Work and claim JobSeeker – the radical plan that could help COVID unemployment

By Peter Lynch |

Making It

Work

Fancy fruit picking? How about driving a truck or loading one up? Or helping out at an early learning centre. All these jobs on offer in abundance – the problem is, there are few trackers.

According to LinkedIn, Graincorp is looking for 3,000 workers in general labouring, grain sampling, weighbridge operations and laboratory support.  They even offer all the training. Amazon is looking for 300 and Datacom is looking for 1,000.  The list goes on (See the full list below).

It’s the Australian economy’s most wanted: a way to keep the nation in paid employment. And Treasurer Josh Frydenberg’s budget next month will all be about jobs, jobs, jobs.

There will be infrastructure spending, of course. But creating roles with real businesses capable of coping in a COVID economy is not so easy. Especially since the most accessible jobs tend to be low skilled and low paid.

The August job figures from the Australian Bureau of Statistics today contained some surprisingly good news – unemployment from July to August fell 6.8 per cent, with the total number of unemployed people decreasing by 87,000

That’s good news. It was anticipated the numbers would be higher at 7.7 per cent.

AMP Capital’s Senior Economist Diana Mousina said the big driver big driver of the increase in employment was from those who are non-employees, or those who are self-employed. Mutual obligation requirements to qualify for unemployment benefits have been partly re-instated and probably resulted in an increase in these people coming back into the labour force as “employed”. Employment growth for employees was relatively unchanged on the prior month (in original terms).

“But, the headline unemployment rate is understating the level of weakness in the labour market. The truer measure of the unemployment rate is the “effective” unemployment rate which accounts those who have been discouraged from looking for work and left the labour force (we use an unchanged participation rate from March to account for this) and those who are working zero hours (which has fallen a lot but increased again in August to the lockdown in Victoria). On our estimates, the effective unemployment rate was at 9.5% in August. This is lower than last month’s 10% and well below the April high of 14.9% but is much higher than the headline unemployment rate,” she said.

“Strength in non-Victorian states is clearing offsetting the weakness in Victoria. Victorian jobs fell by 42,400 people and the unemployment rate increased to 7.1% from 6.8% last month and hours worked fell by 4.8% in Victoria while in Australia hours worked rose by 1.8% in August. Full-time jobs rose by 36,200 and part-time jobs increased by 74,800. While around 76% of part-time jobs lost due to COVID-19 have been regained, only around 15% of lost full-time jobs due to the pandemic have been recovered which means that there is some risk that initial temporary job losses are becoming more permanent. There is still plenty of spare  capacity in the labour market. Hours worked rose by 0.1% in August but are still down by 5.1% over the year. The labour market underutilisation rate (unemployed plus underemployed) remains high at 18%, after peaking at 20.2% in May.”

But we’re not out of the woods yet, with the Treasury and the Reserve Bank anticipate 10 per cent top by the end of the year.

The concern now is what happens as pandemic relief – JobKeeper and JobSeeker – are wound back, and small businesses find their bank loans are called in.

Deloitte Access Economics says cutting the $550-a-fortnight coronavirus supplement will “harm the economic recovery and decrease both GDP and employment across Australia.”

Cuts expected in two weeks time at the end of September will slash the size of the economy by $31.3bn and see another 145,000 full-time jobs go over two years, the firm says in a new report.

Deloitte estimates the number of people receiving the supplement would peak in December at 2.34 million when the jobless rate hits 10%, falling to 1.73 million recipients by June 2022. While the boosted payments would not stop people taking up work, the firm said reducing income support would cost jobs through a shock to household consumption.

An interim report from the parliamentary inquiry into the Working Holiday Maker program recommended that for the next 12 months, Australians on JobSeeker should be able to retain the payments while taking on low paid agricultural and horticultural work, with the Government also providing a one-off payment to help workers relocating for these jobs with travel and accommodation costs.

The number of people on the Working Holiday Maker visa has fallen from 140,000 to 73,500 since Australia closed its borders in March, raising challenges for the agriculture sector which relies on backpackers to harvest crops.

Currently, Australians receiving unemployment benefits see those payments taper off if they earn over $254 in two weeks. You payments will decrease by 50 cents for every dollar you receive over the threshold.

In its submission, the Australian Fresh Produce Alliance said the continuation of JobKeeper and JobSeeker acts as a “really practical challenge”, questioning why Australians would move to another location to work on a farm if they lose money.

“While farm wages are as good as any other sector—ABS data indicates that as much as $1,000 a week can be earned in entry-level positions—displaced workers with established careers in other fields may find entry-level salaries unattractive,” the National Farmers Federation maintains.

The government has yet to make a comment on the suggestion, but is open to radical plans that cover the current crisis.

The Acoss chief executive, Cassandra Goldie, called on the government to “extend the existing coronavirus supplement to prevent income cuts in two weeks” before legislating a permanent increase.

There were 12 people receiving the jobseeker payment for every job vacancy, while the ratio was 28 people for every position in the regions, Ms Goldie said.

The supplement, which is set to expire in December, currently tops up income support for about 2.3 million people, including those on jobseeker, student and parenting payments.

While the government has hinted it may extend the supplement, it is yet to commit to a permanent increase to the jobseeker payment, meaning it would revert to $565 a fortnight when the supplement expires.

Here’s where LinkedIn says the jobs are:

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