Rushing dole recipients ‘back to work’ is a boon for lousy bosses

The federal government is expected to increase the JobSeeker rate today by $50 a fortnight in exchange for tougher mutual obligation requirements.

Recipients are currently receiving a $150 coronavirus supplement per fortnight, which will end next month. Under the new deal, single people on the dole will get $615.70 a fortnight.

Recipients have been campaigning for the full $550 coronavirus supplement to be reinstated and made permanent, as part of the #80aDay campaign by the Australian Unemployed Workers Union.

However, as Sky News political editor Andrew Clennell reported on Sunday, Morrison’s fiscal “razor gang” resolved on Friday to only lift the permanent rate modestly “to encourage people to find work”.

The meagre announcement will be shattering news for recipients who must brace themselves for a further payment cut.

An epidemic of lazy rhetoric

The news is hardly surprising, given the Coalition have been laying the groundwork for a further rollback in recent weeks by emphasising the need to get recipients “back to work”, invoking the well-worn trope of the mythical “job snob”.

Every few years, conservatives have a collective conniption about a supposed explosion in the pickiness of the nation’s jobseekers. The AFR legitimised this rhetoric with multiple recent articles decrying welfare recipients supposedly “gaming the system”, following News Corp’s ongoing amplification of the Coalition’s anecdotal evidence of recruitment shortages.

These claims do not match the evidence. Indeed, more generous payments appear to increase recipients’ commitment to work.

Especially unfounded is the present notion job seekers refuse to relocate for work, which in reality many would consider except when the work is precarious and the move is prohibitively expensive.

A rushed job search helps no one…

In fact, a growing body of evidence suggests Australia would be better off discouraging jobseekers from jumping hurriedly back into the job market. Indeed, we should encourage them to be more “snobbish”.

While the literature remains somewhat contested, researchers are increasingly finding that generous benefits support the jobless to find jobs that best suit their skills and education.

If they can invest time in a thorough job hunt, unhurried by the threats of eviction and malnourishment, they find positions with better pay, security and conditions, and remain at their next employer for longer.

This benefits the individual, who will be more affluent and fulfilled; the company, who get a more engaged and motivated employee; and the overall economy, which benefits from the greater productivity facilitated by better job matching.

…Except lousy bosses and their political allies

Conservative politicians, however, have powerful incentives to resist this conclusion beyond sentimentality for the romantic ideal of plucky applicants “pounding the pavement” with stacks of resumes.

The core of the Coalition’s base is small business owners, who stand to benefit most from desperate jobseekers’ willingness to accept substandard job offers. If welfare benefits are enough for one to hold out for decent opportunities, small businesses are more likely to be outbid for talent by bigger organisations. Small businesses then have to *shock horror* invest in training people with fewer skills.

But if life on the dole is virtually unliveable, overqualified applicants will hurriedly send their resume for any slightly-less-terrible opening. As US-based journalist Matthew Yglesias has said, “the Republican Party’s car dealership-owning base … love a situation in which well-educated, non-trouble making, super-competent people are desperate to go get a shitty, low-paid job with bad working conditions … but that’s not actually what a good economy looks like”.

Off-ramps > cliffs

To support better job matching, economist Steven Hamilton of the Blueprint Institute has floated an unemployment insurance (UI) scheme, which the Morrison government is reportedly considering.

The suggestion initially faced some backlash from dole recipients due to the AFR’s framing of the reform as a potential replacement for the “open-ended dole”. But as a complimentary reform, as Hamilton later emphasised it must be, UI could help defuse the sudden shock of being unable to pay one’s mortgage or rent.

A cohort that could use such a smoother transition, for instance, are the thousands likely to be laid off after the JobKeeper subsidy ends in March.

Before the pandemic, Australia had the lowest benefit for newly unemployed people in the OECD. Without a bigger JobSeeker boost and a UI scheme, recipients will continue to be robbed of the positive freedom to make careful decisions about their long-term future.

But perhaps that’s the way Australia’s ruling class like it.

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