Yahoo Finance Jobmaker will make life harder for workers over 35. And the Coalition seems happy about that
One of the weird things about the current recovery (such as it is) is that right now there are jobs around for youth but not for older workers, and yet the government, with its jobmaker hiring credit, seems determined to exacerbate that split.
This week the Coalition put in place a perverse incentive to hire younger people for part-time temporary roles over older workers full-time and ongoing.
The government’s jobmaker hiring credit purposefully favours employing people under 35, by giving employers $200 a week for each additional employee they hire aged 16 to 29 and $100 a week for those aged 30 to 35.
Employers can only claim the credit if the headcount of employees and the total payroll increases.
Related: One Nation backflip sinks safeguards to prevent older workers being sacked under jobmaker
That sounds great, except as the head of the ACTU, Michele O’Neil, notes, if you are an employer who “let go two current full-time employees, then you employed five casual and part-time, your overall headcount goes up” and you now get potentially $1,000 a week from the government for doing so.
The government justifies the policy by weirdly claiming that 15 to 34-year-olds are all included in youth unemployment.
On Wednesday the treasurer told parliament that the “the unemployment rate today for those aged 15 to 34 is 10.2%”.
It is a peculiar age group – a 34-year-old worker has nothing in common with a teenager. The standard definition of youth unemployment is either 15 to 24-year-olds or, more narrowly, 15 to 19-year-olds.
While the unemployment rate of 15 to 34-year-olds might be 10.2%, the rate for 15 to 19-year-olds is 20.1%, for 20 to 24-year-olds is 11.2%, and 7.3% for 25 to 34-year-olds.
Even more weirdly, the treasurer suggested this policy was needed because of what happened during the 1990s recession.
He argued “it took 10 years to get the unemployment rate back below 6% from where it started before the recession. For younger people, it took a full 15 years”.
Except it actually took more than 13 years to get unemployment back to “where it started before the recession” and he totally ignores that it also took a full 15 years for the unemployment rate of those aged 35 to 44 to recover – and that the recovery was quicker for those aged 25 to 34.
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The government has totally misread the 1990s recession, which was about the destruction of work for those in their late 30s, and full-time work for everyone.
Prior to the 1990s recession, just under 76% of all 25 to 34-year-olds had a job; it took 10 years to recover.
For 35 to 44-year-olds, it took 17 years to recover.
Prior to the 1990s recession, 63% of both 25 to 34-year-olds and 34 to 44-year-olds worked full-time; it took nearly 16 and a half years for 25 to 34-year-olds to get back to that level; the 35 to 44-year-olds have never got back there.
Related: Jobmaker will create just 10% 'genuinely additional' jobs of Coalition's total pledge, treasury says
And even worse, the policy doesn’t fit with what is going on right now.
The jobs recovery since May has been all about temporary and part-time work: 446,500 people have regained work but only 6,800 are full-time.
Twenty-five thousand people aged 25 to 64 have actually lost full-time work since May.
Bizarrely, given they make up only 16% of the labour force, 41% of the jobs regained have gone to those aged 15 to 24.
It highlights that the recovery is all about cheaper, temporary labour at the expense of ongoing employment for experienced workers.
And the government seems quite happy about that.
The government claims the “usual protections under the Fair Work Act apply” so that people won’t be sacked and replaced with subsided workers, but those protections don’t apply to casual workers (not all full-time employees are permanent).
And given the loopholes which allow for dismissal, unless an employer was dumb enough to say they were doing it to get the hiring credit, the Fair Work Act is going to be of little help.
The ALP and the Greens put up amendments to prevent these dismissals, but One Nation voted with the government to defeat the amendments.
It is true recessions hit young workers hard, but the recovery is always about workers in their 30s and 40s, and this week the government made life harder for them.
