Budget 2020: the people most likely to be left behind
Before the pandemic, some stark local disparities in the Australian economy were obscured by a rosy national picture.
Unemployment nationally was 5.2% in March, but it was 39% in Elizabeth, north of Adelaide, and 28% at Logan, south of Brisbane, while nearly one in five were out of work in the western Sydney suburb of Fairfield.
The federal government heralded statistics showing welfare rates at a record low, yet people were also spending longer on benefits.
Now some economists estimate the current jobless rate of 6.8% could hit 8% next year, and may not dip back to 6.8% until 2022-23.
And without close attention – or what one expert called “reordering the queue” – certain groups face a greater prospect of being left behind. Here are some of those likely to face the worst long-term consequences of the economic conditions ushered in by the pandemic.
The young do it tough in recessions
Research shows young people bear the brunt of recessions: they’re often the first fired and the last hired.
“They’ve been in and out of income support, short-term jobs, part-time jobs, or had insufficient hours to sustain their livelihoods,” says Conny Lenneberg, the executive director of the Brotherhood of St Laurence.
After the global financial crisis, youth employment still hovered “at stubbornly high levels”. In this downturn, young people have been most likely to lose work.
After leaving high school and home early, Dariane Simmons, 19, has worked in retail while studying community services at Tafe. “I left [Tafe] because I didn’t really like it,” she says. “And then the coronavirus happened.”
For young people like Simmons, experts say what happens next is high stakes: a prolonged period out of the workforce is a reliable predictor of significantly reduced future earnings.
Some jobseekers with disabilities may face years of poverty
The number of people with disabilities on jobseeker payment rose from 25% in 2014 to 41% – or 325,000 – in March.
As Peter Davidson, principal adviser for the Australian Council of Social Services, puts it: “They were already at the end of the queue, but the queue has become a great deal longer.”
These jobseekers often have a mix of conditions, including psychosocial disabilities that don’t allow them to meet the tight requirements of the disability pension.
Unless the government permanently increases the jobseeker payment, many like Aeryn Brown, 36, face life on a base rate of payments of $40 a day when the coronavirus supplement runs out.
Guardian Australia spoke with Brown last year about life on unemployment payments. She lives with anxiety and depression and Centrelink acknowledges she can’t work longer than 25 hours a week.
“I’ve been moved on Centrelink and off since 2008,” she says. “That’s 12 years. For six years I was on Austudy … I’ve only found two jobs in all that time.
“It’s frustrating because I want to work – I want to get out of the house and put my bachelor’s degree to good use.”
There are older people who may never work again
The fastest growing group on the jobseeker payment pre-Covid was women over 45.
Though the pandemic has hit the young the hardest, an extra 100,000 people aged over 55 – and 310,000 in total – were getting the dole in June compared to March.
“The big problem for old people is if they do get laid off, their probability of getting into work is much lower,” says Jeff Borland, a professor of economics at the University of Melbourne.
“Part of that is the skills older workers have had and areas they’ve worked in were not really expanding. It was a bigger problem than just the economy.”
But another issue is hiring discrimination. Research suggests some employers write off older workers as not equipped for the modern workforce, as overqualified, or, in the case of older women overrepresented in industries such as retail and tourism, they become “invisible”.
“As women get older, there’s a real sense that if you’re not pretty, you’re not presentable,” Lenneberg says, citing the Brotherhood’s own research. “They’re invisible – people just don’t see them, they don’t want to see them.”
After the GFC in 2012, parliamentary researchers noted a growing group of older women were going straight from the dole to the age pension. The problem is worse now, according to a Parliament Budget Office paper released this week.
Disadvantaged areas were already behind the eight ball
The federal government’s unemployment target of “comfortably below 6%” will likely still leave many behind.
That includes the unemployed in regional and remote areas, particularly places with high Indigenous populations, and former manufacturing hubs in the outer suburbs of the capital cities.
“Many [people] become unemployed long-term because they are just living in places where there’s not enough jobs,” Davidson says. “They have family and other connections and supports there, so moving is not a realistic option. Due to that gap in the résumé, employers won’t consider them.”
Simmons lives in Frankston North, in Melbourne’s south-east. “I personally think Frankston is beautiful,” she says. “People think it’s a bad place, but that’s just stereotyping.”
Simmons has been on youth allowance – the jobseeker payment for those under 22 – for three years. She is close to her family but has been living out of home since 14. She left high school at year 10 for Tafe – “I didn’t really like school that much” – and worked at Target and then the stationary retailer
Smiggle.
She expresses regret at leaving that job in March, just before the pandemic hit. “I felt like I’d let myself down a bit – it’s just a lesson, I guess.”
Simmons doesn’t feel inhibited by a lack of local opportunities, but the data suggests she’s up against it. In March, 10% of people in Frankston North were already receiving welfare benefits; on the other side of the highway in Frankston South, it was 2%.
There are risks the recovery will not be evenly paced. “Normally what we see … is a more rapid recovery in the areas that traditionally have low unemployment – for example, the inner cities,” Davidson says. “But it all depends on the course of the pandemic.” What can we do?
Aside from job creation – in public infrastructure such as social housing, clean energy and the care industries – there also needs to be a focus on “reordering the queue”, Davidson says.
“You need the programs that connect people who would otherwise be left behind with those jobs,” he says.
That means wage subsidies, boosted training and local jobs-matching programs. It might look something like what has happened to Simmons.
During the pandemic, she was referred to the Brotherhood of St Laurence’s Transitions to Work program, a voluntary scheme for young people at risk of long-term unemployment. It’s said to swap the churn and often punitive nature of the jobactive scheme for personalised mentoring.
The Coalition has shown it some support, but most people are still sent to jobactive. “That really did not help – you had to sit there for two hours a day and just apply for jobs,” Simmons recalls.
Through online coaching sessions, due to the pandemic, Simmons expressed interest in real estate – “It’s professional, it will get you somewhere” – and her jobs coach set up a meeting with a local agent.
That led to a job interview, though Simmons had a practice run with her jobs coach first. She starts next month.