One consequence of the Abbott government’s proposed work for the dole scheme might be to increase the number of people unemployed, as measured by the Australian Bureau of Statistics.
From July 2014, the ABS is changing the definition of “active” job search. This change is to bring the ABS into better alignment with international standards. The ABS includes an ‘active’ job search criteria to define the unemployed population. That seems sensible.
But what is ‘active’ job search?
According to international standards and those being adopted by the ABS, “active’ job search steps are those which put a person in contact with prospective employers for work, either directly or through intermediaries (such as employment services, agencies or recruiting firms), or represent steps towards ‘self-employment”.
The ABS note “people who only looked in newspapers or read job advertisements on the internet are not considered actively looking for work, as it is impossible to obtain work without some additional active job search step (for example, contacting the employer).”
The new labour force survey from the ABS will include “logical job search steps that are currently not included.”
Two new active job search steps will be included in the survey:
1. ‘had an interview with an employer for work’ and
2. ‘taken steps to purchase or start your own business’.
The ABS note that “the previous suite of job search steps did not consider steps taken to start or purchase a business as an active job search step. Activities such as applying for an Australian Business Number or licences, or seeking finance to establish or purchase a business, or obtaining premises or equipment, are considered job search activities for people who are looking to be ‘self-employed’, i.e. working in their own business.”
Reflecting the desire of the ABS to meet international standards and get a more meaningful and accurate measure of unemployed, “two steps which are currently ‘active’ steps will no longer be considered sufficient for a person to be classified as actively looking for work. These are ‘checked notice boards’ and ‘been registered with Centrelink as a jobseeker’.
WHAT WILL IT MEAN TO THE HARD DATA?
The ABS note “The changes will have no impact on the estimate of persons employed, but may result in some movement between the unemployed and not in the labour force populations.”
It goes on; “It is anticipated that the inclusion of the two new ‘active’ job search steps (attending an interview and steps to buy or establish a business) would slightly increase the number of people counted as unemployed (who may be considered not in the labour force under the current questionnaire depending on the person’s other job search activities).
This will be offset to some extent by “the changes from active to passive job search (for checking notice boards and registering with Centrelink as a job seeker) [which] will slightly decrease the number of people classified as unemployed. “
So the ABS is not sure what the survey redefinition will in net terms mean for measuring unemployment.
But the work for the dole scheme, which by definition requires “contact” with an employer, just might tip the measurement of unemployment higher as it will no longer be possible, under the proposed scheme, to collect the dole just by checking the notice board at Centrelink and the ABS will now define the person who mas made contact with the employer as ‘unemployed’.
Unintended consequences indeed.