I’m not sure which does the most harm: the cut of A$150 per week in JobSeeker payments due this Friday or the sudden and coincidental volley of media reports about unemployed people refusing jobs, including fruit picking.
$557.85 a week for a single adult is around 80% of the full-time minimum after-tax wage of $669 per week, and a good less again as a proportion of what most entry level jobs pay, because most pay more than the minimum wage.
There are other reasons not to pick fruit…
But temporary migrants and young locals are often underpaid in such jobs.
In piece-work like picking where pay is tied to output, there’s no legal requirement to pay minimum wages.
$500 is two-thirds of the minimum wage.
It’s not just the pay that discourages people from taking up crop picking: they need to be fit and able to travel for what’s often a short period of paid work.
Reducing our reliance on temporary migrants would be a first step.
Otherwise, employers won’t compete fairly to attract workers, and local workers will remain wary.
More direct contact between the employers and unemployed people and less reliance on labour hire firms would help build trust.
…and other reasons not to work more days
Jobseeker tops up the wages of many part-time workers.
It is cut by 50c for every dollar earned above $53 per week, then 60c for every extra dollar earned up to $128 per week, before cutting out completely for a single adult on $544 per week.
Former social security official David Plunkett calculates that before COVID and the effective doubling of JobSeeker, a worker on it gained a net $100 to $200 for working one to three days a week at the minimum wage, climbing to $269 for the fourth day, after which Jobseeker expired.
Since the new arrangements and top up that effectively doubled JobSeeker, the net gains have fallen slightly $100 to $175 for the first three days, before dropping to just $5 on the fourth.
There’s no need to force people to choose between poverty and entry-level jobs.
Even if, for example, Jobseeker was increased permanently to the pension rate, it would still be under 70% of the minimum wage after tax.
Incentives for part-time work can be fixed by reforming income tests and tax. Beyond that, the answer to periodic labour shortages, exploitation and high turnover in entry-level jobs is better entry-level jobs.
- ^ due this Friday (www.servicesaustralia.gov.au)
- ^ media (tinyurl.com)
- ^ reports (7news.com.au)
- ^ 3% (lmip.gov.au)
- ^ $557.85 (theconversation.com)
- ^ more than the minimum wage (findanexpert.unimelb.edu.au)
- ^ no evidence (www.jec.senate.gov)
- ^ 70% more (www.dropbox.com)
- ^ required (www.oecd.org)
- ^ parliamentary inquiry (www.abc.net.au)
- ^ very low wages cash-in-hand (www.ag.gov.au)
- ^ at least $500 per week (cdn.theconversation.com)
- ^ many people on Jobseeker (www.data.gov.au)
- ^ Unemployment support will be slashed by $300 this week. This won't help people find work (theconversation.com)
- ^ ways to reduce (www.sydney.edu.au)
- ^ David Plunkett (twitter.com)
- ^ The compromise that might just boost the JobSeeker unemployment benefit (theconversation.com)
- ^ cut off (cdn.theconversation.com)
- ^ is proposing (www.servicesaustralia.gov.au)
Authors: Peter Davidson, Adjunct Senior Lecturer, UNSW