Report Shows Increase in Long-Term Unemployment as Entry-Level Job Opportunities Decline

A new report from the Australian Council of Social Service (ACOSS) has emphasized the decline in entry-level jobs and the rise in long-term unemployment, urging urgent reforms in Australia’s employment services system.

The Faces of Unemployment 2024 report, supported by the Ecstra Foundation, indicates that since mid-2022, when interest rates began to rise, employment in low-skilled positions has only grown by 1.9 percent, compared to the overall growth of 7.8 percent.

During the same period, job vacancies for entry-level roles decreased by 39 percent, surpassing the overall decline of 30 percent.

This disparity has led to increased competition, with the ratio of unemployed or underemployed individuals per job vacancy rising from 2.9 to 4.9.

Decline in Entry-Level Jobs

Entry-level jobs, crucial for those on income support, now represent only 38 percent of employment, down from nearly 42 percent in 2020.

This decrease has exacerbated long-term unemployment, with 60 percent of individuals receiving unemployment payments for over a year, up from 51 percent in 2012.

CEO of ACOSS, Cassandra Goldie, stated, “We are facing a labor market mismatch with fewer entry-level jobs available, making it challenging for individuals on income support to transition back into paid employment.”

The report highlights that 557,000 Australians have been on unemployment payments for more than a year, with 190,000 receiving support for over five years. Among these, 50 percent have a health condition, the majority are women, and nearly a third are over 55.

Employment Services System Under Fire

ACOSS has also criticized Workforce Australia, revealing that only 11 percent of participants were able to secure employment lasting at least six months.

The report characterizes the system as focusing on “compliance and monitoring rather than assisting individuals in finding work.”

The research identifies significant barriers to employment for groups such as older Australians, First Nations people, and those with disabilities, many of whom face workplace discrimination, lack of suitable job opportunities, and insufficient support.

ABS Data Highlights Labour Market Gaps

Meanwhile, the latest ABS labor market data offers a mixed perspective on ACOSS’s findings, both reinforcing and contrasting certain aspects of the report.

Although overall employment has increased to 14.5 million and the unemployment rate remains at 4.1 percent, the ongoing rise in part-time employment—up by 6,200—aligns with ACOSS’s concerns about the scarcity of stable, full-time positions.

The ABS data also underscores persistent underemployment at 6.3 percent, supporting ACOSS’s criticism of a “mismatch” in the labor market, where limited entry-level opportunities hinder the transition from income support to secure employment.

However, the broader job growth indicated by ABS, with full-time employment increasing by 9,700, paints a somewhat more optimistic picture compared to ACOSS’s portrayal of a shrinking entry-level job market and entrenched long-term unemployment.

Unemployment Clash: Opposition vs. Government

In response to the ABS data, Shadow Treasurer Angus Taylor has criticized the government’s approach, stating that “Labor’s assertions about the job market do not align with the reality.”

He argued that declining real wages and skills shortages reflect an unhealthy economy and called for initiatives to support small businesses and boost productivity.

“After two years of Labor’s tenure, real wages are decreasing, and unemployment is rising. Youth unemployment is increasing, and the social services workload has grown.”

Minister for Employment and Workplace Relations Murray Watt defended the government’s track record, emphasizing that over one million new jobs have been created since the Albanese government assumed office.

“This marks the highest number of jobs ever created in a single parliamentary term,” Watt stated, noting that 60 percent of these jobs are full-time.

ACOSS Proposes Bold Solutions

ACOSS has put forth a series of recommendations to address unemployment and enhance Australia’s employment landscape.

These recommendations include raising unemployment support payments, committing to full employment targets by monitoring unemployment, underemployment, and job vacancy ratios, creating advisory bodies comprising employers, service providers, and individuals with firsthand experience.

Further suggestions involve increased investment in national employment programs, such as wage subsidies and vocational education, establishing an independent quality assurance body for employment services, and testing local partnerships to support disadvantaged communities.