Andrew Leigh

AUSTRALIA'S UNEMPLOYMENT CRISIS

Crikey, 2 August 2019

In 1932, at the peak of the Great Depression, Australia’s unemployment rate hit 20 percent. Today, that’s about the unemployment rate in Fairfield, where around one in five people who want a job can’t find one.

When we hear about unemployment, the picture too often focuses on the national rate, currently 5.2 per cent. This hasn’t changed much over recent years, so it’s easy to miss the fact that other countries are doing much better. When she visited Australia, Jacinda Ardern was polite enough not to mention that New Zealand’s country’s unemployment rate is around 4 per cent. That’s also the rate in Britain and the United States. Countries that underperformed Australia during the Global Financial Crisis are now outperforming us – and by a significant margin.

But when we look across regions, it becomes clear that averages can conceal as much as they reveal. Fairfield’s unemployment rate may be the worst in NSW, but it isn’t the worst in Australia. In Victoria, unemployment in the Geelong suburb of Norlane is 22 per cent. In Queensland’s Logan Central and the Hobart suburb of Gagebrook, unemployment is 28 per cent. In South Australia’s Elizabeth and Western Australia’s Halls Creek, it’s 34 per cent. On Palm Island and the Torres Strait Islands, unemployment is 46 per cent.

This means that there are communities across Australia where more than a quarter of those who want work cannot find a job. That’s a national scandal.

After Australia came through the Global Financial Crisis without a recession, some conservatives bemoaned the fact that our economy had missed out on the cleansing fires of a ‘good’ recession. Under this way of thinking, severe downturns clear out the ‘dead wood’, and make way for new growth. It’s an approach that sees recessions as like bushfires – painful in the short-term; necessary in the long-term.

But it’s hard to share that view if you’ve spent time with people who struggle to find work – who find themselves on the margins of society, hoping for a job opening that fits their skills. The reason that many of us on the progressive side of politics are concerned about the red flashing lights right now is that we see the waste of human potential that comes with excess unemployment. Joblessness isn’t just another economic indicator: it’s a marker of how many people are missing out.

The analysis is on an SA2 level, and is smoothed over four quarters, ending with the March 2019 quarter (the latest available data). The ABS refers to SA2 areas as ‘communities’.

The cost of unemployment falls disproportionately on some of the most vulnerable Australians. Among those with a mental illness, unemployment is at 8 per cent. For those with profound disabilities, the jobless rate is 9 per cent.

For anyone who doesn’t speak English well, or didn’t finish year 10, the unemployment rate is 13 per cent. This means that for low-educated Australians, the labour market today is worse than it was for the average person at the height of the early-1990s recession.

For Indigenous Australians, the jobless rate is 21 per cent. Consequently, Aboriginal and Torres Strait Islander people face a job market that’s worse than the national job market was at the peak of the Great Depression, in 1932. Is it any wonder we’re struggling to Close the Gaps between Indigenous and non-Indigenous Australians?

Rather than patting themselves on the back, the Morrison Government should heed the alarm bells that are ringing about our underperforming job market. In 1945, Prime Minister Ben Chifley committed Australia to achieving full employment, and for a few decades, the nation succeeded. But today, the jobless rate is again too high – inflated by inadequate infrastructure investment, a flawed education system, excess monopoly power, and a lack of start-ups.

The cost of unemployment is never borne by the most advantaged citizens. Instead, the pain of joblessness is felt most acutely by communities in Fairfield, Norlane and Halls Creek, by people with worse health and fewer skills, and by Indigenous Australians. Unemployment is a social justice issue, exacerbating inequality and undermining the social compact. Unless everyone who wants work can find it, the economy isn’t working for everyone.

Andrew Leigh is the Shadow Assistant Minister for Treasury and the Federal Member for Fenner.

ENDS

Authorised by Noah Carroll ALP Canberra.