Taking A New Line New Welfare Implications of a Capability Based Approach to Reconnecting High Disadvantage Job Seekers to the Mainstream Economy Jim Williamson BA Melb, MEd La Trobe Senior Manager, Special Projects Brotherhood of St Laurence, Melbourne Australia

Jim Williamson Assistance from: Community Services, Bruce Hart - Reflective Practice BSL Employment and Training Staff BSL Background: Director, Public Policy Consulting Company Senior Policy Officer, Departments of Premier and Cabinet, Finance, Education Lecturer - Education Teacher – secondary Economics and English

Brotherhood of St Laurence (BSL) An inclusive society A compassionate and just society Connected communities A sustainable society Priority Aims

BSL Scope of Works Extensive program with 25 researchers AUD$5million annually Public Policy Research Program Community services, employment and training, aged care $50M annually Service development, innovation and delivery Provision of Services New policies, new programs and practices Partnerships and implementation by government and others. Advocacy and Influencing

BSL Strategic Framework Indigenous Australians Refugees and Immigrants Social and Financial Inclusion Early years and Families School to Work Transition In and Out of Work Ageing 4 key life transitions Cross cutting priorities

Purposes 1.Describe Distinctive Elements of BSL community based Social Enterprises (SE) –Using Intermediate Labour Market (ILM) training strategies –Assist High Disadvantaged (HD) job seekers into mainstream economy. 2.Assess the Effectiveness –Providing a Line of Sight (LOS) program –Creating ongoing work for High Disadvantaged job seekers. 3.Discuss Public Finance Implications of LOS programs –Incorporating Social Enterprise and ILM design features.

Unemployment Melbourne, Australia: 5% Europe and US: 9%

Long Term Unemployed - Australia July ,600July ,700

BSL Social Enterprises Intermediate Labour Market –Concierge and information service on High Rise Public Housing –Cleaning service –Graffiti Removal –Regional Dairy Farm Hand Assistants

Intermediate Labour Market Design Features Bridge to Ongoing Work Paid work Credential with Exchange Value Community Benefit Marshall and Macfarlane 2000

Intermediate Labour Market How BSL Adds Value Prevocational Training –to get HD Job Seeker Job Ready Additional Pathway Personal Support and Door opening Induction in Business Culture and Practices Bowman and Souery 2010

Highly Disadvantaged Job Seeker Profile Unemployed longer than six months Mix of personal and skills based obstacles Low levels of literacy and numeracy Male and Female Younger and older Indigenous and new arrivals Perkins 2007

Generic Capabilities Responses to 10 Penalties of Unemployment Learning By Doing Confidence and Motivation Technical Skills Social Inclusion Business Experience (Sen 1997)

Program Results

Other Success Factors Effective Business Management Skilled Network Brokerage Planning Implementation Financials Evaluation

Skilled Networking Brokerage Nettle et al 2008 Business Demand Community Engagement Government Funding

Public Finance Implications Program Policy Budget

Positive Program Implications Capability Approach –responding to classic problems for HD job seekers has produced strong results Participants - very positive about support Research concludes support needs to be before, during and after program Importance of small teams and specialized staff Employers Positive Place and train

Program Negatives Comparatively high cost per outcome –$10K for dairy … Perennial issue of Productivity Discount (PD) –incurred by Job Seekers and Business PD estimated at 25% below comparable market businesses

Policy Implications Scaling up of these LOS, SE,ILMs warranted Do have direct relevance to Australia –dealing with ageing population and –relatively low unemployment Australia has performed relatively well –compared with Europe and America –in terms of unemployment and growth (5% cf 9%plus)

Policy Implications (2) costs/benefits $1:$14 AUD Return On Investment (ROI) for Intermediate Labour Market programs Mestan and Scutella 2007

Budget Implications of Up scaling Annual unemployment benefits payments –for 10,000 Long term Unemployed –$150M AUD annually (approximately ) Hypothecation of benefit into LOS/ILM/SE –could be fostered with accredited agencies –eg local government, larger businesses, community agencies.

Budget Implications of Up scaling (2) Assuming 50% success (BSL closer to 2/3), –would achieve annual savings of $75m on job support outlays and job search payments. Would deliver increased income and tax contributions –assuming $1:$4 ROI, ie low end of scale of $300M

Conclusion CEDEFOP 2010 more is needed than program responses alone Perkins 2007 better knowledge of local labour markets and increased employer engagement.

Any questions Please visit the Brotherhood of Laurence next time you visit Melbourne Australie