an autodidact meets a dilettante…

‘Rise above yourself and grasp the world’ Archimedes – attribution

Newstart problems

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Australia has been described as a/the ‘lucky country’, and considering that we’re thrown into the world, with no choice as to parentage, genetic inheritance, social environment or time period (or species, for that matter), it’s pretty clear that being born or brought up in Australia in the second half of the twentieth century constitutes a lucky deal for most. I’ve recently been reading, with a deal of squeamish reluctance at times, stories and histories of the struggles and sufferings of today’s Palestinians, either under Israeli authority or in impoverished and humiliated exile, which has further emphasised for me my sense of my own luck in the dice-throw of life.

But of course there are problems and inequities here too. I haven’t written much about Aussie domestic issues, having been strangely mesmerised by the Trump train-wreck and other exotica. Australia seems boringly stable by comparison, though somewhat influenced by the conservative, isolationist turn taken by advanced and not-so-advanced nations elsewhere. Certainly our current conservative government has succeeded in maintaining power, much like governments elsewhere, by doing virtually nothing. No energy policy, no healthcare policy, no education policy, no attempt to deal with the long-term refugee situation offshore, no employment policy, and of course as little taxation as can be gotten away with. This is what they describe as ‘responsible government’ – don’t do anything which will draw attention let alone criticism. The best governments should be invisible, not to say inert – for, as Reagan more or less said, government is always the problem, never the solution.

Which brings me to the subject of this post – employment, unemployment and Newstart, the interestingly named allowance given to jobseekers under Australia’s welfare system. Our country’s principal advocacy agency for the poor, the Australian Council of Social Service (ACOSS) has been campaigning for some time to ‘raise the rate’ of Newstart, which currently sits at around $39 a day, a figure which, it says, hasn’t changed in 25 years. The question of raising the rate became a hot issue in the recent federal election, with Labor making noises about the poverty trap problem, but failing to commit to any changes. Only the sadly unelectable Greens had a policy, promising to almost double the rate to $75 a day. All of this amid claims that various policies and strategies are aimed at maintaining a pool of unemployed at a certain rate that’s beneficial to the overall economy. Of course the cost of unemployment to government is related both to the amount paid and the number of unemployed. The unemployment rate is always a dodgy measure, as people can be employed part-time, or voluntarily, or simply doing questionably useful things like writing blogs… We don’t look at the unemployment rate of birds, or sharks, but we can be sure there aren’t too many of them wasting time tweeting inanities and cheating at golf…

It’s also been pointed out regularly enough that, if unemployed people aren’t contributing by making lovely foamy shapes on our daily lattes, or adding to the rate of diabetes and diet-induced heart conditions, they’re at least contributing to the economy by spending their dole on whatever’s needful for their survival. And if they were given a little more – as, say, advocates of a universal basic wage would have it – the flow-through would arguably be even more helpful.

Whatever the definition of ‘unemployed’ might be, it hasn’t changed here for some time, so the rate can be reliably compared to previous months, years and decades. It currently sits at 5.2% and hasn’t changed much over the past year or more, but it seems the underemployment rate is on the rise, and advertising for jobs is dropping. There’s also been a gradual trend in rising unemployment and underemployment among older people, and this is a feature of particular interest to me. There are mutual obligation requirements for everyone on Newstart, though they’re different for those between 55 and 59, and they change again for those 60 and over, though it’s not easy to work out the details from Centrelink’s website.

If you’re registered with the Department of Human Services online portal, MyGov, you can find out what a person’s commitments are for obtaining a Newstart allowance. For a start you have to agree to and sign a Job Plan, overseen by a service provider. For older clients, the person engaged in this supervision is often young enough to be their daughter – or grand-daughter if you’re lucky/unlucky. As part of this Job Plan, you need to have looked for 20 or 30 jobs in the previous month to continue getting benefits, and to show proof of this to your provider. I believe the number is actually 20, though I know of one person over 60 who was asked to do 30 a month, and when he asked about voluntary work he was told that was all fine, but he still had to fulfil the obligation of applying or inquiring about 30 paid jobs per month. Possibly he was informed incorrectly, but it’s an indication of the kind of thoughtless humiliation some older jobseekers are put through. The undervaluing of voluntary work is, of course, a common theme in modern post-industrial society. The current government, for example, in resisting any increase to the Newstart allowance, insists in interview after interview that Newstart should always be seen as a temporary payment, a bridge to paid employment – no matter the age of the recipient. It seems that talk of voluntary work as a value in this area is strictly forbidden.

Unemployment is often seen as primarily a youth problem, but an ACOSS report from September last year states that only 17% of Newstart and Youth Allowance recipients are under 25, while 43% are over 45, with that older percentile growing. Changing work practices and automisation are likely to exacerbate this trend. Government spokespeople, including ministers, continually argue that there is plenty of work available, as long as people are prepared to move, but this is hardly an appealing option for older people, whose social and family lives have become, over time, connected to a particular region. Politicians often spruik about a flexible, mobile workforce, but there’s a clear clash between hyper-mobility and building and maintaining communities.

There is also the question of whether politicians are sincere in claiming that they want full employment – whether it has ever been a target to aim for. There is apparently a theory popular among economists that if the unemployment rate drops below about 5%, the lack of labour supply will give workers more bargaining power in terms of wages and conditions, to the ‘detriment’ of employers – the favoured sector of conservative governments. It’s notable that the current federal government has recently started a new round of union-bashing. So it’s quite plausible that these conservatives are playing a double game here – blaming the unemployed for their predicament while seeking to maintain a sufficient pool of unemployed to stifle wages growth. Wages have certainly been stagnant here for some time (especially for low wage earners – see the graph above), while CEO salaries continue on an upward spiral. It’s worth noting, however, that the RBA is talking about the need for ‘spare capacity’ reduction in the marketplace, which would be assisted by a reduced unemployment rate. Such reduction would bring higher levels of growth to what is currently a sluggish market with a 1.3% inflation rate.

Meanwhile, there are many other issues with Newstart. DHS administrative data from two years ago revealed that some 25% of recipients had a significant disability. Most of these disabilities were physical but unsurprisingly depression, anxiety and hypertension were reported as common problems among the unemployed and underemployed. It’s unlikely that many of these people could afford adequate treatment. Young people on the payment are struggling with rents and utilities while trying to live on part-time, unreliable jobs. Pay rates in vital but under-funded and under-respected jobs in aged care, for example, are inadequate – and often the work is too demanding as a full-time occupation. There appear to be problems with inadequate and poorly targeted training courses that young people – and some older people – are shunted into in order to meet their obligations. Then there’s the problem with Centrelink’s automated communications system – a cost-saving measure that’s causing plenty of headaches for recipients. I won’t go into detail here, but it’s certainly getting harder to talk to real people if you’re unemployed, with all the automated messages you’re bombarded with – many of them providing misleading or incorrect information – being marked ‘no reply’. It all adds to the humiliation of the experience, to the sense that you’re not being dealt with as a real person. The estimated cost-saving to the government of this increased automation – some $2 billion – will help to make up for the revenue lost from tax cuts to the nation’s highest earners. And so it goes…

Written by stewart henderson

August 4, 2019 at 11:29 am

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