In less than five weeks’ time, the coronavirus supplement for those on the $565.70 a fortnight JobSeeker allowance will be sliced to $150 a fortnight from $250 – before ending completely in March. The same cut faces those on the $503.20 a fortnight Youth Allowance.
The post-Christmas cut will reduce incomes for hundreds of thousands of people and many communities across the state.
The worst affected will be around Fairfield in Sydney’s west where almost 11,000 people or almost 3 per cent of the state’s JobSeekers live. There are another 5300 people on JobSeeker in nearby Liverpool and more than 6000 in Bankstown.
The Penrith region is also facing a hit to community income, with more than 6600 people on JobSeeker.
Outside of Sydney, the Central Coast areas of Gosford, Woy Woy and The Entrance are JobSeeker hotspots, with more than 10,000 residents dependent on the support.
The coronavirus recession has also hit particular regional centres; the worst affected is Coffs Harbour, where the regional unemployment rate is close to 10 per cent compared with the state average of 6.5 per cent.
The northern inland regional centre of Armidale, which has a large university presence, is also showing signs of struggling in the recession, with the number of people on JobSeeker effectively unchanged over the past month at almost 2000.
One of the nation’s most respected labour market economists, Melbourne University’s Jeff Borland, has found a substantial increase in the JobSeeker payment would not stop an unemployed person looking for work and could even make it easier for them to get the right job.
Professor Borland, whose work on job subsidies influenced the Morrison government’s design of its JobMaker program, compared the national minimum wage of $753.80 a week with a $125 a week increase in the pre-coronavirus level of JobSeeker.
Such a large increase in JobSeeker would mean a person was still receiving only 54 per cent of the minimum wage, so there would still be a huge incentive to find work. Professor Borland said 99 per cent of full-time workers would be earning more than a person on the higher JobSeeker payment.
“Should the JobSeeker payment be increased by $125 per week, recipients would retain a significant financial incentive to work extra days,” he found.
“It would also provide greater capacity to pay for job-search‐related costs such as paying for transport to or clothing for interviews.”
There is concern within some parts of the Coalition about lifting JobSeeker with some citing complaints from individual businesses of difficulty finding staff because of the high level of the coronavirus supplement.
But Professor Borland examined the monthly flows between the unemployed and those in work in data collated by the Australian Bureau of Statistics.
He said as the economy has recovered through recent months, the proportion of unemployed people moving into work was actually higher than between 2017 and 2019.
“Hence, there is no evidence from labour market flows data that the Covid‐19 supplement has decreased the speed of movement from unemployment to work,” he said.
Separate research by online employment and professional services company LinkedIn shows that hiring remained flat across the country through October, down 6 per cent on the same time last year.
While NSW has the most jobs available of any state, there are more entry-level opportunities for people in Queensland, Western Australia and Tasmania.
The ACT has the lowest rate of entry-level jobs, followed by Victoria and NSW.
LinkedIn found people in the travel and recreation areas, which have suffered some of the biggest increases in unemployment during the pandemic, are trying to shift into new areas. Education workers are also moving into high-demand areas such as healthcare.
The Asia-Pacific lead economist for LinkedIn, Pei Ying Chua, said people with digital skills had more job opportunities before the pandemic and also in its wake.
“Digital skills can be gained by upskilling through online learning and can help job seekers pivot quickly and find new opportunities,” she said.
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.