'Solving' unemployment: an analysis of two Australian policy initiatives.

Caddy, Ian ; Mortimer, Dennis

INTRODUCTION

This paper will consider the two of the three major policy initiatives aimed at addressing unemployment in Australia. The first of these three initiatives is that unemployment is predominantly an economic problem. From this policy perspective, if you practice good economic management which predominantly means that the Federal government adopts good fiscal policy (code for producing on-going budget surpluses), then as the economy grows so will the demand for new employees grow and so unemployment will decline. The second policy treats unemployment as more of a 'frictional' problem than a 'structural' problem. People will become unemployed over time as organisations adjust (often code for replacing people with capital, or 'downsizing'). What then needs to happen is to train or re-train these unemployed people so that they can get the jobs that are now available. Finally, there is a need to recognise that unemployed people in themselves often need to be motivated to find their first job or to find another job. That is, there is a need to reform (which is often code to tighten or remove) any welfare payments that the government makes to unemployed people. As unemployed people now get less in terms of a government 'handout' they will begin to lift their effort in terms of getting themselves back in the workforce (Andersen, 2010; Battaglini and Coate, 2011; Roger and Zamora, 2011).

Furthermore, when the approaches of the current Australian Labor government are compared with that of its Liberal National Party opposition, there is a considerable amount of agreement in terms of unemployment policy. There are differences in other areas of labour market regulation (such as the use of individual work contracts versus enterprise bargaining), and some window dressing by the conservative Liberal National Party opposition, e.g. how much influence unions have within the Labor party; but from a broader perspective there is more agreement than difference. For example, when the current Labor government came to power there was little thought given to undoing the creation of the Job Network to address the issues of the unemployed completed under the previous conservative (Liberal National Party) government.

However, this paper questions this approach and considers that unemployment and the solution or the solutions to unemployment cannot be resolved by a pursuit or policies originating some such simple positions. The underlying problems of unemployment and the solutions that must be developed is far more complex, similar to that of a number of other current issues such as climate change, than what our present politicians would lead us to believe. Maybe it is a case that our current politicians should be considered as simpletons rather than complexitons; maybe they should be seen as part of the problem rather than being seen as problem solvers.

SOLVING UNEMPLOYMENT--IT'S ECONOMIC?

Please accept our apologies for paraphrasing that famous song sung by Alanis Morrissette. As the heading of this section indicates, this view is about growing the economy and with this growth come more jobs. More and yet more jobs means that employers will at some point have to look at employing more and more people and so begin to re-employ the unemployed. As more opportunities for the unemployed become available it will become easier for them to get back into the workforce, and so the level of unemployment (both numerically overall and as a percentage of those currently in work) will go down. These underlying premises are encapsulated in the responses provided by the current Prime Minister Julia Gillard in her previous role of deputy prime minister and minister for education, employment and workplace relations (Dalley, 2008) in the interview transcript shown below:

Helen Dalley: If we can turn to jobs and the [2008] budget this week--all eyes are on that. Now the Treasurer told journalists on Friday that the coming slowdown of the economy due to the global slowdown would cause unemployment to rise. Now do you agree? Is unemployment going to rise?

Julia Gillard: The Treasurer has been consistently making the point that there are countervailing forces in our economy at the moment. Of course we've seen a global slowdown, the sub-prime crisis in the United States, the global credit crunch that has flowed from that and that is having an impact on Australia. At the same time of course we've seen record terms of trade and that means that there is going to be money flowing in, particularly in the minerals and resources sector. And in those states that are very rich in minerals and resources. So there are countervailing factors. What we know is that we've got to fight inflation. The budget is destined to do that. The Treasurer has made it very clear that this is a budget that will deliver to working families; it will deliver on our promises but it will be about fighting inflation. And of course when it comes to industrial relations our policies and plans are to ensure that productivity is increased and wage rises are all about productivity. Once again that is important to fight inflation.

Helen Dalley: Alright, but if you're fighting inflation and cutting spending the economy will slow and jobs growth will slow; unemployment will rise.

Julia Gillard: Well what we're hoping of course is to get the economic settings right. We understand that we are impacted by world events and that was the point the Treasurer was making on Friday. We are not immune from the global slowing and the global credit crisis. We are managing those impacts on the economy. What we can do is we can work to making sure that we are keeping downwards pressure on inflation and interest rates. Ultimately getting inflation under control and keeping downwards pressure on interest rates is good for the economy overall, its good for jobs [and] its good for all aspects of the economy.

Underlying this particular instance of the unemployment narrative is this belief that unemployment is predominantly solved through indirect measures. That is good economic growth sustained over time will ultimately solve unemployment. In 2009 Australian Associated Press (2009) reported on comments made by Julia Gillard about the on-going effects of the global financial crisis and the responses being made by the government in which she served as deputy prime minister.

In this report, Julia Gillard states that the government was doing all it could to address the issue of rising levels of unemployment. Gillard noted that the crisis was affecting employment levels with overall employment falling by 21,400 people in June 2009 and so the jobless rate increased to a six-year high of 5.8%. The implication here is that falling levels of employment are directly correlated with rising levels of unemployment. And with the global financial crisis deepening its effect on both employment and unemployment will be the lowering of one and the rising of the other. Gillard was quoted on Alan Jones breakfast program on Sydney radio station 2GB that the expectation was for unemployment to go up and the major cause of this was the global recession. Furthermore, the response by the government was an economic one: to stimulate the economy. Gillard claimed that more than 35,000 economic stimulus projects related to construction were underway, which would mean that jobs would be available for not only construction workers but also those that service the construction industry such as architects and surveyors. Indirectly, the increased consumption flowing from these stimulus projects should also mean that other jobs will also be retained or created.

While the 2008/2009 global financial crisis and the poor performance of the United States and European Union economies obviously do have an impact on the level of employment (and so by implication unemployment), the problem with the view stated above is the implication that unemployed people are a fairly homogeneous group (with similar characteristics) and so getting the economy back into positive growth will have an equal impact on all unemployed people who will have an equally likely chance to be successful in finding another job. But even this view is at odds with the statements made above when it refers to the way in which the stimulus package will create jobs in the construction sector; indeed this recognizes that the unemployed are more a heterogeneous group rather than a homogeneous one.

Looking at the other side of politics, it would appear that there is a high level agreement on the view that unemployment is predominantly an economic issue more than anything else. In an interview with the Sydney Morning Herald (2010), the leader of the opposition, Tony Abbott made the claim that stimulating the economy, is not an effective way to lower unemployment (Sydney Morning Herald, 2010). We're not going to keep the unemployment low if we drop the bundle on reform, if we see a continued spend-a-thon by the Rudd government.... The first is the unwillingness of the Rudd government to wind back its stimulus and the threat that poses to high rates [of inflation?] in the months ahead.

There is convoluted thinking evident in the quotation above. There is a concession that fiscal stimulus did work but now having worked the prudent course of action should be to now wind this stimulus back and just let the economy get on with what it does best - grow! If anything the unexpected fall in unemployment from 5.6% to 5.5% in November 2011 (where most economists were expecting unemployment to rise) should be seen as an indicator that the government had done enough and so should now be winding back its fiscal stimulus policies. On the surface there is a contradiction in the thinking here and possibly an indication that this announcement was more of a political stunt rather than anything to emerge from some serious economic analysis.

Furthermore, although Abbott claims that the then Prime Minister [Kevin Rudd] was not responsible for the Australian economy's resilience to the global economic crisis, there was no mention of what is making it so. Finally, there is the usual catch cry of the conservative parties in Australia that the other economic reform being pursued by the Rudd government, that is the abolition of work choices and the return to enterprise bargaining will increase unemployment levels as it will make it harder for small businesses to employ people. So unemployment will rise if the federal government continues with its fiscal stimulus of the economy, and does not concentrate on labour market reform (whatever that term is supposed to connote). Even though the logic is convoluted, there is essentially an underlying agreement that the way to solve unemployment is mainly through economic measures.

One final example of the economic approach to solving unemployment is given in a media release by Chris Evans when he was Minister for Tertiary Education, Skills, Jobs and Workplace Relations (Evans, 2011) in which Senator Evans welcomes the fact that the unemployment rate remained steady at 4.9% and the participation rate remained steady at 65.6 during 2011. Australia remained the envy of other economies, such as the United States where current economic conditions have produced an unemployment rate of 9%; this was also a demonstration of the resilience of the current Australian economy and by implication the good economic management that the current Labor government is providing. Again there is an attempt to develop a linkage to growing the economy as an appropriate strategy through which governments can solve unemployment (Evans, 2011): As Europe and the United States continue to battle unemployment rates in excess of 9 per cent, Australia's continued low unemployment rate is testament to the underlying resilience of our economy." The latest figures show that in the past month we have seen a return to job creation with 7 800 new jobs created," Senator Evans said. Since coming to office, Labor has created 740 000 jobs, which just demonstrates the success of the Government policies that have kept the economy strong." With the unemployment rate expected to fall to 4.5 per cent by mid-2013, we're focused on building a bigger and better workforce that our economy needs.

The underlying message is clear. Those countries with poorly performing economies (i.e. little or no current economic growth) have high unemployment rates and those economies that are performing well (such as the Australian economy and the interventions the Rudd government made in response to the global financial crisis) have low unemployment rates. As long as governments pursue good economic policies that create jobs (740,000 since labour came to office), unemployment will be solved (an expectation at the time that unemployment would fall to 4.5% by mid-2013).

However against this rhetoric is a 2006 report by the Centre for Policy Development (CPD 2006). It claims that despite many years of record economic growth, the number of long term unemployed actually grew by 68% during the period from 1999 to 2004 (increasing from 75,000 to 127,000 people) when the Australian economy was performing at its best. Furthermore, although the Australian unemployment rate was low when compared to the United States and those countries within the European Union, it is high when compared to the unemployment rates of other countries such as Singapore. This means that pursuing policies of economic growth may be a good idea for a number of reasons, but on its own cannot be seen as providing a comprehensive solution to unemployment. There must be other things that need to be done to address this problem.

This leads into the other elements of the Australian narrative on how to solve unemployment. The first is the view that governments should make the lives of the unemployed difficult and thereby increase their motivation to find work --the so-called 'welfare reform' agenda which is discussed below. The second is the view that unemployed people are predominantly due to the fact that their current knowledge or skill sets do not fit within the current job vacancies within the economy. This view is also discussed in more detail below.

SOLVING UNEMPLOYMENT--'REFORMING' WELFARE

The word 'reform' is often code for tighten or removing welfare from those that are perceived as not deserving some form of government 'handout'. This is a narrative more often heard from the conservative side of Australian politics rather than from the centre left side of politics such as the Australian Labour Party or the Greens. A recent example was the statement made by the conservative leader of the opposition (Tony Abbott) in the Federal Parliament on 31 March 2011 (Farr, 2011). As part of the opposition's plan to return the long term unemployed back to work, Abbott stated that taxpayers wanted their money spent "more efficiently" and that unemployment benefits should be quarantined as unemployed people presumably have difficulty spending the small amount of money they receive through the Newstart program.

Furthermore, under an Abbott government for the young unemployed who stay unemployed despite the fact that there are available jobs, their Newstart allowance would be cancelled (Farr, 2011). For the long-term unemployment an amount of $244.00 from their weekly unemployment benefit would be quarantined and so only available to spend on the essentials for living. There would also be a greater effort to push unemployment and disabled people with low level disabilities into any job that is available (Farr, 2011).

The government is also developing its own welfare reform agenda. In a speech at The Sydney Institute, the now Prime Minister Julia Gillard committed her government to 'welfare to work' reform. Although not as stark as the Abbott plan the outcome is essentially the same; get people (even those considered hard cases such as unemployed people who left school early) into some form of employment and so off any government unemployment benefit. The Prime Minister saw these reforms as win-win situation: the unemployed gain dignity through employment; these people also provide a double benefit in the sense that they now pay taxes as well as no longer receive a payment from the government. Whether the social good outweighs the underlying fiscal benefit is moot. Is it good enough for an unemployed to do any job available rather than do any job that is acceptable?

SOLVING UNEMPLOYMENT--TRAIN THEM

Finally the third simple (or simplistic) strategy that will solve the unemployment problem is to identify skill or knowledge deficits and address these deficits through some sort of training. People who are unemployed will, on average, have a better chance at getting another job by undergoing some form of training or re-training. This view also has a reasonably long history and support from both sides of parliament. For example the Centre for Policy Development (CPD, 2006) has discussed the former government's (Liberal National Party coalition government) approach to the long-term unemployed. The CPD (2006) report claims that most Australians would agree with the common sense position that handouts are a short term response and not a long term answer to an on-going issue. The problem with the mutual obligation approach was that it was obfuscated by other conservative dogma such as the belief in a small government that is essentially non-interventionist. As the problem was an individual problem, governments did not have a responsibility to convert this simple battle into a complex set of policy initiatives necessary to address the issue. For example, what sort of training should be undertaken and who should make the decision about this--the unemployed person or someone else? Under mutual obligation this was something left up to the unemployed person.

So despite the success of the Federal Government's 'mutual obligation' policy to encourage passive welfare recipients into a more active role, many consider that the policy is really a welfare reform handout dressed in another guise. Particularly for the long-term unemployed, the issue is one as to whether or not it is a long term solution; that is, in many cases the so-called work activities do not have vocational outcomes. So while the long term unemployed person is doing something, the activity often has no direct link to a pathway back to a job. The outcome is that the long term unemployed stay unemployed and to a large extent become fodder for those jobs that nobody wants which only exist through government funding. Furthermore, the underlying premise of mutual obligation had not really been tested but merely accepted as a matter of faith; jobseekers could solve their own problems far better than anybody else. As the CPD (2006) report claims, despite many years of continuous economic growth and the application of the mutual obligation policy, the number of long term unemployed actually increased between 1999 and 2004. So why is this so? The CPD (2006) report provides a partial answer in its claim that economies not only grow but change in both structure and character: The Government's policy places the responsibility upon low-skilled and unskilled jobseekers to solve their own unemployment crisis through a 'work first' approach that largely ignores vocational training. However, such individuals have often left school early without even having obtained a vocational skill, or are the formerly retrenched workers of Australia's rusting manufacturing industries. In every case, they face multiple barriers to finding and keeping work--barriers that are not overcome by the politics of blame. What they need is access to education and training.

With every strategy there must be an implementation: and this was part of the problem with the mutual obligation policy. The policy did not have any comprehensive intervention strategy as the problem was seen as something that individuals had to solve rather than governments. Compared to the non interventionist dogma of the conservative political parties and other organisations, the dogma from the other side of politics includes the belief that governments should be interventionist. The Rudd government response to the global financial crisis is one clear example of the level of intervention which Labor governments are willing to make.

Some five years after the report by the Centre for Policy Development (CPD, 2006), Whittaker (2011) reports on the comments made by both Prime Minister Julia Gillard and the Treasurer Wayne Swan about the Labor government's current attempt to solve unemployment. As part of the communication process related to the 2011-12 budget, the Prime Minister is seen to provide solid support for the training view. Prime Minister states that part of the 2011-12 budget strategy (termed 'Building Australia's Future Workforce') is to get Australian unemployed people back to work through addressing skill shortages in the Australian economy through more training and apprenticeships places (Whittaker, 2011): Swan said the government's Building Australia's Future Workforce program was about getting "more people into work, and to train them for more rewarding jobs. So that the national prosperity reaches more lives, in more corners, of our patchwork economy.

However, the budget also discusses increasing the migrant intake to address these skill shortages as well, which indicates that the government itself sees the limitation of the training view in terms of its ability to solve unemployment in Australian. Furthermore, Whittaker (2011) also reports on an interesting conflation by the Prime Minister of the welfare reform and training views when the Prime Minister wants to increase the crackdown on the unemployed to get them either "earning or learning".

There is also another commitment to the growing economy view as the Treasurer commits the government, prior to the release of the 2011-12 budget, to creating another 500,000 new jobs which will lead to reducing the unemployment rate to between 4.5% and 4.9%. However, the Treasurer also provides an insight into a weakness of this approach when he talks about the patchwork economy (Whittaker, 2011): that is, economic growth is not necessarily evenly spread across the economy. At the moment the mining boom means that the economies of Western Australia and Queensland (Australia's two largest states) are booming while the other states are not. This means that there must be a high level of labour mobility in Australia to get those unemployed people to move from their current locations where work is difficult to obtain to those locations where at the moment work is easier to find. Again, simply growing the economy is too simplistic an approach. Even more, given the statements discussed above, there appears to be little understanding of the interactions of these that simplistic approaches have beyond slogans such as getting unemployed people to 'earn or learn': for instance how do the approaches to welfare reform and training interact?

RESEARCH METHOD, ANALYSIS AND DISCUSSION

The discussion outlined above would imply that the simplistic approaches often adopted for many politicians on the basis of adherence to a particular dogma or belief do not in themselves provide an answer (either individually or collectively) to solving unemployment and in particular to addressing the more intractable problem of solving long-term unemployment. Although the above may offer some assistance to reducing unemployment, they are considered blunt instruments that either by themselves or collectively do not provide a total solution. In fact given that the Australian unemployment narrative includes three quite different approaches does in itself demonstrate that a complex problem exists in this area rather than a simple problem. This maybe a symptom of our time: the current political debate or diatribes being swapped between government and opposition means that we cannot have a debate on complex multi-dimensional issues such as unemployment. Everything needs to be reduced and/or simplified into easily digestible slogans and sound bites.

As the analysis below will demonstrate it is time to move away from these narratives and their simplistic approaches to a recognition that solving unemployment is a more complex and multi-dimensional problem that requires a portfolio of solutions, and an understanding of the interactions that these solutions have with each other either individually or collectively.

Given the exploratory nature of the current study, it was thought that this initial study should focus on only two of the three narratives discussed above; that is, growing the economy to create more and more jobs making find work easier, and giving unemployed people, particularly the long term unemployed, more and more training to make the prospects to securing work easier. With respect to the reform welfare narrative, this issue requires a significant amount of in depth investigation and analysis; therefore any commentary about the effects of reforming welfare and its impact on lowering levels of unemployment will reported on in another paper.

The analysis set out below uses Australian Bureau of Statistics (ABS) labour market and other time series data such as surveys of people not in the labour force. Traditional time series methods are used to analyse these ABS data. As this analysis is a first step in understanding the complex nature of solving unemployment it was considered that a far more useful approach would be to plot the data as a series of X-Y graphs using MS-Excel as the tool. One benefit of this approach is that the analysis is kept simple and so avoids the necessary explanations associated with using a range of arcane statistical tools such as performing autocorrelation and auto-covariance analysis on time series data (either smoothed or unsmoothed) or considering the outputs from ARIMA or GARCH model fittings.

With respect to the narrative that unemployment is solved by growing the economy the following graph presents data from the Australian Bureau of Statistics (ABS) Labour Force Survey (ABSa, 2011). This survey produces actual, seasonally adjusted and trend time series for the main measures related to understanding Australian labour, such as:

* The number of people in the civilian population (indicated in the graph below as the pink time series) = Persons in labour force (yellow time series) + Persons not in the labour force (dark brown time series);

* The number of people currently forming the Labour force (indicated in the graph below as the yellow time series) = Persons employed (light blue time series) + Persons unemployed (maroon or purple time series); and

* Those people currently not in the labour force (indicated in the graph below as the dark brown time series) = Persons who wanted to work but not unemployed (dark blue time series) + Persons who do not want to work (light brown time series) + Persons permanently unable to work (dark green time series).

It should be noted that the chink in the major time series is due mainly to the fact that the ABS re-defined the civilian population from '15-69 years' to '15 years and over' in 2004. Note that this change affected only the time series 'Did not want to work' and had no effect on anything else. It would not be expected that people over 69 years age would either be working or looking for work; but would either be retired or permanently unable to work.

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This graph provides the first insight into whether growing the economy will solve unemployment. It would appear not: if we examine the gap between the 'Labour force' time series (the one coloured yellow) and the 'Employed' time series (the one just below it coloured light blue), this gap has not decreased despite the fact that there was ten years of sound economic growth between 1998 and 2008 and that the global financial crisis had little or no negative impact on employment. If anything in the last couple of years in which economic growth has been slow there appears to be an increasing rate of employment. The graph above shows that the Australian economy needed to grow just to keep up with the growth in the civilian population (the pink coloured time series at the top of the graph). One can also turn this around the other way and so the Australian economy grew mainly due to the growth in overall population and in particular growth in the civilian population.

The graph shown below presents a more direct approach to analysing the validity or otherwise for the narrative that growing the economy (growing the number of jobs within the economy) means that this will solve unemployment. This scatter graph plots pairs of values (percentage change in GDP (X-axis), percentage change in unemployment (Y-axis)). The source data are trend figures for unemployment and trend figures for GDP obtained national accounts data published by the Australian Bureau of Statistics (ABSb, 2011). It needs to be recognised that measures of GDP are flow estimates over the quarter while unemployment is a point estimate measured each month. So in order to have comparable data, the monthly point unemployment figures have been averaged for the quarter, i.e. March quarter value is the average of the January, February and March point unemployment estimates.

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The above scatter graph shows that these (X,Y) pairs are reasonably randomly Distributed--an indicator that there is no strong relationship between these two variables. For example, at zero GDP growth (that is the vertical axis of this scatter graph) there was a drop in unemployment of 2.97% as well as an increase in unemployment of 7.68%. Also for a range of positive GDP growth figures, there was no change in the level of unemployment (the horizontal line shown in this scatter graph). Outliers associated with the global financial crisis (June, 2009) have also been labeled.

Lagging the GDP data by one quarter, i.e. GDP growth must occur before unemployment is affected does improve the situation but there is still no real strong relationship between these variables; for example, in the scatter graph shown below a lot of the (X,Y) pairs plot stacked in a column. This means we have varying changes in the level of unemployment for the same level of GDP growth.

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Using the seasonally adjusted time series data for both levels of unemployment and GDP, as well as lagging these data by one quarter (shown in the scatter graph below) again does not show any strong relationships. So this analysis would indicate that although growing the economy is good for a variety of reasons (increased ability to raise revenue through taxation and so support social initiatives such as the National Disability Insurance Scheme) it is not necessarily good in terms of lowering or solving unemployment.

With respect to the second narrative, that is unemployment can be solved through training these people, the following analysis uses data from the Australia Bureau of Statistics on barriers and incentives to labour force participation (ABS, 2009). The graph shown below presents information related to the main level of difficulty in finding work or finding additional work:

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Although 'Lacks necessary training/qualifications/experience' is the category with the highest proportion, it is still only slightly above 20% and under 20% for females and persons. Therefore, for 80% of unemployed people putting through some form of training may not resolve their difficult in either finding work or finding more work (in the main going from part-time employment to full-time employment). With respect to the more detailed reasons the following is an extract of Table 8 (ABS, 2009, p. 28): 8 PERSONS AGED 18 YEARS AND OVER, WANTED A JOB OR MORE HOURS AND WERE LOOKING AND AVAILABLE TO START WORK/MORE HOURS WITHIN FOUR WEEKS, Selected main difficulty finding work/more hours--By sex MALES 000 % UNEMPLOYED PERSONS Main difficulty finding work/more hours Too many applicants for available jobs * 22.0 *11.4 Lacks necessary training/qualifications/ 47.2 24.5 experience Considered too old by employers * 8.1 * 4.2 Difficulties with language or ethnic ** 9.5 ** 4.9 background No jobs with suitable conditions/ * 21.0 * 10.9 arrangements No jobs or vacancies in locality/line of * 23.4 * 12.1 work/at all Problems with access id transport * 10.8 * 5.6 Other difficulties (a) * 26.4 * 13.7 No difficulties * 6.6 * 3.4 Future starters (b) * 17.8 * 9.2 Total 192.9 100.0 TOTAL Main difficulty finding work/more hours Too many applicants for available jobs 29.8 12.2 Lacks necessary training/qualifications/ 51.1 20.9 experience Considered too old by employers * 9.2 * 3.8 Difficulties with language or ethnic * 9.5 ** 3.9 background No jobs with suitable conditions/ * 24.8 * 10.1 arrangements No jobs or vacancies in locality/line 42.7 17.5 of work/at al Problems with access to transport * 11.6 * 4.7 Other difficulties (a) 35.1 14.4 No difficulties * 12.6 * 5.2 Future starters (b) * 17.8 * 7.3 Total 244.2 100.0 FEMALES 000 % UNEUNEMPLOYED PERSONS Main difficulty finding work/more hours Too many applicants for available jobs * 39.7 18.0 Lacks necessary training/qualifications/ 46.6 21.2 experience Considered too old by employers * 13.2 * 6.0 Difficulties with language or ethnic ** 3.9 ** 1.8 background No jobs with suitable conditions/ 37.4 17.0 arrangements No jobs or vacancies in locality/line of * 21.6 * 9.8 work/at all Problems with access id transport ** 5.2 ** 2.4 Other difficulties (a) * 24.4 * 11.1 No difficulties * 14.8 * 6.8 Future starters (b) * 13.0 * 5.9 Total 219.7 100.0 Main difficulty finding work/more hours Too many applicants for available jobs * 46.3 14.4 Lacks necessary training/qualifications/ 56.9 17.7 experience Considered too old by employers * 19.6 * 6.1 Difficulties with language or ethnic ** 3.9 ** 1.2 background No jobs with suitable conditions/ 54.4 16.9 arrangements No jobs or vacancies in locality/line * 35.6 * 11.1 of work/at al Problems with access to transport * 12.9 * 4.0 Other difficulties (a) 48.2 14.9 No difficulties * 29.8 * 9.2 Future starters (b) * 14.6 * 4.5 Total 322.2 100.0 PERSONS 000 % UNEUNEMPLOYED PERSONS Main difficulty finding work/more hours Too many applicants for available jobs 61.6 14.9 Lacks necessary training/qualifications/ 93.8 22.7 experience Considered too old by employers 21.4 5.2 Difficulties with language or ethnic * 13.4 * 3.2 background No jobs with suitable conditions/ 58.3 14.1 arrangements No jobs or vacancies in locality/line of 47.0 10.9 work/at all Problems with access id transport * 16.0 * 3.9 Other difficulties (a) 50.9 12.3 No difficulties 21.5 5.2 Future starters (b) * 30.8 * 7.5 Total 412.7 100.0 Main difficulty finding work/more hours Too many applicants for available jobs 76.2 13.4 Lacks necessary training/qualifications/ 108.0 19.1 experience Considered too old by employers 28.8 5.1 Difficulties with language or ethnic * 13.4 * 2.4 background No jobs with suitable conditions/ 79.1 14.0 arrangements No jobs or vacancies in locality/line 78.4 13.8 of work/at al Problems with access to transport * 24.5 * 4.3 Other difficulties (a) 83.2 14.7 No difficulties 42.4 7.5 Future starters (b) * 32.5 5.7 Total 566.6 100.0 * estimate has a relative standard error of 25% to 50% and should be used with caution ** estimate has a relative standard error greater than 50% and is considered too unreliable for general use (a) Includes 'Believes disability discourages employers' and 'Problems with access to transport'. (b) People who were not employed during the reference week, were waiting to start a job within four weeks from the end of the reference week, and could have started in the reference week if the job had been available.

Although again 'Lacking necessary training/qualification/experience' is the most important category (22.7% for unemployed people but only 10.1% overall) other issues such as lack of mobility (10.9% for unemployed people and 13.8% overall) or unsuitable working conditions or working arrangements (14.1% for unemployed people and 14.0% overall) again support the view that unemployment is a complex, multi-dimensional problem and will need complex solutions to make an effective reduction in the number of unemployed people possible. Finally, for people who are working predominantly in part-time positions, the chart shown below indicates that 'studying/returning to studies' is the principal reason why people do not want to work more hours (although more for males than females):

PERSONS WHO USUALLY WORKED LESS THAN 16 HOURS(a) AND DID NOT WANT TO WORK MORE, Selected main reason for not wanting more hours

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This chart appears to indicate that more training programs may introduce disincentives in terms of getting people back into work rather than incentives or solutions.

FUTURE RESEARCH

Based on what has been discussed above, obviously this is the beginning of interesting work rather than the end. Therefore, future research will be focussed on developing a better understanding of individual events and causes of unemployment, the attitudes of unemployed people (both short term unemployed as well as long term unemployed) to their ultimate return to work, the attitudes of the unemployed (particularly the long term unemployed) to welfare reform or training being an either incentive to find work or a necessary part of a return to work strategy. In some low socioeconomic communities in the western and south western parts of metropolitan Sydney, unemployment is not only an individual problem but also a generational one; that is entire generations within the one facility have not experienced what it is like to work.

CONCLUSION

This paper considered three major narratives regarding unemployment that have an enduring presence in the political discussion surrounding what to do with unemployment or how to solve unemployment. These narratives were that pursuing good economic growth will provide more jobs and so over time ease existing levels of unemployment. The second was that the unemployed have life to easy and so it is necessary to reform welfare arrangements in order to 'motivate' the unemployed to find work or begin a pathway back to work. Such terms as 'mutual obligation', 'changing from passive welfare recipients into active welfare recipients', 'earning and learning' are usually associated with this approach. The third was that in many cases unemployed people (either short term and long term) are unemployed because they do not have the necessary knowledge or skill sets to find work. That is, unemployment can be solved by providing suitable training or re-training which will remove this barrier (the lack of knowledge and/or skill sets) and so make it easier for the unemployed to find a job.

The first and third of these narratives were investigated in terms of their underlying validity using data published by the Australian Bureau of Statistics. The analysis found that there was no reasonable evidence to presume that either of these approaches did in the end effectively solve unemployment. For example there was little correlation found between pursuing a policy of economic growth and reducing unemployment. It would appear that economic growth is more tied to overall population growth or growth in the civilian population than it is to anything else. It would also appear that there were no strong links in seeing economic growth as a precursor to lowering unemployment by analysing lagged data. Finally, the effectiveness of implementing training programs would answer some issues related to levels of unemployment but the analysis also indicated that there were many other variables of significant importance as a barrier finding work.

The discussion and analysis indicated that there was more work to be done and the paper identified a number of future research projects that could be undertaken to better understanding the causes of unemployment, the attitudes of the unemployment to current assistance programs and their overall willingness to engage in a pathway that will see them return to work or commence work for the first time.

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Ian Caddy

Dennis Mortimer

University of Western Sydney