HR News Articles

There's serious talk about a "job guarantee", but it's not that straightforward


Shutterstock


Peter Davidson, UNSW

Suddenly, the idea of a “job guarantee” is back in vogue.


Lawyer, academic, land rights activist and founder of the Cape York Institute Noel Pearson has come out of it favour of it, University of Newcastle labour market specialist Bill Mitchell has a document before the prime minister, and the Per Capita think tank is pushing for a youth-only guarantee.


The idea is that the government would make an unconditional job offer at a minimum wage to anyone willing and able to work. There would be no need for the Newstart unemployment benefit (now called JobSeeker).




Read more: Forget JobSeeker. In our post-COVID economy, Australia needs a 'liveable income guarantee' instead




The buffer of jobs on offer would “normally be small and would shrink as private sector activity recovers”.


It is not widely known that it’s been tried before, by the Keating government in 1994. The scheme was limited to the long-term unemployed, making it more manageable than a scheme that offered employment to everyone who was unemployed.


Working Nation


The centrepiece of Working Nation, unveiled by Prime Minister Paul Keating in February 1994, the so-called “Job Compact” guaranteed subsidised employment for six to 12 months to everyone who had been unemployed for more than 18 months.


This article draws on my research into what happened, including interviews with senior government officials from that time.


By late 1993 300,000 people had been reliant on unemployment payments for more than 12 months.


The idea was that paid work experience in regular jobs would improve their chances of securing unsubsidised jobs by renewing their confidence and skills, and instilling confidence in employers about their ability to work.



We started off wanting to guarantee the long-term unemployed a job. We thought that’s what this agenda was all about (official, department of prime minister and cabinet)



The original plan was for most of the job placements (70%) to be offered through a private sector wage subsidy scheme, Jobstart, which had a good record for placing people in ongoing jobs.



Even with payment, employers weren’t keen to take on subsidised applicants.


The other jobs would be provided through the New Work Opportunities program (which offered community organisations a 100% wage subsidy to employ people fulltime for six months) and Jobskills (which offered a combination of part time paid employment and training run by community organisations).


When fewer private employers than expected took on Jobstart wage subsidies (134,000 in 1995) the job guarantee could only be fulfilled by expanding public and community sector jobs (to 123,000 positions).


As has been the case in other overseas public sector job creation schemes, these jobs often turned out to be very different to mainstream jobs, reducing transitions to unsubsidised jobs.


And as the number of subsidised jobs ballooned, their quality declined. And instead of case managers matching jobs and experience to needs, the process became a conveyor belt.



There was some dissatisfaction even within the department of prime minister and cabinet about how it was going. It appeared to be going the [old] way of not treating people as individuals, just putting people into any program that was coming along (official, department of prime minister and cabinet)



And the language of the program became increasingly punitive.



You often start with a great idea and later it gets modified. Focus groups showed the public were really down on the unemployed and sole parents. That got reflected back in the ‘reciprocal obligation’ language, which was not how we originally had it (official, department of prime minister and cabinet)



Only one third of the participants were in unsubsidised jobs three months after the subsidies ended. The official evaluation of the “net impact” of the program (the extent to which it increased the probability of employment) was a 28% improvement from Jobstart, 11% for Jobskills and 4% for New Work Opportunities.


‘High cost, low outcomes’


The Job Compact was expected to reduce the number of people on unemployment benefits for more than 18 months by 50% in its first year, but the actual decline was less than 20%.


The official evaluation pointed to its “high cost and low outcomes”, and concluded it was “not the most appropriate strategy for assisting the long-term unemployed”.


It said subsidised public sector jobs should be created only to help “the most disadvantaged clients who may not meet the job readiness requirements of many private employers”.




Read more: When the Coronavirus Supplement stops, JobSeeker needs to increase by $185 a week




Right now, 700,000 people have been on unemployment benefits for more than a year, making the case for some sort of large-scale investment in paid work experience and training strong.


Subsidised jobs can help reduce long-term unemployment, as shown by the success of the Future Jobs Fund in the Britain and small-scale wage subsidy schemes in Australia.


Britain’s Conservative Government has just announced plans to generate 350,000 subsidised community jobs for unemployed young people.


But Australia’s experience with the Job Compact shows guarantees are no panacea.


Subsidised jobs help, but they’re no panacea


When subsidised jobs schemes are scaled up to offer jobs to everyone who is unemployed, their costs increase and their quality and their impact on future employability diminish.


We will need large-scale programs to create jobs, and we should offer the 700,000 people who are already long-term unemployed all the help they need to secure them.


But that needn’t always mean subsidised jobs. Many who are unemployed will benefit from training, others from their employment service provider partnering with an employer to skill them up.


Higher unemployment is a price we’ve paid to control the virus. It will take a mix of measures to ensure that cost is only temporary.The Conversation


Peter Davidson, Adjunct Senior Lecturer, UNSW


This article is republished from The Conversation under a Creative Commons license. Read the original article.

Jobs Just For You, The HR Professional

Our weekly or daily email bulletins are guaranteed to contain only fresh employment opportunities


More info

Latest Jobs

WHS & Wellbeing Advisor - Part Time
New South Wales

Remuneration & Benefits Consultant
Victoria

EL1 HR Business Partner - Contract
Australian Capital Territory

HR Change Lead (6 months+) - Contract
New South Wales

Senior People Advisor | Permanent
Victoria

HR & HSEQ Officer - Contract
Queensland

HR Coordinator - Contract
New South Wales

Recruitment Officer - Contract
Queensland

Recruitment Advisor - Part Time
Victoria

Internal Recruiter
Queensland

Blue Collar Recruiter - Contract
Western Australia

Change Design Manager - Contract
Queensland

HR Operations Manager
New South Wales

HR Operations Manager
New South Wales

Head of Talent Acquisition
New South Wales

Payroll Team Leader
New South Wales

Remuneration & Benefits Specialist
New South Wales

L&D Advisor
New South Wales

Streamline Sourcing Officer - Contract
Victoria

ER/IR Advisor - Contract
Western Australia

HR Operations Manager (12 MONTH FTC) - Contract
New South Wales

Human Resources Business Partner
New South Wales

Recruitment Advisor
Western Australia

Senior HR Advisor
Western Australia

Workplace Health Safety Officer - Contract
Victoria

ER Advisor - Contract
Western Australia

Injury Management Advisor - Contract
New South Wales

Talent Acquisition Specialist
Western Australia

HR Business Partner (Change Management) - Contract
Western Australia

HR Consultant - Contract
South Australia

APS 6 / EL1 Rehabilitation Case Management - Contract
Australian Capital Territory

HR Advisor - Employee Relations - Contract
Victoria

HR Business Partner
New South Wales

HR Generalist - 3 months Contract
Western Australia

Director People and Culture Business Parnering
Victoria

HR System Coordinator
Victoria

Senior Safety Advisor
New South Wales

EL1 People and Wellbeing Manager - Contract
Australian Capital Territory

Workforce Planning Lead - Contract
Victoria

Senior Advisor - Training & Assessing - Contract
Western Australia

Injury Management Advisor - Contract
New South Wales

HR Advisor - Contract FT or PT
Victoria

Workforce Planning Lead - Contract
Victoria

HR Advisor
Western Australia

Employee Relations Advisor - Contract
Western Australia

HR Manager - Contract
Western Australia

Recruitment Advisor - Contract
Western Australia

Training Delivery Manager
New South Wales

HR Manager - Contract
New South Wales

HR Consultant - Contract
Victoria

HR Manager
South Australia

L&D Specialist
Western Australia

Talent Acquisition Advisor - Contract
Australian Capital Territory

Human Resources Manager - Part Time (0.4 FTE)
Victoria

APS6 HR Officer - Contract
Australian Capital Territory

EL1 Assistant Director Workforce Planning & Development - Contract
Australian Capital Territory

HR Manager
Victoria

Head of HR, Global
New South Wales

Recruitment Advisor - Internal
Victoria

Workforce Management / HR Analyst (12m FTC) - Contract
New South Wales

APS5 L&D Officer - Contract
Australian Capital Territory

HR Business Partner
Western Australia

Senior People Partner – Permanent
Victoria

Human Resources Manager
New South Wales

Internal Recruitment Specialists - multiple vacancies - Contract
Queensland

Workforce Planner
Western Australia

Learning Experience Designer - Contract
Victoria

Training Lead
South Australia

HR Manager - Contract
New South Wales

HR Manager
New South Wales

Recruitment Coordinator - Internal
South Australia

Director People & Culture
South Australia

Employee Relations Advisor - Contract
Queensland

Senior HR Advisor - Contract
Queensland

Talent Acquisition Advisor
Queensland

HR Coordinator
New South Wales

HR Administrator
New South Wales

Recruitment Coordinator - Contract
Queensland

HR Manager
New South Wales

HR Business Partner - Contract
New South Wales

Browse All Jobs