Stuck “on a human hamster wheel”: Older unemployed people are likely to remain unemployed much longer than younger people. Photo: Greg Newington

One of the most confronting interviews I have done this year was with Glenda Ellwood-White, a 60-year-old who has been out of work for more than five years.

She lives with her 23-year-old son in a granny flat in Sydney’s inner west. Her income is so low she often cannot afford meals and when she does eat, the menu is monotonous.

“I often think my stomach will kill me if I have any more noodles,” so I often just have a piece of toast and a cup of tea,” Ellwood-White told me.

She likens life on the Newstart benefit to being stuck “on a human hamster wheel”.

We do not hear that much about the struggles of older unemployed people such as Ellwood-White, but it turns out they are likely to remain unemployed much longer than younger people.

Analysis by Marcia Keegan, an economist with consultancy SGS Economics and Planning, shows that a quarter of those aged 45 to 64 remained unemployed for more than a year compared with only 15 per cent of people aged under 44.

“If you become unemployed at an older age, your chances of finding a job are a lot lower than someone who becomes unemployed at a younger age,” she said.

The problem is most acute for those aged over 60 – two-thirds of Newstart recipients in that age group have been out of work for more than 12 months.

So why are older workers so much more likely to be unemployed long term?

Prejudice is a major factor. The Australian Human Rights Commission says discrimination can be found among the job applicants as young as their mid-40s. A recent job search experience survey found almost one in five people aged 45 to 64 felt their age was the main difficulty they faced in finding work. Ellwood-White claims her long search for a job proves age-based prejudice is “rife”.

Another explanation is that employers fear a short period of service from older workers.

“If an employer interviews someone in their late 50s or early 60s, they might think the person is going to retire in a few years or take their superannuation tax-free,” Dr Keegan said. “They think they might be able to keep a younger worker for longer, but this is very unfair, because workers in their late 50s or early 60s often want to work for another 10 years or more.”

But older workers can sometimes be demanding. When Keegan explored what wages unemployed people wanted, she found older people, especially men, tended to have higher expectations than younger workers. This might encourage employers to go for younger workers, especially if they have been out of work for a long period.

Disability is another factor. More than 30 per cent of workers aged 60 to 64 have some sort of disability that limits job options. In contrast, the rate of disability among those aged 15 to 24 is only about 8 per cent. The good news is that the proportion of older workers with a disability is falling – among 60 to 64-year-olds, the rate dropped from close to 40 per cent in 2003 to about 33 per cent in 2012.

This year’s federal budget introduced a new policy to reduce mature-age unemployment called Restart. Employers will receive $10,000 over two years when they employ a person aged over 50 on income support for at least six months.

Even so, older workers are a significant part of a growing longer-term unemployment problem in Australia. This year, the rate of long-term unemployment has climbed to 1.2 per cent of the labour force – well above the decade-long average of 0.92 per cent. The Fairfax-Lateral Economics Wellbeing Index – which puts a dollar figure on national welfare – shows the well-being cost of long-term unemployment has surged in the past year and is now a $2 billion-a-year drag on the nation’s collective well-being. Much of the pain is being felt by those aged in their 50s, 60s and 70s.

Source:SMH

Employment Minister Eric Abetz. Photo: Alex Ellinghausen

• ’60 is the new 40′: Julie Bishop

A key plank of the Abbott government’s employment strategy is on the cusp of failure, with just over 500 job seekers so far joining a scheme meant to benefit 32,000.

The $10,000 Restart incentive was unveiled in Treasurer Joe Hockey’s May 2014 budget, the latest bid to tackle a policy area that has long vexed both sides of politics: how to encourage employers to hire mature-age Australians.

Moments after the budget was handed down, Employment Minister Eric Abetz said Restart “more than delivers on the government’s 2013 election policy commitment to lift workforce participation and improve quality of life”.

It was projected to help up to 32,000 people annually.

However, Senate documents show employers have hired only 510 job seekers through the scheme in the five months since its July introduction.

There are nearly 175,000 Australians over 50 looking for work through Job Services Australia.

The documents warn it is difficult to predict the take-up rate for the $10,000 incentive but it was “likely” demand would grow. If it does not, it’s possible the program could fall 95 per cent short of the government’s target.

Job seekers aged 50 or over who have been receiving income support for at least six months are eligible. Employers who hire them receive up to $10,000 depending on whether milestones are met.

The government has budgeted $524.8 million to fund the project over four years.

Prime Minister Tony Abbott and Senator Abetz point to the scheme as an important component of the government’s so-called Economic Action Strategy.

“As our population ages it’s more important than ever that we try to ensure older people are contributors economically as well as simply culturally and that’s what will happen under an incoming Coalition government,” Mr Abbott said during the 2013 election campaign.

Senator Abetz on Thursday said the government “expects that take-up will increase as employers become aware of the programme”.

“As it stands, there are more than 600 mature-aged workers in jobs today that weren’t as a result of this programme,” he said, suggesting the total number has grown slightly since the 510 figure was reported in the Senate documents.

“The government is focused on building a stronger and more prosperous economy which will see more employment opportunities as employers gain confidence.”

Luring more mature-age Australians into the workforce is a potential boon for the economy but finding the right policy settings to make it happen has vexed both sides of politics for many years.

Under questioning at Parliament House earlier this year, Department of Employment deputy secretary Martin Hehir said programs targeting mature-age workers had proven to be “quite intractable”.

Just 230 employers took advantage of a $1000 annual subsidy under the two-year life of the Gillard/Rudd government’s Jobs Bonus scheme. That program was also meant to benefit up to 10,000 employers.

“So in one sense we know what has not worked in the past, and it has been quite an intractable area,” Mr Hehir said.

“So while the days are very early and the numbers are probably still low to begin with, you would probably have to say that it [Restart] is making faster progress than the previous work in this area.”

The Abbott government’s Commission of Audit noted that the effectiveness of wage subsidies “is open to question” because they may displace other job seekers and jobs may be lost once incentives expire.

Meanwhile, another job-creation scheme has also struggled to gain traction. The Tasmanian Jobs Programme, which offers $3250 to employers in an effort to revive the state’s sluggish labour market, has created 114 jobs in its first year. The government said it would employ 2000 Tasmanians over two years.

Opposition employment services spokeswoman Julie Collins said wage subsidies were “not enough” to support older Australians.

“We have Tony Abbott telling Australians they need to work longer – but in what jobs? People aren’t taking up wage subsidies because the jobs aren’t there,” she said.

The government has pledged to re-evaluate Restart in mid-2016.

Source:  SMH