
Issue No 81		08 December 2000

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Economics

In the Same Boat

In an unprecedented move, a coalition of industry, community and trade union groups have joined forces to address long-trerm unemployment.

Their joint statement, "Pathways to work: preventing and reducing long-term unemployment" is a collaborative effort which began with discussions held in June this year, hosted by the Business Council of Australia. The "Pathways Statement" is released today (Wednesday 6 December) to coincide with letters to the Prime Minister, Leader of the Opposition and every member of Parliament seeking their support.

The Coalition consists of the Australian Council of Social Service (ACOSS); the Australian Council of Trade Unions (ACTU); the Boston Consulting Group (BCG); the Business Council of Australia (BCA); the Committee for the Economic Development of Australia (CEDA); the Dusseldorp Skills Forum (DSF); Jobs Australia (JA Ltd); and the Youth Research Centre, University of Melbourne.

The "Pathways Statement" argues that economic growth of itself has not and will not deliver the conditions necessary for tackling long-term unemployment. Although this period of growth in our economy has brought with it significant reductions in overall unemployment, unemployment benefit statistics reveal a worrying trend that the number of people receiving unemployment benefits for more than 12 months has barely fallen over the past five years, and stood at 385,000 in September 2000.

The "Pathways Statement" identifies the need for action in three key areas, including:

1. Ensuring a successful transition from education to employment. All young people should have access to education, training and employment opportunities delivering Year 12 completion or its equivalent, as a minimum expectation for making a successful transition from school.

2. Ensuring a successful transition from retrenchment to re-employment. Employers, unions, Government, and employment assistance and training providers, should work together at the local and regional level to assist workers facing retrenchment who are at high risk of long-term unemployment.

3. Reducing long-term unemployment. To achieve this the Government should, as part of its response to the McClure Report on Welfare Reform, substantially boost its investment in employment and training assistance so that all long-term unemployed people are offered substantial help (such as paid employment experience and relevant education and training) to overcome barriers to employment, through Intensive Employment Assistance within the Job Network.

The organisations involved in the Coalition, committing themselves to continuing collaboration, will be jointly seeking meetings with the Prime Minister, other key ministers and the Opposition as soon as practicable.

� David Buckingham, Executive Director BCA (c/- John Hine: 0418 332 272)

� Sharan Burrow, President ACTU (c/- George Wright: 0419 556 616)

� Michael Raper, President ACOSS (c/- Ian Wilson 0419 626 155)

� John Nieuwenhuysen, Chief Executive CEDA (c/- Margaret Meade 03-9662 3544)

� David Thompson, CEO JA Ltd: 0419 527 753

� Eric Sidoti, Senior Consultant DSF: 0418 965 450

� Johanna Wynn, Director Youth Research Centre: 03-8344 9633

Executive Summary

PATHWAYS TO WORK:

Preventing and Reducing Long-term Unemployment

Australia is enjoying a sustained period of prosperity and affluence. Most of the country's economic fundamentals are positive: low inflation, consistent economic growth, strong export growth, high labour productivity, sustainable fiscal policy and solid returns for investors.

This period of growth in our economy has brought with it significant reductions in unemployment. The figures, in terms of the standard ABS measures, attest to the positive effect of economic growth. Even so, the number of long-term unemployed people remains unacceptably high, with 152,000 people unemployed long-term in September 2000. Despite the buoyant economy, long-term unemployment only began to fall in 1998 (after remaining stuck between some 200,000 and 250,000 people for the three previous years).

Moreover, the ABS measure of long-term unemployment conceals much higher levels of long-term joblessness because people whose period of unemployment is interrupted for a short time by casual work, training, or illness are no longer regarded as long-term unemployed. Unemployment benefit statistics, which include these people, reveal a much more worrying trend: the number of people receiving unemployment benefits for over 12 months has barely fallen over the past five years, and stood at 385,000 in September 2000.

Long-term unemployment always rises quickly after a recession, but declines very slowly through economic recoveries. This is not surprising, because the longer people remain out of work, the greater is their loss of confidence and skills and the lesser their attractiveness to employers. Economic growth of itself has not and will not deliver the conditions necessary for tackling long-term unemployment.

There are strong social and economic reasons to take determined action to reduce long-term unemployment. It is heavily concentrated. It cuts a broader swath among older workers and those who leave school early. It strikes economically disadvantaged regions such as the Mersey-Lyell region of Tasmania (where almost 30% of the unemployed have been out of work for more than two years) much harder than others.

Moreover, if we fail to reduce long-term unemployment while the economic opportunity is there to do so, Australia will be confronted with higher levels of unemployment, and the associated social problems and loss of production and labour market efficiency, after the next economic down-turn.

Australia's impressive economic performance has provided us with an opportunity not just to get the economic fundamentals right, but a unique chance to get the social fundamentals in order as well.

Having come together to consider these issues our organizations are agreed on the need for a strategy that simultaneously tackles the prevention and reduction of long-term unemployment.

To this end, we are proposing three priority areas for policy development, financial commitment, and action. In the context of welfare reform, high priority should be given now to action to reduce existing levels of long-term unemployment. At the same time, resources should be devoted to strategies to prevent people from falling into this condition in the first place.

1. Ensuring a successful transition from education to employment

� All young people should have access to education, training and employment opportunities delivering Year 12 completion or its equivalent, as a minimum expectation for making a successful transition from school.

This requires particular support for early school leavers or those facing other disadvantages. It should be recognized that early school leavers, who in effect forgo Government financed school education, are entitled to Government support in accessing alternative options.

� Community Partnerships should be developed and strengthened at the regional level between industry, schools, health and Job Network services, and other non-government agencies (such as organisations involved in the Jobs Pathway program), to identify those who have left school early or are at risk of doing so, and to support them in securing employment or further education and training.

� Governments at all levels - Commonwealth, State and local - should cooperate to provide the necessary political and financial support.

� The success rate of school-to-work transition should be measured to focus attention on outcomes and ensure that feedback is collected on the success or otherwise of public initiatives.

An agreed mechanism is required to ensure an identified body is accountable at the local level for increasing the participation in work, training or education of school leavers in their region.

2. Ensuring a successful transition from retrenchment to re-employment

� Timely and early intervention is critical for those facing termination of employment and who are at high risk of long-term unemployment.

Businesses should be able, at little additional costs to themselves, to assist their high-risk employees in the termination-back-to-work transition.

� Employers, unions, and employment assistance and training providers, should work together at the local and regional level to develop employment assistance packages for workers facing retrenchment who are at high risk of long-term unemployment.

� The Government should support these efforts through a new employment assistance scheme targeting this group of retrenched workers, or through some refinement of existing programs.

� Appropriate instruments should be developed to identify employees facing heightened risks.

3. Reducing long-term unemployment

� All long-term unemployed people should be offered substantial help (such as paid employment experience and relevant education and training) to overcome barriers to employment, through Intensive Employment Assistance within the Job Network.

� A package of employment and training assistance to meet each long-term unemployed person's individual needs should be negotiated between each job-seeker and a personal employment adviser within his or her Job Network provider. In return, it is reasonable to expect those offered such assistance to participate fully in employment and training schemes that are likely to improve their job prospects.

� As part of its response to the report of the Reference group on welfare reform, the Government should substantially boost its investment in employment and training assistance for those Australians who have been unemployed long-term, so that it can implement these proposed commitments to long-term unemployed people.

� Employers, governments and unions should work together with community organisations at the industry, enterprise and regional level to open up additional job and employment experience opportunities for long-term unemployed people.

We shall jointly be seeking meetings with the Prime Minister, other key ministers and the Opposition as soon as practicable to discuss an improved national response to long-term unemployment, including the proposals outlined above.

We are also committed to continuing our collaboration on this issue. In particular we have agreed to a convene by March 2001 a small number of Task Forces drawing on our own constituencies to focus on practical ways of tackling long-term unemployment in selected areas of high need.

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Issue 81 contents

Interview: Back to Work
After a stretch of unemployment following the 1996 election, former Keating Minister Robert Tickner is now helping others find work.

Media: Reality Check
Aiden White, head of the international journalists' union, argues that online journalism presents a new set of challenges for organising.

Economics: In the Same Boat
In an unprecedented move, a coalition of industry, community and trade union groups have joined forces to address long-trerm unemployment.

International: Nepalese Hotel Workers Ask for Support
Hotel workers in the small Himalayan nation of Nepal have finally decided to vent their anger and call a general strike for Monday - over a 21 year old dispute.

Unions: Speaking in Tongues
Labor Council's Mark Morey outlines the successful campaign by local government workers for a community language allowance.

History: Fighting Words
The anti-conscription campaign of 1914-18 tore the ALP apart; but this was not the first time the labour movement took a militantly anti-war stance.

Politics: A New Socialism
In an extract from his new book, political economist Frank Stilwell argues the need for a new radicalism to counter the Third Way

Satire: Roy Slaven on the Rampage
John Doyle's history of the ABC stretches back to a 1958 evening in Lithgow on which he was "scared shitless" by Blackboard on Mr Squiggle.

Review: Mauled in the Bear Pit
Vengeance may be sweet but it is always made better when you are able to write a book about yourself that also provides the opportunity to dump a bucket load on those who undertook your removal.

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