Labor force figures show need for better income support - ACOSS

TODAY'S unemployment figures mask the true impact of COVID lockdowns on jobs, and an urgent boost to income support is needed to help people survive the downturn while the economy recovers, the Australian Council of Social Service (ACOSS) warned.

While the headline national unemployment figure fell to 4.5 percent, total employment fell by 146,300 jobs, vastly more than had been predicted. This means that some people have simply given up looking for work because of the economic conditions, ACOSS said in a statement.

This true impact of COVID  is reflected in the data for NSW and Victoria. Both states have weathered the lion’s share of lockdowns and are where underemployment and withdrawal from the labour market indicate how difficult it is going to be to get everyone back into jobs after the lockdowns.

The rate of underemployment is evident in the hours worked data for both NSW and Victoria where – since the lockdowns first hit back in July – a total of 102 million hours of paid work have been lost since May.

In NSW the underemployment rate increased to 10.2 percent and 9.3 percent in Victoria. But ACOSS CEO, Cassandra Goldie said the underutilisation rate told the whole story because it showed how many people "want more work than they have". In NSW this increased to 15.1 percent and 13.2 percent in Victoria, with Queensland coming in 13.9 percent.

Dr Goldie said more action was needed to prevent long term unemployment and underemployment.

“The increased rate of underemployment should be a flashing siren for decision makers in government,” Dr Goldie said. “It reflects the fact that many businesses are in hibernation and propped up by disaster payments. 

“We need to be clear-eyed about this and begin confronting the likelihood of growing long term unemployment. We desperately need more robust income support.

“There are at least 755,000 people still in lockdown on income support who have missed out on disaster payments. For this group it has been much harder to survive a brutal recession without fear of losing their homes and compromising their health and welfare.

"As our own report Locked out in Lockdown has shown this has caused enormous psychological distress. The government could have avoided so much trauma if it had just extended the disaster payment to everyone who is looking for paid work.

“Australia needs to redesign its employment services and income support to help people overcome by investing in more strategies to create jobs for those who will be left behind as the labour market begins to recover. We need  to increase income support payments so that people looking for paid work can meet their basic costs, look after their health and improve their training and education.

‘’Under-investment in employment assistance such as quality vocational training and wage subsidies, is one of the main reasons that over 800,000 people have been languishing on unemployment payments for a year or more.

‘’Just yesterday, the OECD warned that Australia does not invest enough in training for people who are unemployed. Australian government spending on employment assistance is less than half the average OECD level, as a proportion of GDP. We can and must do better.”

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