The privatisation of the employment system is one of the classic examples of failure.
Private employment agencies work well as an opt-in system – you want a job, you go to an agency to help find you one, and if you’re one of the lucky ones, they get you one. It works well for people who are “highly employable”. This system is how I’ve found nearly every job I’ve had, for example.
But it doesn’t work for a lot of people. If you are not “highly employable” – that is, if you don’t have any particularly in-demand skills, and are applying for so-called ‘unskilled labour’ jobs – the private system is full of holes. In particular, they have no incentive to do a lot of work to find candidates a job. They have incentive to do some work – they get paid – but there is no penalty for not finding a job. It’s built on an underlying assumption of “full employment” – that there is a job available for anyone who wants one, and thus the only reason for not finding a job is due to some failure on the part of the job seeker.
The thing is – that’s just not the case. Well before this so-called “COVID recession”, we were experiencing the “jobless recovery” from the GFC (which, BTW, we never recovered from). Headline unemployment was “low” at ~5% give-or-take – which is the goal that the Coalition. They don’t want unemployment really low, because it puts pressure on wages, and they see the ultra-low wage growth of the last few years as a good thing. But there were still plenty more applicants than jobs – about 8 in most cities, up to 30 in rural area or amongst youths. It was quite possible to be an active job seeker, willing to take on any reasonable job, and not be able to find work – the jobs weren’t there.
The private employment services responded to this the way any for-profit business would: they placed people to jobs if the jobs were available, and that was it. Yes, they would try and find more employers – but it wasn’t looking for a job for you. You’d just go into the bucket (or, if you were lucky, into a queue), and if your name was drawn out, you’d be sent off for an interview (again, one of many for the job), and then you’d roll the dice to see if you got that job. If you didn’t, back in the bucket you went.
Furthermore, once you’ve gone through that process a few times, you’re now costing the service provider more than they will make from you. So you get moved from the bucket of “employable types” and over to the bucket of “unemployable types”. You won’t get as many interviews, and even when you’re sent on the, the employer knows that you’re in the unemployable bucket, and you’ll get a pro-forma interview and circular filed afterwards. There’s just no incentive to find work for people who, through bad luck, end up in this category.
The simple fact is that there is no penalty for employment agencies to fail to find work for their clients.
The Centerlink system of the 80s and 90s had problems; a centralised system for all unemployed people to go through was inefficient. But it did have a goal on reducing the number of long-term unemployed – a goal that is given lip-service at best these days.
Like many situations where a government service has been outsourced, the failure mode is that the easy, profitable cases are being well-serve, and the loss-making ones are being discarded. But these are people’s lives and livelihoods being discarded.
However, while the myth that anyone who wants a job can get a job remains prevalent, this will continue.
Source: JobSeeker and JobActive are meant to move people off welfare and into work, but COVID-19 has changed things – ABC News