Australian unemployment hits 12-year high

Saturday, August 16, 2014

One of the promises Prime Minister Tony Abbott made when he was elected last year was to create 1 million jobs over the next five years. This translates to a monthly increase of about 17,000 jobs. Yet in the 10 months since September last year, only 11,000 jobs a month have been created – and more than half of these were part-time jobs.

The latest unemployment data released by the Australian Bureau of Statistics on August 7 shows that official unemployment is at a 12-year high of 6.4%. The number of people unable to find work now stands at almost 790,000, which is the highest level since February 1997. These figures would be higher still if not for a decline in the participation rate to 64.7%.

When disaggregated on a state basis, the situation is even worse. Only Western Australia and New South Wales have unemployment rates below 6.4%. In Tasmania the rate is 7.6%.

The employment prospects for younger job-seekers are the bleakest in 17 years. The unemployment rate for the 15-19 age group's up from 17.8% to 20.4%. For those in the 15-24 age bracket, the rate is greater than 14%.

Australia’s official unemployment rate has now surpassed that of the US (6.2%) and is on a par with Britain (6.5%). The one unfortunate certainty seems to be that unemployment will continue to worsen with the end of the mining boom and the tens of thousands of job losses to come in the manufacturing sector.

In his response to the rising unemployment figures, Treasurer Joe Hockey made no mention of his government’s broken promise on jobs. Instead he held out another promise. This was the prospect of cutting taxes to lift growth and create more jobs if the budget measures held up in the Senate were passed by the ALP, Greens and independents.

The idea that the so-called free market can solve the problem it created is the triumph of neoliberal ideology over reason.

It ignores the fact that between 2003 and 2008, 1.4 million jobs were added to the economy, but this was halved in the five years to 2013. The latest figures confirm a continuing decline.

If the budget measures proposed by this government are enacted, they will penalise the unemployed by deliberately driving them into poverty. This is the promise the Coalition conveniently forgot to mention before the election.

These draconian measures are a replica of those already in place in Britain. They led to the death last year of a 59-year-old diabetic whose income support was cut off entirely as punishment for supposedly not taking his search for work seriously enough. He died from an acute lack of insulin after his electricity was disconnected. This meant that the fridge where his insulin was kept was no longer working. His body was found surrounded by a pile of resumes.

The Office for National Statistics says there are 2.7 million people in Britain on zero-hour employment contracts. The Unite union estimates the real figure at 5.5 million. The hotels and restaurants sector, together with the health and education sectors, are the largest users.

Under a zero-hour contract, employers “contract” to provide no work while employees are contracted by coercion to be permanently “on call” — a concept that manages to overturn centuries of contract law. They also managed to erase Marx’s “reserve army of labour” by establishing as fact the fiction that those who are unemployed are actually at work by being on “stand-by” without pay.

If an unemployed person in Britain refuses to accept such a contract, they face the prospect of losing their already woefully inadequate unemployment benefits for up to three years. How long before Hockey latches on to compulsory zero-hour contracts for the growing number of unemployed?

On present figures, 113,000 unemployed people under-30 will be denied benefits for six months from July next year under the Coalition’s plan.

It is not enough to just oppose the further marginalisation of those who are unable to find work in a deteriorating labour market. The unemployed are entitled to a living wage. This is not a new, radical demand; it was universally declared a human right more than 60 years ago.

The proposals from the Australian Council of Social Service for an immediate $50 increase in the Newstart Allowance and an independent commission of experts to assess the payments needed by people to meet basic living costs is a good start.

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From GLW issue 1021