Should we treat all unemployed people equally?

On Thursday September 15, 2005, Minister for Employment and Workplace Relations Kevin Andrews addressed over 60 delegates of advocacy organisations and concerned citizens. He expressed his confidence in the fairness of the proposed Welfare to Work arrangements, despite there being no legislative substance behind his assertions at the time. Central to his argument was a telling question, which advocates have not adequately addressed: “Why should disabled people and single parents be treated differently to the unemployed?”

The delegation argued (correctly in this author’s opinion) that Newstart Allowance (NSA) at 18 per cent below the Henderson Poverty Line is inadequate for anyone. However an alternative answer is also possible, that certain groups should be treated differently.

This article will outline three key areas of disadvantage that need to addressed by extra supportive effort, both financial and in enabling participation in work and society. These are the capacity of each group, the extra costs incurred by each group and the relative reward for effort experienced by each group. Each disadvantage has severe economic consequences. Failure to counter this disadvantage results in an intergenerational poverty trap that the government assures us is the problem they are trying to tackle.

Capacity

An unemployed person has capacity to work full-time. Most are able to participate in the work, study or aggressive job seeking that will enable them to escape the poverty trap. Once they have a job, if they wish to improve their circumstances, they can work a second job, or study outside work hours to improve their position. This is not to minimise the difficulty faced by long-term unemployed, but they are at least ten times more successful at entering the workforce than the disabled.

If their prospects are poor in their current location, they have the capacity to relocate to a place with better prospects. Single mothers and the disabled require support from family, medical and other services that may be lost or significantly disrupted by relocation.

Commuting time and effort, while frustrating is not a barrier for most. However for those with parenting responsibilities seeking to be available to their children outside school hours, long commutes significantly erode hours available for work away from the local area. For the disabled, the demands of travel also significantly reduce their “functional time”, whether it is for work, or non-work activities.

Clearly the two groups targeted by the Government have reduced capacity. For many, even 110 per cent investment of their capacity in suitable work will not allow them to escape poverty. For an able bodied unemployed person, even a 50 per cent investment of their total capacity is sufficient to provide a way out.

Living costs

Parenting and disability add additional living costs. People with limited earning capacity face tough choices. If their income does not meet the costs of living, they must reduce their costs. They must decide who will suffer. This financial barrier prevents many disabled people from pursuing treatment, which if they could afford it, would increase their capacity. Dietary change, supplements, physiotherapy, counselling and other professional services that could make a difference are beyond their reach. Public services have long waiting lists and limited numbers of treatment sessions if they are available at all. Non-PBS medications and supplements are unaffordable.

Those with children are forced to deprive them of many positive social experiences such as sporting, cultural and religious activities that are increasingly adopting the “user pays” approach. This also impacts on nutrition which is fundamental to children’s brain development and forms another link in the chain that locks the poverty trap.

Transport is another cost impacting on the disadvantaged. For many, a car is unaffordable, public transport is inadequate, and local opportunities are non-existent. Disability transport services are unreliable and expensive, even with subsidies and mobility allowance. The cost of transport places a further burden on people whose disposable income is about to be slashed.

There is also a personal cost. For the disabled, work and travel frequently cause a worsening of symptoms that significantly affect their ability to enjoy and participate in non-work time. For sole parents, the cost is in time and energy unavailable for the role the government assures us is essential to Australian society - parenting.

The able-bodied, unemployed person without sole parent responsibilities can readily address these barriers in ways that are beyond the reach of sole parents and the disabled. Again the groups are fundamentally different.