The official unemployment figure for February is due out later this week. Unemployment in Australia is 5.1 per cent, which is significantly lower than that of most Western economies. If the February figure remains around 5 per cent it will be welcomed by the Gillard government and its supporters.
Fair enough. Labor is justified for claiming some credit for Australia not going into recession after the global financial crisis, which wreaked havoc in much of the northern hemisphere. Sure, the then prime minister, Kevin Rudd, and his deputy, Julia Gillard, inherited a very strong economy courtesy of the legacy of the Coalition government led by John Howard and his treasurer, Peter Costello. Yet without question Labor’s fiscal expansion helped to sustain employment.
However, if the Gillard government is willing to accept praise for low unemployment among the general population, then it should be prepared to accept some responsibility for Australia’s high long-term unemployment figure.
The Australian Bureau of Statistics recently published a report titled Labour Markets and Related Payments. It revealed that in January this year 349,806 Australians were long-term recipients of the Newstart allowance, meaning they have been on unemployment benefits for a year or more. In January 2009 the relevant figure was 258,403. That is an increase of about 90,000, or more than 33 per cent, in two years. The figure for long-term unemployment is increasing despite the general level of unemployment dropping over the past year.
The point about the long-term unemployed is that virtually no one wants to discuss them. The Prime Minister, Julia Gillard, delivered a major address to the Committee for Economic Development of Australia in February in which she discussed unemployment, labour shortages, underemployment, part-time employment and those on the disability support pension but refrained from specifically mentioning the long-term unemployed.
Last October Ged Kearney, the ACTU president, addressed the National Press Club without focusing on unemployment at all.
It is much the same with the other members of the industrial relations club, which appears to have been revived since the passing of Labor’s Fair Work Act.
When I worked in the department of industrial relations in the early 1980s, it was evident that those in the system – governments, trade unions, employer organisations, public servants, academics and journalists – thought little about the unemployed. It was not that they lacked empathy towards those out of work. It was just that they focused on those already in the system.
If general unemployment had increased by more than a third in just two years, this would be an occasion for considerable comment. But when such a rise is restricted to the long-term unemployed there is little, if any discussion.
Why? The reason seems to be that no one wants to address the issue. Not Labor, which introduced the Fair Work Act. Not the Coalition in opposition, which was politically burnt by the unpopularity of Howard’s Work Choices legislation. Not the Greens, who are primarily focused on the inner-city educated class which has no trouble finding work.
Not government-appointed tribunals such as Fair Work Australia and the Fair Work Ombudsman, whose officials are employed to preside over the regulated system. Not the trade unions, which are focused on union members who pay dues and potential members already in the workforce. And not academics and journalists who, with some notable exceptions, are essentially cheerleaders for the regulated system.
The explanation for the silence turns on the fact that the Fair Work Act has disadvantaged the long-term unemployed. This is partly due to decisions by Fair Work Australia to increase hourly rates in the hospitality industry at weekends, thus discouraging small businesses from operating in the seven-day economy. More seriously, the restoration of the unfair dismissal legislation with respect to small businesses is a real job killer for the young and the poorly educated.
If you are running a small business in the suburbs or regional areas you are more likely to give a young, uneducated person a job if you can subsequently dismiss the employee if they perform poorly. You are less likely to take a risk in employing someone if, following poor performance, the employee in question alleges unfair dismissal and starts a legal action before an industrial tribunal.
If unsuccessful, the employer faces a compensation payout or possible restitution of employment. Even if successful, the employer has been required to either engage expensive legal representation or take off time for a tribunal appearance or, perhaps, both.
The Howard government’s Work Choices legislation was criticised by trade union officials, industrial relation academics and more besides. But Work Choices did lead to the growth of permanent employment – particularly among the young, the old and females seeking permanent part-time work.
The educated, of whatever age, will usually get work in a growing economy. Labor’s re-regulation of the industrial relations system has bit hardest at the poorly educated young. This has led to dreadful levels of youth unemployment in the outer suburbs of most cities and in some regional centres.
Next Friday Australians have a right to feel proud about our relatively low unemployment level. But there is scant justification for the continuing silence about the long-term unemployed.