Workforce participation measures

Budget Review 2018–19 Index

Dr Matthew Thomas and Geoff Gilfillan

In keeping with the broader emphasis on older Australians in this year’s Budget, much of the funding for employment participation measures is directed towards supporting mature age job seekers to remain in or re-enter the workforce. Mature age job seekers are defined as those aged 45 years and older.

Mature age labour force participation

As Graph 1 indicates, labour force participation for men aged 45 to 54 years has remained strong and stable over the past 40 years, only falling slightly from around 92.5 per cent in March 1978 to 88.2 per cent in March 2018.[1] Over the same time interval, the labour force participation of women of the same age has risen significantly, from 46.6 per cent to 80.2 per cent.

Graph 1: labour force participation, 45 to 54 years

Graph 1: labour force participation, 45 to 54 years

Source: Australian Bureau of Statistics (ABS), Labour Force, Australia, detailed–electronic delivery, cat. no. 6291.0.55.001, ABS, March 2018.

The rate of labour force participation for men aged 55 to 64 years fell steadily from around 75 per cent in the late 1970s to around 60 per cent in the mid-1980s, as indicated in Graph 2, and remained at about this level for the next 20 years. The rate steadily increased from 60.3 per cent in March 2000 to 73.6 per cent in March 2018. Labour force participation for women aged 55 to 64 years stood at around 20 per cent from the late 1970s to the mid-1980s, but has been rising steadily to around 59.9 per cent in March 2018. The labour force participation rate for all people aged 55 to 64 years was exactly two-thirds (66.6 per cent) in March 2018, which compares with 47.9 per cent in March 2000.

Graph 2: labour force participation, 55 to 64 years

Graph 2: labour force participation, 55 to 64 years

Source: Australian Bureau of Statistics (ABS), Labour Force, Australia, detailed–electronic delivery, cat. no. 6291.0.55.001, ABS, March 2018.

The labour force participation rate for both men and women aged 65 years and older started to accelerate from around 2004. The rate for men aged 65 years plus increased from 10.1 per cent in March 2004 to 17.6 per cent in March 2018, while the rate for women of the same age increased from 3.3 per cent to 10.3 per cent. The labour force participation rate for all people aged 65 years plus more than doubled from 6.2 per cent to 13.7 per cent during the same interval.

Increasing the labour force participation of older Australians

In the case of older Australians (55 years and older), labour force participation has increased significantly as a result of a number of factors. These are likely to include:

  • the generally improved health of older Australians
  • the availability of more flexible and less physically demanding forms of employment which have been used by some older Australians to transition to retirement
  • the extended period of economic growth in Australia from the mid-1990s to the global financial crisis (GFC) of mid-2007 to 2009 which created job opportunities for older people and
  • decisions to remain in employment longer which have been influenced by the combination of a slowing in growth of superannuation balances following the impact of the GFC and various measures introduced by successive governments to increase older worker retention, such as the increase in the age at which people are eligible for the Age Pension.[2]

Despite the substantial increase in participation, Australia is on some estimates still only a mid-table performer where it comes to the employment of older people compared with other OECD countries.[3] There is also evidence that many older Australians who would like to work are unable to do so, whether for reasons of age discrimination or a lack of relevant skills.[4] Older people who become unemployed tend to experience greater difficulty than younger people in gaining subsequent employment.[5]

The Budget provides funding for a range of measures aimed at improving the labour force participation of mature age people. These include:

  • $136.4 million over four years for training to assist job seekers aged 45 years and over with tailored career assistance and the development of information and communications technology (ICT) skills
  • $19.3 million over three years for matched suitable training funding of up to $2,000 for workers aged 45 to 70 years who seek to stay in the workforce longer
  • $15.2 million over three years to assist mature age workers who are likely to be retrenched or leave the workforce to remain employed or find a new job
  • $17.7 million over four years towards Entrepreneurship Facilitators who will assist older Australians at risk of unemployment to become self-employed[6] and
  • $17.4 million over four years to establish the Skills Checkpoint for Older Workers program, which will provide employees aged 45 to 70 with guidance on transitioning into new roles within their current industry or pathways to a new career.[7]

The Government has also indicated that it intends to ‘establish a collaborative partnership with the Age Discrimination Commissioner, business peak bodies, universities and other experts to encourage employers to create more mature age friendly workplaces and reduce age discrimination’.[8]

Comment

The Skills Checkpoint for Older Workers program is based on a pilot which ran from December 2015 to May 2016. The pilot was delivered in three locations by select members of the Australian Apprenticeship Support Network (AASN), and had 1,067 participants. The findings of an evaluation of the pilot undertaken concurrent with its delivery were generally positive, and some of its recommendations, such as raising the upper participation age beyond 54 years, have been adopted. It was a recommendation of the Australian Human Rights Commission’s national inquiry into employment discrimination against older Australians and Australians with disability that the program be rolled out across Australia.[9]

It should be noted that much of the funding for the above measures is not new; many of the measures have been partially funded from existing Department of Jobs and Small Business resources.

Other workforce participation measures

While a majority of the funding for workforce participation measures in this year’s Budget is directed at mature age job seekers and workers, there is also funding for:

  • an online employment services trial for the most job-ready job seekers ($12.2 million over three years)[10]
  • a trial of localised approaches to delivering employment services in ten disadvantaged regions ($18.4 million over three years)[11]
  • assistance to ensure continuity of service in the transition to a new funding model for Disability Employment Services ($9.9 million over two years) and
  • the extension of the Transition to Work program which provides intensive, pre-employment support to early school leavers aged 15 to 21 years to improve their work readiness and help them into work or education ($89.0 million over four years).[12]

It should be noted that, once again, much of the funding for these measures has been derived from existing resources. While the budget papers state that an additional $89.0 million has been allocated towards the Transition to Work program it is not clear how this reconciles with the figures in the financial table at page 160 of Budget Paper no. 2, which indicate a reduction in funding over the forward estimates.

None of the above measures will require legislation.



[1].          Under the Australian Bureau of Statistics’ definition of employment, which aligns closely with international standards and guidelines, employed persons are those aged 15 years or over who, during the reference week, worked for one hour or more for pay, profit, commission or payment in-kind, in a job or business or on a farm (employees and owner managers), or worked for one hour or more without pay in a family business or on a farm (contributing family workers), or had a job, business or farm, but were temporarily not at work. Australian Bureau of Statistics (ABS), Labour statistics: concepts, sources and methods, cat. no. 6102.0.55.001, ABS, February 2018.

[2].          See Australian Law Reform Commission (ALRC), Access all ages—older workers and Commonwealth laws, ALRC Report 120, ALRC, Sydney, 2013, pp. 55–56.

[3].          PwC, Golden Age Index: how well are OECD economies harnessing the power of an older workforce?, 2016. For more detailed data on ageing and employment in Australia and other OECD countries, see the Organisation for Economic Co-operation and Development (OECD), ‘Ageing and employment policies’, OECD website.

[4].          Australian Human Rights Commission, Willing to work: national inquiry into employment discrimination against older Australians and Australians with disability, Australian Human Rights Commission, Sydney, 2016.

[5].          Ibid., p. 11.

[6].          Australian Government, Budget measures: budget paper no. 2: 2018–19, 2018, p. 157.

[7].          Ibid., p. 91.

[8].          Department of Jobs and Small Business, ‘2018–19 Budget Jobs and Small Business overview’, Department of Jobs and Small Business website.

[9].          Australian Human Rights Commission, op. cit., p. 17.

[10].       Australian Government, Budget measures: budget paper no. 2: 2018–19, 2018, p. 158.

[11].       Ibid., p. 159.

[12].       Ibid., pp. 160–161.

 

All online articles accessed May 2018.

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