Getting Serious About Australian Unemployment

September 11, 2017

Is the Australian Government giving up on reducing unemployment

It’s time to get serious about reducing Australia’s unemployment rate. We need a national training policy that gets Australians to work.

Those were the words that came to me when I read Stephen Koukoulas’ article, “Australia has given up on solving unemployment”, (The New Daily, 17 August 2017).

“It is a sad state of affairs to realise that the current crop of Australian policy-makers have effectively given up on reducing unemployment. Treasury reckons that the lowest the unemployment rate can go without there being a wages and inflation breakout is around 5.25 per cent,” Koukoulas writes.

“The Reserve Bank of Australia notes something similar, forecasting that even when the economy is growing strongly at an above-trend pace, the unemployment rate will hover between 5 and 6 per cent,” he continues.

Australian unemployment remains persistently high

Australian Bureau of Statistics (ABS) July 2017 figures show unemployment in Australia at 5.6%, an official figure of 728,100 people: “Enough to fill the Melbourne Cricket Ground about seven times,” Koukoulas writes.

Koukoulas analyses Australian Treasury and Reserve Bank of Australia (RBA) reports, and concludes that, “Australia will never see fewer than about 700,000 people unemployed – no matter what kind of improvement we see.”

He’s not the only one outlining that prospect. Trading Economics, a New York City company that analyses 196 countries, including “official sources of historical data for more than 20 million economic indicators, exchange rates, stock market indexes, government bond yields and commodity prices”, also predicts that Australia’s unemployment rate in 2020 – 3 years from now – will be … 5.6%. That’s correct, no change at all.

Koukoulas compares Australia internationally: “It seems to be a peculiarly Australian issue. In the US, the unemployment rate is 4.3%, in the UK it is 4.5%, in Japan it is 2.8% while in Germany, the unemployment rate is 3.9%. It is clear the government has given up on reducing unemployment.”

Unemployment hits the most vulnerable and most disadvantaged in Australian society

What Koukoulas does not detail are the social, economic, regional and generational costs of persistent unemployment. This is how the Australian Parliament’s Standing Committee on Employment, Education and Workplace Relations describes the consequences of unemployment:

Unemployment is a major life event. It can have a devastating impact on people’s lives. It affects not just the unemployed person but also family members and the wider community. The impact of unemployment can be long-lasting. As unemployment becomes more long-term, its impact becomes more far reaching, often affecting living standards in retirement. The loss of income by the parents can damage the prospects of the next generation.

Unemployment disproportionately impacts Australia’s most disadvantaged groups: young people, Indigenous Australians, rural and regional residents and people with disabilities.

Young people (generally ages 15 to 24) in Australia had an official unemployment rate (July 2017) of 12.9%, more than double the national rate of 5.6%. According to Dr Patrick Carvalho:

– The damaging effects of youth unemployment can persist into adulthood, with different intensity and longevity depending on the length of the unemployment period and on individual conditions such as education levels and socioeconomic background.

– There is no minimal or safe threshold regarding the length of early unemployment experience…. the longer a person is unemployed, the longer the perversive effects are likely to last.

– Such negative long-term consequences of early jobless spells are commonly referred to in the literature as the “scarring effects”. (p. 19, Youth Unemployment in Australia, Centre for Independent Studies, November 2015)

Youth unemployment impacts are not felt uniformly, with the national figure masking high concentrations in many locations, especially regional and rural Australia: unemployment rates of 28.4% in outback Queensland, 21.8% in NSW Hunter Valley (outside Newcastle), 20.5% in Cairns, 19.6% in southeast Tasmania, 19.5% in mid north coast New South Wales, 19.4% in mid north South Australia and 18.4% in south eastern New South Wales. (Source: “Australia’s Youth Unemployment Hotspots: Snapshot”, The Brotherhood of St Laurence, March 2016.)

The growing youth under-employment – those who wish to work more than they do – now at 18% (February 2017), “is the highest in the 40 years since the count officially began,” according to the Brotherhood of St Laurence’s “Generation Stalled” Report. Add the two figures together – unemployment and under-employment – and you get a staggering 31%, almost one-third, of young Australians who are “underutilised”. Surely this “underutilisation rate” will be much higher – possibly 50% or more – in many regional locations. Are we in danger of allowing a sub-generation of unemployed and underemployed young people to “fall through the cracks”, with long-term life consequences for them, their families, their communities and our country?

It’s not just young people:

It’s time for a national training policy that targets reducing unemployment

Australian unemployment should be below 5%, not drifting towards 6%. “In addition to the obvious social benefits of having a highly skilled population, maximising training and educational attainment should be an uncontroversial policy aim,” Koukoulas says.

Koukoulas believes that the Australian “unemployment rate is being skewed by a number of longer-run structural factors,”, including an “education and training system mean that those who are unemployed do not have the requisite skills for the modern Australia economy.” Australia is “heavily reliant on imported skilled workers who arrive here via the 457 visa program,” he writes.

“Yet the government imposes cuts to trades training, is underfunding school education, ramping up university fees and forcing those who get a degree to pay for it more quickly,” he continues.

It’s not too late to invest in Australian training. Australia is endowed with extraordinary natural resources, extensive wealth, dynamic and hardworking people. We have one of the most welcoming societies in the world and are the “most successful immigrant nation on Earth”, according to demographer Bernard Salt.

Despite years of vocational education and training (VET) policy chopping and changing by governments of all political stripes, we have still maintained the framework of an internationally recognised and admired training system.

We have the capacity. We have the skills to make it happen. What we need now is the will and the focus. The desire to place training at the TOP of the national policy agenda, not an “also ran” issue.

Australia’s Community VET sector

Australia’s community education VET sector can and will do its part to address unemployment. The year 2016 saw a rise of the community sector’s VET students to 9% of the national total.  The community education sector does very well at ensuring unemployed people can be lifted into employment: according to the NCVER, in 2016 community education providers topped all categories (TAFE, private for-profit, university), with almost half (48.9%) of graduates employed at the end of the training that had not been employed prior to commencing their study.

We address the needs of vulnerable and disadvantaged people, and we over-perform in regional and rural Australia, where VET is most needed and valued.

(Note: This post was originally published by Community Colleges Australia on 11 September 2017. View the original version here.)

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Wealth and inequality in Australia

August 17, 2016

For those looking for a definitive statement on wealth and income inequality in Australia, the Australian Council of Social Service (ACOSS) report from last year, Inequality in Australia: A Nation Divided, continues to resonate.  Here is a 2 minute video that accompanies and illustrates the report:


Putting ‘community’ back into Australian vocational education and training

May 11, 2016

My blog post entitled ““Re-inserting ‘community’ into Australian Vocational Education and Training” has just been published by Open Forum (11 May 2016).

In this article, I discuss how in the lead up to the federal election on July 2, Australian vocational education (VET) has now entered the political debate. I argue that the most cost-effective VET policy initiative is to reinvigorate the community education providers and build on their capacity.

I discuss the VET FEE-HELP loan scandals, the collapse of private for-profit vocational education colleges and how VET has entered the political debate – given a high priority by Bill Shorten (Leader of the Opposition) in his “Budget Reply” speech last week, and the recently announced Commonwealth Discussion Paper on the re-design of VET FEE-HELP.  I conclude by describing the vitality and importance of community education – particularly in regional and rural Australia, ending with a message to the politicians of all political persuasions: reinvigorating the community education providers and building on their capacity, can and will be one of the most cost-effective VET policy initiatives you can implement.


Social and Digital Inclusion

November 29, 2015

I’m a bit late on this one, but last week (21-29 November 2015) was “Social Inclusion Week” here in Australia.

To mark the week, the Australian Communications Consumer Action Network (ACCAN) published a short piece on 23 November 2015 entitled “Why digital inclusion matters”.  Key points from that article:

  • Australian Bureau of Statistics figures show that “in 2012–13, 98 per cent of households with a household income of $120,000 or more had internet access, compared to only 57 per cent of households with a household income of less than $40,000, suggesting an ‘affordability divide’ when it comes to broadband.”
  • “Lack of digital literacy is an increasingly significant issue as more government services move online as part of the Federal Government’s Digital First Strategy which will require all services and public interactions to be available online by 2017.”  ACCAN’s concern is that “a lack of digital literacy will affect some consumers’ ability to access essential Government services”, particularly because of our continuing need to update our “digital capability to stay in touch and [be] included due to updates to technology and changing applications”.

Click here to see my recent articles on digital inclusion, including my paper on that topic that I presented to the Communications Policy and Research Forum in Sydney in November 2011.


Western Sydney the big loser in gambling

October 28, 2015

Gambling is in the news here in Sydney, and it looks like Western Sydney residents are the biggest losers.

Last year, Francis Markham (ANU) and Martin Young (Southern Cross University) wrote in The Conversation:

The growth of “Big Gambling” in Australia is an ongoing class project. It is one that has transferred, with industrial efficiency, billions of dollars from the pay packets of the working classes to the bank accounts of a super-rich elite.

Setting aside the inflammatory “class warfare” language, is it true?

Guess what, we in Australia lose more money from gambling, per person, than any other country in the world, some $20 billion, the majority of that from “poker” machines (Americans call them “slot machines”).

When I was the CEO of the Rural Health Education Foundation some years ago, my board of directors had an interesting response when we staff (naively) suggested approaching a gaming foundation for money. No, they said firmly, the majority of them rural General Practitioners. Gambling is one of the worst contributors of mental health problems and family breakdown in rural and remote Australia. Not something you would think that your family doctor spends a lot of time thinking about. But it’s true, they do. So gaming money joined tobacco and alcohol on our list of untouchable sponsorship.

Earlier this week, the issue rose again, with an article in The Sydney Morning Herald by James Robertson and Jacob Saulwick on October 26, 2015, entitled “Poker machine profits come from Sydney’s poorest suburbs”.  The key points:

  • Four of the five suburbs registering the fastest-growing and largest losses are ranked Sydney’s top-five most disadvantaged areas. More than one-third of the recent $7 billion gambling increase comes from these areas.
  • The “top five” Sydney suburbs for gambling: Fairfield (Sydney’s most disadvantaged suburb), Canterbury and Bankstown (the second and fourth most disadvantaged areas), Holroyd (seventh) and Auburn (fourth).

This accords with what Markham and Young wrote back in early 2014:

In Fairfield … each adult resident lost an average of $2340 on the pokies in 2010-11. Across the harbour in Ku-ring-gai and Willoughby, whose residents are among the richest 6% in Australia, poker machine losses were just $270 per adult.

A comment by a former gaming executive in the Herald article: “In the eastern suburbs you’ll get larger individual bets but they’ll lose less overall [because] they don’t have the time.”

As much as we can talk about maintaining “social safety nets”, here’s the issue: it’s some of the poorest Australians who are losing the most money on gambling.


Indigenous imprisonment in Australia: a crisis of mass incarceration

April 2, 2015

(The following post was originally published on 12 March 2015 on Open Forum.  I am taking the liberty of re-printing it here, and adding an addendum at the end of this post.)

In mid-February of this year, the Australian Prime Minister presented the annual “Closing the Gap” report to Parliament. Although some indicators saw improvement (health), in others – especially in education and employment – there was almost no improvement at all.

Of great concern is the statement on page 28 – of which little fanfare was made at the time – that, “the rate of imprisonment is higher than at any time during the decade”. The decade? In other words, Indigenous imprisonment has been steadily rising and is worse than any time in recent memory. That’s not just “no improvement”; it is a serious step backwards.

For anyone paying attention to the statistics on Indigenous disadvantage, this comes as no surprise. In December of last year, the Productivity Commission’s report, Overcoming Indigenous Disadvantage: Key Indicators 2014, made this point clearly (pp. 4.102-4.104):

  • Nationally at 30 June 2013, the Aboriginal and Torres Strait Islander imprisonment rate was 2039.5 per 100,000 adult population, an increase of around one‑third from the rate in 2000 (1433.5 per 100,000 adult population).
  • Although Aboriginal and Torres Strait Islander adults make up only 2.3 percent of the Australian adult population, they accounted for 27.4 per cent of all prisoners. (Note: the Indigenous population is heavily skewed to younger ages, with the national percentage of population about 3 percent.)
  • After adjusting for differences in population age structures, the rate of imprisonment for Aboriginal and Torres Strait Islander adults was 13 times the rate for non‑Indigenous adults.

Let’s be clear about what these figures say: more than one-quarter of people in Australian prisons are Indigenous, a rate more than ten times (1000%) their population percentage. When age is adjusted (thus comparing “like with like”), the figures are even worse: thirteen times (1300%). But it gets worse.  The report also states that:

  • Between 2000 and 2013, the rate of imprisonment for Aboriginal and Torres Strait Islander adults increased by 57.4 per cent while the non-Indigenous rate remained fairly constant, leading to a widening of the gap (from 8.5 to 13.0 times the rate for non-Indigenous adults).

What this means is that Indigenous imprisonment rates have GONE UP by 50% in the last 13 years, while non-Indigenous rates have REMAINED THE SAME throughout the same period. In other words, the figures for Aboriginal and Torres Strait Islander Australians have gotten worse and not just a little – A LOT worse. You can track the inexorable year by year growth of Indigenous imprisonment through the Australian Bureau of Statistics figures. Although there are some state variations (Tasmania is the best, Western Australia is the worst), this is a systemic national problem which demands a national solution.

Mick Gooda, the Aboriginal and Torres Strait Islander Social Justice Commissioner, calls these figures a “catastrophe in anyone’s language”, pointing out in December 2014 that “we do better at keeping Aboriginal people in prison than in school”. He also noted that almost half of Australians in juvenile detention are Indigenous – so the trend does not look like reversing any time soon.

The Creative Spirits website summarises a number of inter-related factors for these high rates: stolen generations, disconnection from land, police behaviour, offence criminalisation, poverty and unemployment, language difficulties, foetal alcohol syndrome and poor housing. A significant number of Indigenous Australians are incarcerated for trivial offenses that rarely impact non-Indigenous people, including unpaid fines, unlicensed driving, not receiving court mail, not attending court and “disorderly conduct”. One common theme in these offenses is poverty: the poorer you are, the less likely you are to avoid jail for small offences.

These results are terrible in themselves, but three factors arise that underline their significance:

First, this increase in Indigenous imprisonment could have been avoided through a careful analysis of why, where and how Indigenous people are put in prison or into the juvenile justice system (where they now represent up to one-half of participants), and crafting appropriate responses.

Secondly, as the Productivity Commission report drily states (page 4.102), “Imprisonment has a heavy social and economic impact. High rates of imprisonment remove adults from their important roles caring for the next generation and can lead to the ‘normalisation’ of incarceration among community members.”

Thirdly – and most insidious of all – the high rate of imprisonment affects how we non-Indigenous Australians view Indigenous people. Although the comparison is not complete, rates of imprisonment of African-Americans in the USA run six times those of whites in that country. The result there means that, as Professor Heather Thompson (Temple University) points out, there is a “disproportionate policing” of young black men and women, and that in turn “sends a signal to the broader society that there is something inherently criminalistic about black people”. She calls the American rates of imprisonment a “mass incarceration” with unknown outcomes; surely the same applies to Indigenous Australians.

We can do better and improve Aboriginal and Torres Strait Islander rates of imprisonment. For the sake of creating an equal and just Australia, we must.

*****

Addendum:  In order to change the situation of mass incarceration of racial minorities, “we must change the narrative”.  So says, lawyer and social activist Bryan Stevenson, who gives a stirring 53 minute talk about American racial justice and imprisonment, which you can listen to on ABC Radio National’s Big Ideas program podcast (originally broadcast on 19th March 2015).  Stevenson points out that great literature helps to change the narrative of issues so that we can see them in new ways.  We need to “understand how the world is being sustained by things (narratives) that make us indifferent to inequality” and mass incarceration.  He points out that in the USA, this is “the function of 40 years of the politics of fear and anger.  When people are afraid and angry, they will tolerate abuse and violations of rights.”  Deep and insightful words that have a strong resonance here in Australia.

Stevenson’s book, Just Mercy: A Story of Justice and Redemption (published 2014), is also available here in Australia.

Martin Luther King’s frequently quoted statement that, “the arc of the moral universe is long, but it bends towards justice” (from his “God is marching on” speech) may give us some hope.  But complacency has no place in the lack of progress on incarceration of Indigenous Australians.  For, as King also said, ““We are now faced with the fact that tomorrow is today. We are confronted with the fierce urgency of now. In this unfolding conundrum of life and history, there ‘is’ such a thing as being too late. This is no time for apathy or complacency. This is a time for vigorous and positive action.”  (from his “Beyond Vietnam” speech)


Indigenous imprisonment in Australia

March 12, 2015

Aboriginal and Torres Strait Islander imprisonment rates have been steadily rising and are worse than any time in recent memory.  This is a national problem that demands a national solution.

I have just published an opinion piece on this topic in Open Forum, entitled “Indigenous imprisonment in Australia: a crisis of mass incarceration”.

I have also re-posted the full article on this blog, along with a short addition.

I encourage you to read it.