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September 15th, 2003

I’ll be on ABC Radio National Australia Talks Back tonight, starting about 6:10, debating time limits for unemployment benefits with Peter Saunders (the CIS one).

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  1. derrida derider
    September 15th, 2003 at 14:16 | #1

    Don’t forget to point out that time limits in a pure social assistance system (such as ours) are much harsher than the time limits on unemployment insurance prevalent elsewhere – in fact in most OECD countries you go on to a system very similar to our unlimited time unemployment benefit system after your UI expires. The US, Japan & Sth Korea
    are the current exceptions to this – & even in the US you get food stamps (plus, of course, “welfare” if you have children).

    THe real doozy in the CIS proposal is that public sector job creation (oops, sorry, expanded Work For The Dole) is supposed to be cost-neutral for the government. This just defies experience – the “wage” costs of these sort of schemes are usually dwarfed by the supervision and capital costs (even if you get ’em painting rocks, you’ve got to transport them to the rocks, buy them paint, instruct them in rock-painting, insure them, monitor them to make sure they don’t sell the paint, etc. If you want them to do something more meaningful you’ve got to spend more than this). The only way to get around this is to assume that in fact you will scare people away in such large numbers that you only have to do it for a few. while Saunders would no doubt say precisely this was the US experience, in the US there were few constraints on labour demand until recently, and the target group were mothers – the one group that all the labour supply literature posits as having the highest elasticity of labour supply. Older men in depressed regional areas are a different kettle of fish entirely.

    My own opinion is that in Oz we still have a few welfare cheats – and Work for THe Doile is a powerful way to get rid of them, but very, very few bludgers – the rates and hassle are just too low.

  2. John Quiggin
    September 15th, 2003 at 15:22 | #2

    Thanks for all these points. I was certainly planning on making the point that our unemployment benefit is the same as the fallback assistance in most countries after UB is exhausted.

    It’s also striking how little payoff the US gets for treating the unemployed so harshly. If you take the CIS numbers on unemployment and disability benefits, then throw in imprisonment, the US is on a par with the Scandinavian welfare states. If you look only at male E/P ratios (and males would be most affected by UB time limits), the US is actually behind the Scandinavians.

  3. John Quiggin
    September 15th, 2003 at 15:24 | #3

    I hadn’t picked up the Work for the Dole point, but will certainly use it if I get time.

  4. Don
    September 15th, 2003 at 18:58 | #4

    Wasn’t the Job Compact at 18 months a kind of time limit?

    And why is Saunders advocating a big government approach to tackling long term unemployment? Do the math on the numbers of 6 months plus unemployed and the current number of work for the dole places.

    Saunders is dreaming if he thinks that the bulk of Newstart allowees will melt away just because they get a letter in the mail telling them they have to do work for the dole.

  5. September 15th, 2003 at 19:55 | #5

    Please see what I put on the Monday message board, that PS has replied to me about.

  6. James Farrell
    September 15th, 2003 at 23:10 | #6

    Since you were competing with Episode 1 of Dr Who, it’s possible I was the only one listening, so here’s my ha’pence worth.

    The policy proposal itself really just boils down to expanding Work for the Dole, and accordingly doesn’t raise many fresh questions. The real issue is Saunders’ general position that benefits are a principal contributor to unemployment, that we need a bit more American-style tough love, and that we must eschew European solutions.

    In that context your point – made once at the beginning and again at the end of the program – that adult employment rates in Europe are, at 80%, as high as the US’s, ought to have been the pith of the matter. It’s a shame you didn’t get a chance to tease this out a little. McCutcheon actually let Saunders off the hook when he interrupted with that comment about preferring an invalid pension to jail. In getting all indignant about that he managed to duck the substantive point about hidden unemployment.

    It was fun seeing Amanda Vanstone cast as another left-wing attack dog.

  7. s robertson
    September 15th, 2003 at 23:17 | #7

    Want to tell a true story. My sister. Lives United States. Always one of the ‘aspiring class’, went off and got herself an MBA – then worked in corporate sector at good salary. Then, the first of two brain tumours. Enough assets and health cover to pay for it – but then her marriage fell apart. Found another job – downsized her ‘lifestyle’ (bought what she termed a ‘mobile home’) and was doing ok. Then, brain tumour number two. Recovery from that one not so hot. Reduced assets. Also, downturn in job opportunities for women 40+. Eventually, claimed unemployment benefit – which cut out after 26 weeks. Savings gone. Sold the ‘mobile home’. Then, returned to live in the home of her ex-husband, babysitting to earn enough money to meet her needs. Until he dropped dead of a heart attack in the kitchen. He had told the kids she could stay as long as needed – but hadn’t changed his will – so kids got narky – and sold the house. Although living in California – she was told of a job going in Tennessee. She now works there (at 60) for $7 an hour. No health cover. Having suffered some mental distress (and who wouldn’t!) prescribed ZoLoft in California and as low-come, cost was subsidised but in Tennessee…no subsidy and it costs her $200 a month! She clears $479 per fortnight for 88 hours work – and won’t be able to access OAP until she is 67. And if she falls through the crack before that? And me! Came to Australia in 1970 (marriage) – and haven’t worked in full-time paid work since I was 50 (am now 61) – I was hit by a car and have chronic back/hip problems making it difficult either to sit or stand still for long periods (as in a desk job). And I ‘clear’ almost as much per fortnight on benefit as she does – for just taking care of myself. If anyone is a ‘bludger’, I qualify. My sister certainly doesn’t. I subscribe to the NYTimes online – many recent reports about massive layoffs in manufacturing, a rise in the unemployment rate, which means that thousands more will get onto the 26 week benefit – and then? I don’t know whether or not Australia is truly ‘the lucky country’, but I do count myself very lucky indeed in being here, and not there. I fear for my sister’s life. If not this year, then 5 years hence.
    The ideology of powers that be re income support where the unemployed (or otherwise unsupported) are somehow the ’cause’ and thus must bear the consequences is generally nonsense – and in the States – massive deficits, massive downgrading of public schools and universities – paying for war rather than for the welfare of the people. It’s obscene. And Australia! Or, rather Howard – a world superstate wannabe! Madness!

  8. Jill Rush
    September 17th, 2003 at 21:39 | #8

    Those who can rarely stay on the Dole longer than necessary and most will move off in the first three months. Those who are older, less educated or damaged in some way stay around a lot longer –
    often not for want of trying but through lack of work. A 6 month limit may create more jobs as even now people work for nothing for weeks ‘on trial’ or ‘work experience’.

    Work for the dole has a number of costs but is not so easy to expand widely as community groups need to have suitable tasks, supervisors, materials etc. There is a lack of structured training and the jobs created often do not lead to marketable skills.

    I prefer people to have an income for as long as it takes as the requirements to attend interviews or be breached etc is quite difficult anyway. There may be cheats but by and large the amount of effort put into catching these people would yield far better results if put into catching tax cheats.

    Meantime anyone unemployed is labelled as a dole bludger due to the constant negative press about cheats which suits the punishing government which views welfare recipients harshly. This is while money previously spent on training and work placements goes to the intricate web of providers in a labyrinthian system where noone is responsible as decisions are all made somewhere else.

    We can of course spend more on jails to cope with the people who steal as a result of no longer having any income, have more beggars on the street, have more people living cold and rough. This is not a way that I wish to see this country go which has previously offered a hand up to those down on their luck.

    However, it seems that mateship under Howard’s gang means kicking others when they’re down whilst the rest of us have to worry about home security and safety in the streets. The Welfare Reform envisaged in the McClure Report could have improved the situation for many – but nowhere did that report suggest that benefits should be time limited.

  9. John
    September 17th, 2003 at 22:37 | #9

    Thanks for these useful comments, everyone. James, if I had realised the first episode of Dr Who was on, I might have stayed home myself. OTOH, I saw it the first time around.

  10. September 19th, 2003 at 10:30 | #10

    I doubt if JQ really “saw it [the first episode of Dr Who] the first time around”; I suspect he only saw the first Australian transmission. I on the other hand… (though this was the first chance I’ve had to see the whole of the first story).

  11. James Farrell
    September 19th, 2003 at 11:34 | #11

    I first watched Dr Who in the mid-seventies. By then it had already become self-parodic and I never became a fan. But I’m finding that these original episodes – apart from No.1 which I missed in favour of Dr Q – are spine-chilling. I can well imagine that someone who watched them as a twelve-year-old in 1963 would have become the Doctor’s slave for life.

  12. September 21st, 2003 at 20:53 | #12

    Nine, not twelve. And the “self parody” is the sort of thing that the Avengers already had when I first saw that, the loss of which in later series I found the most disappointing thing about them.

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