Work obligations don't help unemployed find jobs - study

Poverty advocates aren't surprised by new research showing work obligations for the unemployed don't help them find jobs. 

Researchers looked at Australia's Jobactive scheme, which recipients of the unemployment benefit - called Newstart - have to take part in, or face sanctions. Aussies who miss appointments with Jobactive face not just having their benefits cut, but cancelled altogether.

When then-Employment Minister Luke Hartsuyker introduced the strict obligations in 2014, he said they were "not onerous and are designed to maximise the chances of a person moving from welfare to work". 

But research published this week in the Australian Journal of Social Issues "suggest the opposite", its authors say.

They found last year, more than 93 percent of sanctions applied to beneficiaries in Australia arose from their failure to meet their job-hunting obligations - despite "little support for the claim that these employment services helped people to find work, or that Jobactive helps them improve their competitiveness in the job market".

"Unemployed workers say appointments have little utility for advancing elements of mutual obligation and are psychologically harmful," Monash University's David O'Halloran, Louise Farnworth and Nikos Thomacos' study says.

"Non‐attendance may be a form of self‐protection, although seeking a medical exemption or dropping out of the system altogether also appears to be a common self‐protection strategy."

Those who kept going reported doing so "only through fear of losing their benefits and becoming homeless, or not having enough to eat" - not because they thought it would get them a job. 

"Most participants reported that while they had expected their provider to refer them to jobs, few had that experience, or if they had, the jobs were frequently inappropriate... We did not encounter any participants who said that they did not want a job."

There are similar obligations for people on New Zealand's Newstart equivalent, Jobseeker Support. 

"If you don't meet your obligations without good and sufficient reason, your benefit could be reduced or stopped," Work and Income's website states.

Ricardo Menendez-March.
Ricardo Menendez-March. Photo credit: The AM Show

Ricardo Menendez-March of Auckland Action Against Poverty says the Ministry of Social Development, which runs Work and Income, knows job schemes and the threat of sanctions doesn't help people get off the dole.

"A 2018 Government report on people leaving the benefit system into work showed unemployed people are forced into low-wage employment, many facing their benefit cut completely if they don't take the first job offered to them, no matter how unsuitable it may be," he told Newshub. 

"People on the Jobseeker benefit with work obligations, despite making the largest proportion of people exiting the benefit, were just as likely to return to a benefit over a period of 18 months than those on the same benefit without work obligations."

And people who were allowed the time to find better-paying jobs - rather than taking whatever was put in front of them - "were more likely to remain in employment for longer", he says.

"The sanctions for people on the jobseeker benefit are cruel, as are all other benefit sanctions."

In 2017, advice provided to then-Social Development Minister Anne Tolley - a National MP - said the evidence clearly showed sanctions actually make it more likely people will stay on benefits longer.

But since taking power later than year, the Labour-NZ First coalition - generally seen to be friendlier towards those on lower incomes and on benefits than the National Party - has only removed a single sanction from beneficiaries who fail to meet obligations (people receiving the Sole Parent Support benefit who don't name the other parent). 

The Child Poverty Action Group told Newshub work obligations are often "heavy-handed" and can force people into work "that is insecure or makes them worse off". 

A 2017 report by Parliament's Social Policy Evaluation and Research Unit (formerly the Families Commission) found sole parents in particular often found themselves back on a benefit within two years of being obligated to take up work. 

"Any kind of paid work needs to be secure, and provide adequate incomes, as the constant movement between work and benefit is difficult," said spokesperson Mike O'Brien, adding that jobs offered to beneficiaries often don't lift them out of poverty.

"A requirement to work has often meant any kind of work, and given that almost half of those below the poverty line are in paid work, then the question of income level is critical."

The unemployment rate in Australia is at 5.2 percent, 24 percent higher than New Zealand's. Australia's current Employment Minister, Michaelia Cash, says she has "no apologies for trying to get people off welfare and into work".

"On every metric, Jobactive is delivering for job seekers," she told the Sydney Morning Herald. "More than a million people have found work under the program. The program continues to achieve around 1000 job placements every day.

"However, more can always be done. That is why we announced plans to completely transform the employment services system by 2022."

Minister of Social Development Carmel Sepuloni told Newshub the Government is "committed to a fairer and more accessible welfare system", and "intensive case management works".

"We invest in Active Labour Market policies that work and that we do more in the education system to ensure that people leave school with qualifications so they don’t come onto benefit in the first place...

"This  Government has invested in 263 work-focused frontline Ministry of Social Development staff focused on getting people into benefit into long-term work.

"The Government is also focused on upskilling and training people on benefit  for jobs that are here now and will be in the future."