What is wrong with Work for the Dole – reciprocity fail

Continuing her series of posts examining Australia's employment services system, Dr Simone Casey (@simonecasey) discusses the shortcomings of Work for the Dole both as a mutual obligation activity and as a pathway to work. Her previous posts explore issues related to welfare conditionality; ParentsNext; mutual obligation; 'work first' activation of jobseekers; and the growing presence of automation in Australia's welfare system. Dr Casey is an Associate of the RMIT Future Social Services Institute.

A vision for a mutual social contract unrealised

I was Jobs Australia’s policy advisor on Work for the Dole and served on the Department’s advisory group when it was expanded during the jobactive contract. I observed how the expansion of the program to meet a punitive tree-shaking objective was administered first-hand.

There are two main issues with Work for the Dole as a Labour Market Program (LMP). It is poorly resourced and ineffective and does not provide choice or empowerment to job seekers.

Work for the Dole has been a problematic feature of Australia’s labour market programs for 20 years now. It had early origins in the ‘susso’ payment of the Great Depression and post-war projects like Victoria’s Great Ocean Road. In recent history, it was with following the 2000 McClure review that Work for the Dole became a mainstream Mutual Obligation activity. However, McClure’s vision for a mutual social contract remained unrealised primarily because of the shift to the paternalistic behavioural orientation on unemployment that continues to pervade welfare reform rhetoric. In this disciplinary turn, full-time Work for the Dole was ramped up with the Welfare to Work measures of 2006 and targeted at the long term unemployed and others suspected of ‘work avoidance’.

Work for the Dole was expanded again at the beginning of the 2015 Jobactive contract to become a mandatory activity for all job seekers unemployed for 12 months or more.  To accommodate this massive increase in demand for Work for the Dole activities, new administrative arrangements were established in the form of the Work for the Dole Coordinator Contract. As with other LMPs, this contract was awarded through competitive procurement and activity brokerage was established for every employment region. The Coordinators were charged with generating a market of community agencies to take up the role of activity hosts for the anticipated 150,000 activity places required that year.

These hastily constructed administrative arrangements led to a raft of concerns. It soon became clear that the context of competition did not provide for cooperation, and that there were unrealistic expectations for fair fee splitting arrangements between jobactive providers and Hosts.  There were issues with the contract for services between the Host and the jobactive agencies. There were issues with the risk management of activities. The ensuing fiasco involved disputes about contract terms between hosts and jobactive agencies which ranged in scale from missing receipts for tea and coffee to withheld fees in the tens of thousands of dollars.

Remedies were discussed and promoted through the Work for the Dole advisory group. Eventually new instruments were established such as an activity host contract template with more mandatory terms specified, as well as a detailed expenditure and acquittal guide that supplemented the already complicated Jobactive Work for the Dole activity management guidelines. This led to a huge administrative burden to establish, monitor and maintain the quality and safety of Work for the Dole activities – but even this was not sufficient to prevent the tragic accidental death of Josh Park Fing.

Due to a budget blow out and the enormous costs of the initial Jobactive Work for the Dole wave the  2017 federal budget announced the retirement of the Work for the Dole Coordinator contracts,  which led to financial losses for the agencies who had invested in this infrastructure.  There was also pressure to reduce the overall number of Group Activities, and new arrangements to use the Work for the Dole fee to distribute some of the program income amongst jobactive providers.  This seriously short-changed Hosts, who began to report being offered in the vicinity of $400 for each 6-month place they were required to establish and supervise. This means that most Work for the Dole activities are in large charities which can run the program at scale and cross-subsidise from charitable income while small innovative providers have withdrawn from being Work for the Dole hosts.

I had the opportunity to visit some of these large individual activity hosts and saw evangelical Church-based charities with enormous factory buildings in industrial estates. In the various rooms of these building there were a range of basic activities available such as bead jewellery (i.e. threading beads onto a string); second-hand clothes sorting (for thrift or opp shops); and furniture restoration (i.e. cleaning and polishing donated goods). This is not to say there have not been some successful projects or applications of Work for the Dole; but these have often been in spite of the programs’ administrative arrangements and due to the perseverance of a small number of innovative community agencies, desperately seeking resources to administer programs to help the unemployed in their community.

Reciprocity fail

A claim of reciprocity fail is grounded in the history of the program, and the evaluations undertaken from both sociological and econometric premises. Work for the Dole coerces the unemployed to participate in unpaid work at community run organisations.   The moral and ethical justification for it has always been problematic from a workers rights’ perspective because it disqualifies job seekers from fair wages and the protections of working conditions. It is also ineffective as a labour market intervention because it is based on spurious behavioural economic theory about the interaction between coercive policy interventions and human motivation.

It does not lead to improved labour market outcomes for long term unemployed people. Borland and Tseng’s findings on the pilot phase of Work for the Dole, found that participants in the program were no more likely to move off welfare payments after 12 months in the program than a comparable group of payment recipients who did not participate in the program. It is rather a tree-shaking measure intended to flush out the wilfully avoidant few at the expense of those who are structurally unemployed.

Until 2018 Jobactive providers had reduced their reliance on Work for the Dole activities and annual demand for places was predicted as 45,000 (a reduction of almost two-thirds since the commencement of Jobactive). However, this was until the activity hours were increased in September 2018, in a move that has created additional demand for Work for the Dole places. During questioning in Senate Estimates, the Department of Employment agreed that the increase in hours was not based on OECD recommendations. Needless to say, this increase in activity hours was not accompanied by an increase in fees to Hosts even though it means increasing activity hours from 3 to 5 days per week. These high levels of activation combined with low unemployment payments have imposed onerous conditionality on vulnerable job seekers who are not able negotiate alternative activities.  The administrative arrangements have placed an unreasonable burden on Jobactive providers and even more so on Hosts. 

The current iteration of Work for the Dole is not receiving the attention it should despite the fact it remains as problematic as ever.  Observers appear to have exhausted research questions and arguments about its role as a LMP, and these matters were absent from the McPhee recommendations for the future employment services model. If the government orientation on MO remains what it is today it is difficult to see where Work for the Dole would fit within the self-servicing model unless this period is time-limited. If that is the case, we are likely to see Work for the Dole activities managed through the Enhanced Services period due to their administrative complexity.

A poorly resourced and punitive program

Work for the Dole occupies a problematic place in LMPs because neoliberal informed social policy has determined that unemployed can be conscripted to unpaid labour in poorly resourced community agencies. Community agencies are not provided with adequate resources to manage and implement this de facto LMP; rather the resources have been sucked into the Jobactive administrative beast.

Yet when the basic problem facing the unemployed in recognised as the shortage of suitable jobs, there can be no justification for this poorly resourced and punitive program. Without the investment to adequately resource an effective work experience program, Work for the Dole will remain one of the most significant reciprocity fails of contemporary social policy.

Power to Persuade