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Obliging dole bludgers or bludgeoning Australia’s skills
base?
By Tim Martyn
First published on Online Opinion
Tuesday, 14 March 2006
Australians tend to agree that giving a hand up to those in need
is better than a hand out. Yet with the success it has achieved
among very long-term job seekers, perhaps the Federal Government’s
“mutual obligation” policies are better described as
a backhander to Australia’s most disadvantaged job seekers.
The problem with Australia’s approach to reducing unemployment
among this group is simple: the “mutual obligation”
policies employed by the Federal Government require long-term income
support recipients to “give something back to the community”
by forcing them into compulsory work activities unrelated to finding
a job. Rather than identifying and addressing the potential barriers
preventing unemployed people from getting off welfare, the Federal
approach presumes that, in all cases, continued unemployment is
caused by job seekers’ poor attitude towards work.
This policy has failed those most in need of significant labour
market assistance. The role played by labour market training has
been largely ignored in favour of an ideologically inspired “welfare
to work” policy on the cheap.
The consequences of these shortcomings have been telling. Despite
a decade of record economic and employment growth, between 1999
and 2004 the number of people who have been on unemployment benefits
for more than five years grew by 68 per cent, from 75,000 to almost
127,000 people.
The individuals represented by these statistics have often left
school early without ever having obtained a vocational skill, or
are formerly retrenched workers from Australia’s rusting manufacturing
industries. In every case, they face multiple barriers to find and
keep work - barriers that are not overcome by the politics of blame.
Emphasising the responsibility of unemployed people to find work
is not in itself problematic. Shifting some of the onus for finding
and keeping a job onto the shoulders of individual job seekers represents
a pragmatic response to the escalating costs of supporting and retraining
unemployed people. However, the Federal’s policy places the
responsibility upon low-skill and no-skill job seekers to solve
their own unemployment crisis through a “work first”
approach which largely ignores vocational training. Without an increase
in the labour market training component of our unemployment assistance
program - Job Network - Australia is unlikely to improve employment
rates among the most disadvantaged.
Adult education and training in Australia are chronically under-funded.
The level of public investment in labour market training is pitifully
low: of the 30 members of the Organisation for Economic Co-operation
and Development (OECD), only Poland and the Czech Republic spent
less, as a proportion of GDP, than Australia.
The Federal Government's current attitude to labour market training
reflects the neo-liberal view of education and training as primarily
an individual responsibility: that since benefits accrue to those
who gain a vocational qualification, individuals - not the state
- should be primarily responsible for meeting their cost. This argument
may have some merit in the higher education sector, however, the
“mutual obligation” placed on disadvantaged job seekers
to pay for their own training has helped swell the ranks of underemployed
while contributing to Australia’s growing skills crisis.
One frequent criticism levelled by Job Network providers, who manage
“Work for the Dole” community work projects, is that
the Department of Employment and Workplace Relations limits the
amount of money community work co-ordinators can spend on training
participants: no more than 12 per cent of project funding. This
led Ann and John Nevile to claim in their 2003 report Work for
the Dole: Obligation or Opportunity, that “95 per cent
of community work co-ordinators … would like to incorporate
more training in their projects than is allowed for under Departmental
guidelines”. They explained that, without more training, participants
in Work for the Dole projects are unlikely to gain the skills necessary
for them to move from “welfare to work”. Subsequently,
only 14 per cent of Work for the Dole participants end up in full-time
work.
Rather than emulating the US “workfare” approach to
unemployment, Australia should look further afield. Countries like
Denmark have invested heavily in active labour market policies,
such as publicly funded and supported vocational education programs,
to address entrenched long-term unemployment and skills shortages.
Having compared a number of the “welfare to work” strategies
(pdf file 165KB) employed across the OECD, it is clear Denmark’s
model has been the most effective at reducing welfare dependence
over the last 15 years. The Danish example shows an education and
training model can achieve both significant rates of mobility (moving
unemployed people back into work) as well as reductions in welfare
dependence and poverty.
Government investment in education and training are crucial in
assisting modern economies to keep pace with the changing skill
demands of a changing world. With the right mix of incentives and
activity obligations, even the long-term and very long-term unemployed
people can be assisted back into employment.
Both state and federal governments are starting to wake up to the
consequences of declining public investment in training and education.
In February this year, the Council of Australian Governments (COAG)
announced its concern at stagnating workforce participation and
productivity rates, releasing a national reform agenda entitled
Human Capital Reform.
The report identified the need for more adults to acquire post-compulsory
vocational skills qualifications to address this problem. What was
less clear in the report was how this agenda would be funded, and
by whom.
Two things remain certain: first, as long as the burden for improving
Australia’s levels of vocational skills lies with Australia’s
private households, the national skills crisis will continue to
plague our labour market; second, while low-skilled unemployed people
are expected to fund their own retraining, unemployment among those
unemployed for five years or more will continue to grow.
At a time when our labour market attitude is plagued by skills
shortages, “short changing” unemployed people on skills
training is a policy problem which must be addressed. While the
short-term costs may be hard to swallow for a Federal Government
committed to reducing expenditure, the long-term costs of the ongoing
welfare dependence of unskilled people, in addition to those of
a continuing skills shortage, are far more unpalatable propositions.
Joint research : the
Mutual obligation franchise
Tim Martyn is a regular writer for vibewire.net, is the theme editor
for the Department of Victorian Communities YouthCentral site and
as his day job is a Policy and Research Officer for Jesuit Social
Services.
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