The current welfare debate in all its scapegoating glory deals almost entirely with the supply side of the problem. The argument goes: there are many people on unemployment and other benefits who could work and there is a labour shortage, ergo the problem is with the labour supply, with that pool of unemployed people who demonstrably fail to fill these jobs. Therefore the problem will be solved by a few carrots and lots of sticks to get the slackers off their arses.
This approach does serious damage to the genuine job seekers out there who desperately apply for jobs they cannot get. There are thousands who are every day ritualistically applying for jobs and suffering another bloody rejection, or attending interminable courses that don’t seem to relate to employer needs. They are not the main problem in labour market mismatches. The debate fails to look at the demand side, which covers both the quantum of jobs available and the attitudes of emplopyers to those who apply for them.
Right now, there are just not enough jobs on offer to accommodate even a relatively small percentage of those looking. The Internet Vacancy Index compiled by the Department of Employment for March 2011 shows that there were 239,633 jobs on offer nationally. There were relatively few low skilled level jobs — most required qualifications. Only 32,347 jobs did not require applicants to have a Cert II or higher qualification. At the other end, 92,338 asked for a university degree or higher.
Are employers looking for higher formal credentials than jobs actually need to ensure they don’t have to offer training themselves? Many skills that were once learned on the job are now assumed to come via VET certificates 2 and 3. Older workers with no papers but experience are hence much more likely to miss out at the application stage.
There are more mismatches too. At the top end of the job ads, nearly 100,000 jobs were on offer for managers and professionals, nearly 30,000 were for tradies or technicians and 44,500 were jobs for clerical and admin people. So even with the best will in the world there will be relatively few jobs for those unemployed people without specific qualifications and experience. A mere 18251 jobs is the total number on offer in the bottom category.
The labour supply side is so much bigger than the demand side. There are well over a million people out there who want a job or more hours. They include the 230,000 plus on Newstart, the 600,000 looking for work in the ABS monthy surveys, the other ABS counts of 800,000 who are looking for more hours and the 100,000 plus discouraged workers who stopped looking but would take a job if it were available. Add to these maybe 100,000 people on Disability Support pension who also would like to work and may be pressured to do so, and many sole parents being pushed to find jobs, and the total increases.
Allowing for some overlap in the first two categories still leaves a possible supply of labour totalling around one and a half million people — chasing a quarter of a million jobs. That is a ratio of one job per six job seekers. And that doesn’t count the unknown number of people who just move straight from one job into the next without ever being unemployed.
Consider the requirements for those jobs as set out above and the ratios become very scary. For those with few qualifications and little experience, the odds are not good.
And all this assumes that all job hunters will be treated fairly by employers who are sifting applicants for their jobs. While some of those looking for work may qualify in terms of skills and qualifications, far too many miss out because of other factors. They have some other form of employer perceived disadvantage, such as being older, or they may have some form of "handicap" in the eyes of the demander. This may include a long time out of work, some form of disability or being identifiable as a member of an employer defined undesired workers group, such as parent of a young child or a carer. Even an odd surname may mean you are eliminated before even being interviewed. Accents and other indicators of ‘not fitting in’ are often enough to take applicants off lists.
The data on recipients of payments show age as a factor in unemployment at both ends of the spectrum, with people being deemed both too young and too old. Of the 102,100 discouraged job seekers 54,800 (54 per cent) were aged 55 years and over and 125,000 of those over 45 on unemployment payments have been on these for over 12 months.
Therefore any package for change that is on offer should take a serious look at employer attitudes — how prepared are employers to review what they are asking for? If employers are prepared to take more risks with those who have had time out, or may not have the paper but do have the skills, some injustices may be reduced. Employers need to increase their training for jobs on site and also look at older workers and other more diverse characteristics that they are less familiar with. They need to offer work experience to those who have been damaged, with help and subsidies, and recognise that this pays off in the long run.
The unemployed also need help. More effective training that is related to specific jobs, more work experience and access to good case work may be very useful for those who have been damaged by long term unemployment. They need the supports that will guarantee that if they try, they will be treated seriously by employers. Many longterm unemployed people have not had that experience.
In the end there are not enough jobs to go around to all who want and need them. Taxpayers have to a offer reasonable level of income support — not the present minimal level — as well as engagement in longer term education and training. This will equip people for future demands. We are an ageing population which means labour demand will increase — but we should not undermine our future supply by bullying them to look for jobs that do not exist.
So finally, a note to both Julia Gillard and Tony Abbott. Can you briefly stop squabbling about who is the loudest beater of the dole bludger drum and which of you thought up the bad plan in the first place. Stop channelling a 19th century poor law parson in pursuit of the sinful idle bodies and recognise that we do not have enough jobs for all.
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