In an age of low unemployment in Australia, what about those locked out of the jobs market?


As we herald this new age of record low unemployment, there is a little-known but long-term trend that ought to be injected into the public discourse.

The fact the Australian Bureau of Statistics unemployment rate has dipped dramatically in the past few months, and will potentially fall below 4% on Thursday, has been welcomed by the Coalition, Labor and economists as a good thing.

But what of the plight of those still locked out of the jobs market?

The little-known fact is this: according to the latest statistics published by the Department of Social Services, 40% of those on the jobseeker payment – that is, the primary unemployment benefit offered by Centrelink – are unable to work full-time.

And it is not because they don’t want to. It’s primarily because, according to Centrelink, they live with an illness or disability that prevents them from doing so.

This is a cohort of people that has grown astronomically over the past decade, but, despite the warnings of welfare advocates, has been all but ignored by governments amid the focus on the ABS’ headline unemployment rate.

As years have gone by, the average person on jobseeker has changed markedly.

Not all of these people are covered by the current 4% unemployment rate compiled by the Australian Bureau of Statistics at all times: some are temporarily not looking for work because of a condition, caring responsibilities or their age. They come in and out of job searching.

Others are working some hours each week, though their income is still low enough that they need welfare payments to supplement their earnings.

And some people considered unemployed by the ABS don’t collect unemployment benefits at all, either because they’ve chosen not to claim them or because they’re ineligible.

With unemployment at a record low, a narrative has emerged in some quarters that with many businesses desperate for workers, those who are not finding work must be choosing to be unemployed.

Factcheck: is Scott Morrison right about a minimum wage increase hurting inflation? – video

In fact, massive changes to the welfare system (essentially making it harder to get the right payment), as well as the chronically ineffective employment services system (recently overhauled once again) – as well as age and disability discrimination – are the real story.

Alex Paine, 22, lives with Ehlers-Danlos syndrome in the Melbourne suburb of Clayton. Paine’s condition means she could not do many jobs, though she is required to look for work to keep getting the jobseeker payment, currently set well below the poverty line at a base rate of $46 a day.

‘Honestly, most of the jobs that I have to apply for to meet the quota are things that I just simply could not do,’ says Paine. Photograph: Christopher Hopkins/The Guardian

The few jobs that have been suitable have not fallen her way.

“There’s a very, very limited amount of jobs that are suitable for me, because I have a lot of issues with my legs and my leg joints,” she says. “I can’t stand for long periods of time, I can’t sit for long periods of time.

“So honestly, most of the jobs that I have to apply for to meet the quota are things that I just simply could not do.”

Paine has been rejected from the disability pension and is classified by Centrelink as “partial capacity to work”, meaning a person with a physical, intellectual or psychiatric impairment that prevents them working at least 30 hours a week.

In December 2021, the number of jobseeker payment recipients with partial work capacity was 374,647, or 40% of the 937,638 people who were on the payment in December.

The growth in this cohort of individuals over the past few decades has been shocking. The same figure was less than 10% in 2007, as the Parliamentary Budget Office noted in a report released in 2020, and 25% by 2014.

The same report found that in general the trend is as follows: people on unemployment benefits are increasingly female (in part due to increased workforce participation), increasingly older (due to changes to the pension age and other changes), and increasingly sick or living with a disability (due to a crackdown on the disability support pension.

The report also found people are spending longer on jobseeker payments. In fact, while the average number of weeks on unemployment benefits was 113 weeks in 2014, it is now 166 weeks or more than three years at last count in December 2021.

Brisbane-based Peter Williams, 52, is also classified as “partial capacity for work”. He took a medical redundancy in 2017 but has been searching for work again since 2019, after being diagnosed with myalgic encephalomyelitis (sometimes known as chronic fatigue syndrome).

“I’ve applied for an awful lot of jobs,” he says.

Williams has a background in call centre work and is applying for work in that field, as well as administration.

“I can only work two to three shifts a week, a maximum of five hours per shift, and I need a full day off to recover between those shifts,” he says. “So you can understand the difficulty of trying to get a job with those limitations.”

“There’s never been a better time to get a job, if you’re in certain categories,” he continues. “If you’re young, if you’re healthy … If you’ve got any barriers to employment, you’re pretty much shut down.”

Given the unemployment rate is at near record lows, you might be forgiven for assuming that there are also fewer people on unemployment benefits.

Show more

In fact, there were still 104,310 more people on the jobseeker payment in March 2022 compared to February 2020.

Despite some suggestions in the media to the contrary, the respected academics Prof Peter Whiteford of ANU and Prof Bruce Bradbury of UNSW say this does not mean there are more people on benefits who do not want to work than before. Far from it.

In fact, the December 2021 data shows that 20% of all those on jobseeker payment were in fact already working, but were not earning enough to lose their benefits.

‘I just wish that people understood that this is not a choice,’ Paine says. Photograph: Christopher Hopkins/The Guardian

“The unemployment rate paints a rosy picture, but the reality is there are 100,000 more people on jobseeker now than before the pandemic when the unemployment rate was much higher – 5.1%,” says Kristin O’Connell, a spokesperson for the Antipoverty Centre.

“It ignores the complex circumstances that are keeping so many people out of work and trapped on a payment that is about half the poverty line.”

Paine, who is currently readying a new disability support pension, agrees. “I just wish that people understood that this is not a choice,” she says.