Cost of Long Term Unemployment – deterioration of skills costing more than $8 billion in the year to March 31 in Australia
Cost of long term unemployment is ‘skills atrophy’
While Peter Warrington’s redundancy was voluntary, it was not necessarily welcomed. After months of “weighing up” the offer, he took it. The former public servant, who worked with Transport NSW for 23 years, remained positive, seeing it as an opportunity to test himself. “I have pretty general skills; I wanted to see if I could make a run in another industry, or in another field.” But after nine months on the job hunt, Mr Warrington, who lives in Marrickville with his family, has not secured long-term employment. “There was part of me that thought I should get back in before it gets too late.”
Read more: SMH June 8, 2013 | Lucy Carroll, Matt Wade
Human Capital Cost of Long Term Unemployment
Sydney Morning Herald commissioned economist Dr Nicholas Gruen to explore the feasibility of designing a better measure of the nation’s progress than GDP. The Herald-Lateral Economics Wellbeing Index estimates the cost to Australia’s collective wellbeing from the deterioration of skills due to long-term unemployment was more than $8 billion in the year to March 31. The Index calculates a dollar figure on the wellbeing cost of this process, known as skills atrophy, beyond its narrow economic effect. The Herald – Lateral Economics Index of Australia’s Well-being adjusts GDP to take into account the changes in value of the nation’s stock of physical, environmental and human capital. It also adjusts for changes in health, inequality and job satisfaction to provide a better measure of national wellbeing than traditional economic measures.