proposed remedies include “large and urgent” changes to the disability pension and the general unemployment benefit. He made no comment on the sustainability of the $10.5 billion a year in corporate welfare given to industry.

In response to the minister’s comments, Maree O’Halloran, president of the National Welfare Rights Network, said welfare payments data showed that “the level of income support reliance among the working-age population is now at historically low levels”.

Labor has no plan to deal with rising unemployment. At a press conference on January 19 to mark his first 100 days in opposition, Labor leader Bill Shorten pledged to offer a “moderate” alternative to his “right-wing” opponents.

If it was in any way serious in its concern for the unemployed, Labor should be advocating an increase in the woefully inadequate and disingenuous “Newstart” allowance, which is a miserly $255 a week for single people. Unfortunately, the fact that it will not is a certainty.

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