Welfare Reform and Young People: Policy v evidence

Supporting people into paid work has many positive benefits, but are current 'earn or learn' policies in regards to young people going to help or hinder their economic participation? In this post, Tanya Corrie and Susan Maury from Good Shepherd Australia New Zealand reflect on what the evidence says, and ways policy can be built to enable better outcomes.

Too many Australian young people are locked out of the workforce. A recent study has found that “more than 580,000 young Australians are now either underemployed or unemployed. Overall, this represents more than a quarter of 15 to 24 year olds in the labour market.”[1]

There are many positive benefits of participation in paid work and education. It reduces the likelihood of financial stress, positively impacts on self-esteem and social relationships and young people’s life chances dramatically improve with each level of education completed.

So the recent government push to ensure young people are ‘earning or learning’ should be, in theory, positive.

However, the individualised policy responses currently proposed ignore the larger systemic problems within the economy and society that hinder young people’s economic participation.

In May-June 2014, there are 747,000 unemployed people[2] for 146,000 job vacancies.[3] Simply put, if there are too few jobs for the number of young people who are unemployed.

To remedy this, there needs to be stronger emphasis on job creation policies.

The young people we work with have many complex needs which provide further challenges to their economic participation. They are usually unable to live at home because of family violence, drug and alcohol abuse, and/or family dysfunction. These experiences often impact on their capacity to remain engaged in education and hence their job prospects. These young people require a foundation from which to start building independent lives. This includes housing, job skills, development of life skills, self-esteem and a sense of agency.

This requires multiple and complex interventions that can take time as well as social and welfare systems that appropriately support them.

For young people who are not able to live at home, they need sufficient income to ensure they can maintain a decent quality of life while they are continuing their education. The low rates of Newstart and Youth Allowance make that a challenge for many of the young people we work with as they need to maintain the costs of housing and education. This group often disengages from education because of the challenges they face and require greater financial support to meet their needs. The current rate of Youth Allowance is already well below what is required to live an independent life with dignity. Any reduction or further rationalisation of these payments would have devastating consequences, and services like ours would not be able to meet the increase in demand.

A positive and supportive system works best to support behavioural change.

Sanctions and punitive measures simply do not work in supporting people into work. Studies that analysed the impacts of sanctions, for example, found that some groups in the community, particularly young people, were confused about their obligation requirements. This is often why they did not comply and hence why their payments were suspended, causing severe financial hardship and distress and leading to an increase in demand of community services.[4]

Work with people who are disengaged from work has shown us that a positive reinforcement for certain behaviours is more effective at changing those behaviours than punitive measures. Programs such as Youth Connections were excellent examples of this approach. 94.2 per cent of the young people in the program were still engaged in education or employment six months after beginning the program, and after two years, 81.5 per cent were in employment or education.[5]

There is extensive research into what motivates people to make significant or difficult changes in their circumstances which is also bolstered by an understanding of how to maximise cognitive abilities for enabling change.  Three characteristics must be present in order for an individual to have internally-held, motivation for change:

• individuals have a sense of competency (that is, they feel capable of achieving the task);
• individuals have a sense of autonomy (they are able to self-direct their time and energy);
• individuals have a sense of community, or relatedness (individuals have sense of contributing to a social network through their efforts, and being meaningfully supported by others).

When motivation is externally applied (“controlled motivation”), such as the interventions posited in the current policy landscape, it leads to rigid functioning, reduced wellbeing, and a lack of vitality – in short, characteristics which are inherently de-motivating for action.[6]

When developing policy that is intended to motivate individuals to change, there is greater chance of success when the individual is allowed adequate autonomy to self-identify internal motivations in line with the desired change, is provided with coaching or training to provide a sense of competency to effectively make the change, and is enabled to embed the change within a supportive community.[7]

Current approaches to welfare for young people are unnecessarily and unfairly punitive and will likely have the opposite effect of what is intended. They appear to be driven less by evidence and more by politics and could have lasting and long term negative repercussions for Australia young people.

[1] Brotherhood of St Laurence (2014), Generation jobless: more than half a million young people are unemployed or under-employed. Retrieved September 2, 2014, from Brotherhood of St Laurence: http://www.bsl.org.au/Media-centre/Media-Releases?id=1050

[2] Australian Bureau of Statistics (ABS) (2014), 6202.0 – Labour Force, Australia, July 2014, from  http://www.abs.gov.au/ausstats/abs%40.nsf/mf/6202.0 accessed 03/09/2014

[3] Australian Bureau of Statistics (ABS) (2014), 6354.0 – Job Vacancies, Australia, May 2014, from http://www.abs.gov.au/ausstats/abs@.nsf/mf/6354.0 accessed 03/09/2014

[4] Lackner, S., & Marston, G. (2003). System Error: An analysis of Centrelink penalities and Job Network particicpation reports. Melbourne: Centre for Applied Social Research, School of Social Science and Planning, RMIT University.

[5] Thompson, K. (2014, April 14). Letter to Minister Pyne. Retrieved August 4, 2014, from Kelvin Thompson : http://www.kelvinthomson.com.au/Editor/assets/public_docs/140414%20kt%20letter%20to%20christopher%20pyne%20education%20minister%20re%20youth%20connections%20funding%20ac.pdf

[6] Deci, E., & Ryan, R. (2008). Self-determination Theory: A Macrotheory of Human Motivation, Development and Health. Canadian Psychology 49:3, 182-185.

[7] Locke, E., & Latham, G. (2002 ). Building a Practically Useful Theory of Goal Setting and Task Motivation: A 35-year Odyssey. Amterican Psychologist 57:9, 705-717.