Australia's job market is shrinking at the bottom, leaving the vulnerable stuck.

A report released by the Australian Council of Social Service (ACOSS) has spotlighted a troubling shift in Australia’s labour market. 

Entry-level jobs, once a critical pathway for those on income support to re-enter the workforce, are increasingly scarce. 

At the same time, long-term unemployment is rising, with systemic barriers leaving many struggling to escape the cycle of poverty and joblessness.

The report - Faces of Unemployment 2024 - reveals that growth in low-skill employment since mid-2022 has been a modest 1.9 per cent, far behind the 7.8 per cent growth in the broader job market. 

Over the same period, vacancies for these roles have plummeted by 39 per cent, amplifying competition and making it harder for those with fewer qualifications to find work. 

Entry-level positions, which comprised 42 per cent of jobs in 1998, have now dropped to 38 per cent, leaving fewer opportunities for those most in need.

The ripple effects of these trends are stark. 

In just two years, the ratio of unemployed or underemployed people per available job has increased from 2.9 to 4.9. 

For those on income support, this worsening job landscape is particularly challenging. 

The report notes that 60 per cent of Australians on unemployment payments have been receiving them for over a year, up from 51 per cent a decade ago. 

A significant subset, 190,000 individuals, has remained on payments for more than five years.

Health conditions further complicate the issue, affecting half of those on long-term payments. 

A majority of this group are women, and nearly one-third are aged 55 and older. 

These challenges are compounded by structural barriers like workplace discrimination, limited job availability in regional areas, and a lack of tailored support to address these issues.

The government’s employment services platform, Workforce Australia, has come under scrutiny in the report. 

It states that only 11 per cent of participants successfully find work that sustains them off income support for at least six months. 

ACOSS CEO Dr Cassandra Goldie criticised the system for focusing on compliance and monitoring rather than providing meaningful help. 

“People are held back by woefully low payments, which force them into poverty and deprivation,” she said. 

Dr Goldie also called attention to the broader economic context, highlighting that Australia spends only 0.4 per cent of GDP on labour market policies, far less than comparable countries like New Zealand and Denmark, which allocate 1.7 per cent.

Personal stories in the report paint a vivid picture of the human cost. 

“The financial strain is relentless,” one person interviewed for the report said, “you start to feel invisible, forgotten by a system that claims to support you”. 

“I barely survive on JobSeeker. It feels like I don’t have a life,” another said. 

The broader economic environment has added to these pressures. 

Rising interest rates since mid-2022 have softened the job market, particularly in entry-level roles. Many of these positions are casual or part-time, offering little job security. 

This is reflected in the fact that only 45 per cent of workers in entry-level positions are employed full-time, while most of the remaining roles are casual or part-time. 

This structural shift in the economy makes it harder for individuals to achieve financial stability or transition off income support.

Despite the grim statistics, ACOSS believes there is a path forward. 

It has called for substantial reforms, including raising income support payments to at least $82 per day, abolishing automated payment suspensions, and introducing tailored employment programs such as wage subsidies and vocational training. 

More details are available in the full report. 

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