I read an article in the Financial Times earlier this week (September 23, 2023) -…
There is a parable that the Australian Government still doesn’t understand – its the 100 dogs and 95 bones story that all children should be told at an early age. I will tell the story presently. I mention the parable because once again it seems that a major Government initiative designed to reduce disadvantage arising from unemployment will be poorly conceived and constrained by a reluctance of the Government to jettison the destructive neo-liberal approach that has dominated labour market policy for the last few decades. I am referring to today’s announcement from the Government that our youth will all be working, studying or training or face a loss of income support.
The Governmental leaders (via the Council of Australian Governments) today finally gave us their answer to youth unemployment. Its all supply-side and will fail to do anything much more than add coercion to the stress of joblessness.
The Government announced that any Australian under the age of 25 will from now on be “either working, studying or training”. While all 15-17 year olds will be required to be working, training or in school, all 17-20 year olds who are unemployed must also be either training or undertaking some form of study. The training places will be designed to “make the youth more employable”. So this is the full employability approach which is not the same thing as a full employment commitment.
To qualify for youth allowance, anyone under 20 years of age who did not complete Year 12 will have to be studying or in a training program. These conditions will also extend to their parents if they wish to qualify for Family Tax Benefit A. So I guess they are planning to continue to use the “breaching skills” that Centrelink and its privatised partners – the Job Network – built up and perfected under the previous regime to further penalise our disadvantaged citizens!
Where did they get this nonsense from? Well, in the OECD Jobs for Youth: Australia report which I have already discussed in the blog – OECD is at it again! – it is claimed that we should re-focus our secondary education system to increase retention rates up to Year 12 rather than set a minimum school-leaving age. The Report recommended that: (a) the youth allowance be made conditional on having attained, or committing to attain, secondary school qualifications; and (b) more vocational education and training courses and apprenticeships be run through secondary schools.
Anyway, it seems as though our leaders have been reading the OECD report because they are now following it lock-step. The Federal Government claims that it will reciprocate with a youth guarantee. But it isn’t much of a guarantee at all. They are merely guaranteeing “training” and presumably suppressing the labour force data to understate the unemployment rate. The unemployed will be now classified as “in training”.
They are using all the supply-side rhetoric that has dominated the policy debate for years – “need to lift their skills to make them more employable” – and which has been associated with high and persistent levels of labour underutilisation.
The supply-side approach has not worked! When will they understand that? More later in the blog.
The impact will be to degrade our educational institutions (secondary schools) further, by turning them into training centres for the capitalist sector. This is more or less what the so-called reforms of the tertiary education sector did in the late 1980s under the previous Labor regime. They forced an amalgamation between the educators (Universities) and the vocational training institutions (College of Advanced Education, Teachers’ Colleges and Technical Schools) and have compromised both elements of skill development as a consequence.
The plan also sets a national target Year 12 retention rate of 90 per cent by 2015. This has brought their Year 12 target forward five years from those announced previously.
What are the current Year 12 retention rates? The following graph shows Year 7/8 to 12 retention rates for indigenous and non-indigenous Australians from 1998 to 2008. The overall average is around 74 per cent. We rank 23rd in a list of 35 OECD countries for the number of students who complete Year 12. So there is a lot of improvement required in 6 years! As an aside, does their goal refer to the average or for all groups. You can see that while indigenous children have significantly increased their Year 12 retention rates since 1998, they would have to have to double their current rates to reach the 90 per cent target. That is not possible by 2015.
The problem goes deeper than this though. More than 20 per cent of 15 to 24 year olds in Australia are not in full time work or education. Further, more young Australians work than in most of the other OECD countries. Our school drop-out rates for under 16 year olds is higher than the OECD average (14.7 per cent compared to 12.9 per cent).
We have set up policy structures in this country that systematically waste our youth and undermine their potential and future prospects.
The problem for the Australian education system starts much earlier than the latter years of secondary school. We perform relatively poorly when compared to other advanced countries with respect to early childhood education where participation is low. The low participation rates are compounded by the low government spending in this area. The following graph is taken from the OECD’s Report Economic survey of Australia 2008: Enhancing educational performance. It shows the children aged 4 and under as a per cent of the population aged 3 to 4 in 2006. It speaks for itself.
The appalling policy performance in Australia impacts most on children from disadvantaged homes because their parents cannot afford early childhood care. The research evidence is clear – disadvantage is significantly reduced if children participate in well structured early childhood programs. The lack of investment in early childhood care is also exacerbated by our primitive approach to child care and parental leave which are both causalities of our neo-liberal wind back in the public sector and the wasteful surpluses that the previous regime saw fit to inflict upon the nation.
Unfortunately, to lift rates to 90 per cent will require significant changes to early childhood education and primary schooling. The current commitment by the Government to the previous regime’s punitive approach to public education and the massive subsidies to private schooling will not provide that investment and focus. The planning must start now and it will take around 13-15 years to turn the problem around. Very little impact will be noticed by 2015.
The parable of 100 dogs and 95 bones
The main reason that the supply-side approach is flawed is because it fails to recognise that unemployment arises when there are not enough jobs created to match the preferences of the willing labour supply. The research evidence is clear – churning people through training programs divorced from the context of the paid-work environment is a waste of time and resources and demoralises the victims of the process – the unemployed.
Imagine a small community comprising 100 dogs. Each morning they set off into the field to dig for bones. If there enough bones for all buried in the field then all the dogs would succeed in their search no matter how fast or dexterous they were.
Now imagine that one day the 100 dogs set off for the field as usual but this time they find there are only 95 bones buried.
Some dogs who were always very sharp dig up two bones as usual and others dig up the usual one bone. But, as a matter of accounting, at least 5 dogs will return home bone-less.
Now imagine that the government decides that this is unsustainable and decides that it is the skills and motivation of the bone-less dogs that is the problem. They are not “boneable” enough.
So a range of dog psychologists and dog-trainers are called into to work on the attitudes and skills of the bone-less dogs. The dogs undergo assessment and are assigned case managers. They are told that unless they train they will miss out on their nightly bowl of food that the government provides to them while bone-less. They feel despondent.
Anyway, after running and digging skills are imparted to the bone-less dogs things start to change. Each day as the 100 dogs go in search of 95 bones, we start to observe different dogs coming back bone-less. The bone-less queue seems to become shuffled by the training programs.
However, on any particular day, there are still 100 dogs running into the field and only 95 bones are buried there!
You can find pictorial version of the parable here (for international readers this version was very geared to labour market policy under the previous federal regime in Australia and was written around 2001).
If the Government was really serious about a youth guarantee then it would provide work for all those who did not want to stay at school and integrate skill development within that paid-work context.
It would also provide public sector jobs to all the over 55 year olds who have lost their jobs and set up mentoring relationships between the experienced older workers and the young inexperienced workers. All of this can be done within a Job Guarantee scheme run by the Federal Government. Then you would start to get dividends from the training and output from the workers. As it is you will get very little that is worthwhile – but lots of angst.