Hidden crisis of long term joblessness worsens

unemployment lineAustralia’s welfare rolls continue to swell with the number of people on the main payment for more than a year reaching its highest level on record.

At the end of last year, 527,318 had been receiving the Newstart Allowance for more than 12 months, an increase of 12.6 per cent from a year earlier, Department of Social Services figures show. The numbers of long term Newstart recipients has more than doubled since the global financial crisis.

While many of the people receiving the Newstart payment for more than a year are job seekers, they also include people moved on to the payment by changes to government policy, through measures such as tightening the eligibility for disability support pensions.

Labour market and welfare experts say that being unemployed for extended periods can have a deleterious effect on mental health and can lead to problems such as poor health or depression. They say the rise in long term unemployment also points to changes in the labour market, with a loss of low-skilled work.

Other statistical measures also point to the growing problem of long term unemployment. Recent Australian Bureau of Statistics data shows that the number of people unemployed for more than a year has risen 135 per cent since 2008, when the financial crisis first hit.

Minister for Social Services Scott Morrison said more than 200,000 jobs were created in 2014 and job advertisements were at their highest level in two years.

“While it is encouraging that employment has increased over the last year, most of the growth has occurred over the last three months, so it is too early for it to have had a positive impact on the number of long-term unemployment benefit recipients,” he said.

Mr Morrison said changes to Newstart meant more people with disabilities or parental responsibilities had been moved onto the payment and had increased participation requirements. He said government programs were providing incentives to move people away from welfare and into work…

Read more by Ben Schneiders, Sydney Morning Herald 1 February 2015