A REVISION OF SKILLING WA A WORKFORCE DEVELOPMENT PLAN FOR WESTERN AUSTRALIA

Transcription

1 Planning and Coordination_ D A REVISION OF SKILLING WA A WORKFORCE DEVELOPMENT PLAN FOR WESTERN AUSTRALIA Participation in the Western Australian workforce Discussion Paper 1

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3 Table of Contents STRATEGIC GOAL INTRODUCTION... 1 OVERVIEW OF SKILLING WA... 1 Strategic goal Strategic goal Strategic goal Strategic goal Strategic goal SKILLING WA EVALUATION... 2 PROGRESS REPORTING... 2 THE NEED FOR CHANGE... 3 THE REVISION OF SKILLING WA... 3 Stage one... 3 Stage two... 3 Stage three... 3 Timeframe for delivery... 3 PARTICIPATION IN THE WESTERN AUSTRALIAN WORKFORCE... 4 BACKGROUND... 4 LABOUR MARKET TRENDS... 4 Unemployment rate... 5 Employment... 5 Participation... 5 WORKFORCE PARTICIPATION... 6 Figure 1: Labour force participation rate Western Australia and Australia... 6 UNEMPLOYMENT, UNDER EMPLOYMENT AND UNDERUTILISATION... 7 Unemployment... 7 Underutilisation... 7 Underemployment... 7 Figure 2: Unemployment, underutilisation and underemployment rates... 8 LABOUR FORCE PARTICIPATION GLOBAL COMPARISON... 9 Figure 3: Labour force participation selected OECD countries (2011)... 9 The ageing population Figure 4: Western Australia historical and forecast population growth rates REGIONAL WORKFORCE PARTICIPATION Figure 5: Regional labour force participation rate Western Australia TRENDS FOR UNDER REPRESENTED GROUPS... 12

4 Qualifications, language, literacy and numeracy Women in the workforce Figure 6: Labour force participation rate by age and gender Western Australia Mature age participation Figure 7: Labour force participation for mature aged workers Workplace flexibility Disability Youth Indigenous Western Australians Indigenous employment Indigenous workforce participation Occupations Indigenous employment by industry sector Barriers to employment Qualifications Figure 8: Qualification levels Education attainment Figure 9: Comparison of Indigenous attainment by jurisdiction Indigenous participation initiatives Health Aboriginal workforce development Multicultural Western Australia SUMMARY... 24

5 NOTE The Australian Government, the Australian Bureau of Statistics (ABS) and some research documents referenced in this discussion paper use the term Indigenous as a collective term to include persons who identify themselves as Aboriginal or Torres Strait Islanders. After consultation with the State s Aboriginal community1, the Western Australian State Government has elected to use the term Aboriginal as this more accurately reflects the identity of Aboriginal people in Western Australia. Similarly the term workforce or labour force appears to be used interchangeably by different jurisdictions. For consistency, the term workforce is used unless the Australian Government, the ABS or research documents referenced in this document have used the term labour force. The census is a comprehensive study of the Australian community conducted by the ABS every 5 years. It aims to include every Australian in the survey. The census is a detailed snapshot of a point in time. Labour force statistics published monthly and quarterly by the ABS are compiled by surveying of representative sample and extrapolate the resulting data into national and state based figures. The margin of error is greater when using this methodology to calculate data and can result in data irregularities if compared with the census. Further information is available from the ABS2. The Organisation for Economic Co-operation and Development (OECD) labour force participation comparisons differ from those published by the ABS. The OECD defines mature aged workers as 50+. However, the ABS statistical material is generated by decade from a starting point of age 15. Therefore ABS data used in this discussion paper conforms with the ABS classification and quantifies mature age as Hon Peter Collier MLC, Name change to fit Aboriginal identity 10/4/13, viewed 6 June ABS Factsheet, Differences between the LFS and the Census, viewed 6 June 2013,

6 STRATEGIC GOAL 1 Increase participation in the workforce particularly among the under-employed and disengaged, mature aged workers, Aboriginal and Torres Strait Islander and other under-represented groups. INTRODUCTION This discussion paper is one in a series of six papers that will form the basis for consultation as part of the revision of Skilling WA A workforce development plan for Western Australia (Skilling WA). There is a background paper on the Western Australian economy and labour market and discussion papers which relate to Skilling WA s five strategic goals: Participation in the Western Australian workforce; Skilled Migration A Western Australian perspective; Attracting and retaining a skilled workforce; Education and Training; and Planning and Coordination. The focus of these papers is to identify the issues which impact on workforce development in Western Australia. These papers are further intended to generate discussion on the policies, strategies and actions required to address these issues. In particular, the focus of this discussion paper is on those issues which impact on Skilling WA s strategic goal 1 regarding increasing participation in Western Australia s workforce, especially by those from under-represented groups. Further information on industry and regional specific workforce development issues and recommended responses are contained in the State s Training Councils Industry Workforce Development Plans and Regional Workforce Development Plans (see OVERVIEW OF SKILLING WA The Western Australian Government established the Department of Training and Workforce Development (the Department) in November The role of the Department is to support the State s sustained economic expansion by leading and coordinating workforce development strategies and driving a responsive, flexible training system within a State and national framework. At this time, it was acknowledged that to do this, a comprehensive workforce development plan was required to support the growing demand for skilled labour in an economic environment where demand was significantly outstripping supply. This period of high demand coincided with a time of high workforce participation, low unemployment and diminishing access to traditional sources of labour. Consequently strategies to plan for the State s future workforce needs were required. In collaboration with major stakeholders, (including government agencies; industry; enterprises; and non-government organisations), the Department developed the State s first comprehensive workforce planning and development framework. The resulting Skilling WA was released in December It is the State government response to workforce planning and development challenges in Western Australia and sets out a suite of strategies designed to build, attract and retain a skilled workforce. 1

7 The Skilling WA framework has five strategic goals which are underpinned by 11 strategies and 68 priority actions. Strategic goal 1 Increase participation in the workforce particularly among the under-employed and disengaged, mature-aged workers, Aboriginal and Torres Strait Islander and other under-represented groups. Strategic goal 2 Supplement the Western Australian workforce with skilled migrants to fill employment vacancies unable to be filled by the local workforce and address those factors which support a growing population. Strategic goal 3 Attract workers with the right skills to the Western Australian workforce and retain them by offering access to rewarding employment and a diverse and vibrant community and environment to live in. Strategic goal 4 Provide flexible, responsive and innovative education and training which enables people to develop and utilise the skills necessary for them to realise their potential and contribute to Western Australia s prosperity. Strategic goal 5 Plan and coordinate a strategic State Government response to workforce development issues in Western Australia. SKILLING WA EVALUATION In mid 2012, the Department commissioned an independent evaluation of Skilling WA s five goals. The evaluation focussed on the Skilling WA planning framework, its components, implementation and interaction with the plans stakeholders. The evaluation report was positive, providing support for the State s workforce planning and development framework including reinforcing the focus of the State on the Plan s five goals. It reported that Skilling WA had given direction to the issue of workforce planning and development and outlined what the government wanted to achieve in addressing the issues. Future evaluations will continue to monitor the Skilling WA framework. PROGRESS REPORTING Since 2010, Skilling WA has been regularly reviewed. In 2012, the Department examined each of the 68 priority actions aligned to Skilling WA s five strategic goals. The information gathered during this process informed the development of Skilling WA s annual progress report which was published in December The report outlined the significant progress that has been made in the implementation of Skilling WA s priority actions and five goals, with all of Skilling WA s priority actions now in progress, embedded in Government processes or completed. 2

8 THE NEED FOR CHANGE Since 2010, the economic environment has changed and although Western Australia continues to experience the benefits of sustained growth, the State s economy is experiencing significant structural adjustment. As a result the State must respond to the changing employment profile and position itself to meet the developing labour market challenges. It is therefore timely to undertake a revision of Skilling WA to ensure the plan remains relevant and sharply focussed on current state workforce planning and development issues. THE REVISION OF SKILLING WA Broadly, the revision of Skilling WA will consist of a process during that incorporates the following three stages. Stage one Public release of a discussion paper which outlines the known workforce development issues facing Western Australian employers. This paper will be used as the basis for further consultation. Consultations with relevant stakeholder groups in the form of workshops, forums and meetings. Stakeholder Groups include: o Small to Medium Sized Enterprises; o Non-Government Organisations and Not for profit organisations; o Major Employers; o Industry Associations, Unions; o Training Councils and the State Training Board; o Training Providers; and o Regional Alliances. People that are unable to participate in the forums are encouraged to download the relevant discussion papers from the Department s website and provide a written submission to inform the preparation of an issues paper. Responses can be uploaded at and will be accepted until Friday 2 August The intelligence gathered from the consultation process will identify the key issues, stakeholder views, and the strategies the State should consider to address these issues. Stage two Consultations with government agencies, industry and the community on how these strategies could be implemented. Stage three Preparation of the new edition of Skilling WA. Timeframe for delivery The consultations for the next edition of Skilling WA will continue through 2013, with the release of the final plan expected in mid

9 PARTICIPATION IN THE WESTERN AUSTRALIAN WORKFORCE BACKGROUND Increasing workforce participation is a major challenge for Western Australia in an economic environment where labour demand continues to outstrip supply. As traditional sources of labour become increasingly difficult to access, increasing workforce participation levels amongst under-represented sections of the population is essential in addressing the State s long term labour needs. Many of the under-represented groups face unique challenges or barriers to employment. This will require a tailored approach to assist them to be job ready and prepared to enter the workforce. There are tangible benefits from removing the barriers to workforce participation for under-represented groups, including increased productivity, the financial independence and psychological benefits (self-esteem and inclusiveness) generated through employment and reduced dependency on welfare payments. The Australian Workforce and Productivity Agency 3 (AWPA) 2013 report Future focus; A National Workforce Development Strategy 4 suggests that in order to build prosperity and share it widely, it is important to focus on those people who have been left out of the workforce or who are being churned between work and unemployment. It is recognised that people who are under-employed or disengaged from the workforce are more likely to engage if barriers to their participation are addressed. Skilling WA 5 was published in December 2010 identified the ageing workforce, ongoing labour shortages and low workforce participation rates in specific sectors as key workforce development issues. Although all the priority actions associated with Skilling WA s Strategic Goal 1 have been progressed, 6 increasing participation rates in under-represented groups continues to be a challenge. This paper will explore current trends in participation and examine the issues which act as barriers to people entering or remaining in the workforce. LABOUR MARKET TRENDS When Skilling WA was first released, the Western Australian economy was characterised as being in a recovery phase, which followed the downturn precipitated by the global financial crisis (GFC). Since then, historically low interest rates and fiscal stimulus measures have supported recovery with demand for skilled workers in the State remaining strong since In recent years, growth in the State s economy has largely been driven by business investment and the strength of the resource sector. However, while parts of the State s economy linked to the resources sector have done well, conditions in other sections of the economy have been mixed. 3 Australian Workforce and Productivity Agency 4 Australian Workforce and Productivity Agency 2010, Australian Workforce Futures Future focus: A National Workforce Development Strategy. 5 Skilling WA A workforce development plan for Western Australia, 6 Skilling WA progress report June 2012, 4

10 Factors such as the high Australian dollar, greater fiscal conservatism by households, a soft local housing market and a relaxing of post-gfc stimulus measures have impacted on industries that rely on discretionary spending. Even so, Western Australia s overall labour market has remained tight over the past two years, with continuing low unemployment and a high workforce participation rate. Unemployment rate The State s average unemployment rate of 4.1% over the past two years (March 2011 March 2013), was the lowest of all the states. The rate was also considerably lower than the State s long term historical average unemployment rate (of 5.8% calculated over the past two decades). Notwithstanding the strong performance of the Western Australian labour market over the past two years, there are some indicators that the economic and labour market outlook for the short to medium term is softening. Western Australia s unemployment rate for April 2013 was 5.2%. While this is an increase on the previous period, it is still the lowest of all states and below the national average (5.5%). Employment Similarly, over the past two years, the employment growth rate for Western Australia (7.6%) has surpassed that of the rest of Australia (1.9%). This translates into an increase in Western Australia s employment levels by some persons. During this time full time jobs growth has been strong, accounting for approximately 87% of the State s total employment growth. This growth was experienced across many of the State s industries including: 30% growth in the mining sector; 24% growth in the health care and social assistance sector; 12% growth in the retail trade sector; 11% growth in the professional, scientific and technical services sector; and 10% growth in the administrative and support services sector. During the same two year period, the construction, agriculture, forestry and fishing industries all recorded a decrease in employment. Participation Western Australia s workforce participation rate stood at 68.3% in April increasing to 68.9% by April The State s participation rate remains the highest of all states, well above the national rate of 65.3%. From a high of 69.4% in September 2008, Western Australia continues to track close to the AWPA 8 target participation rate of 69%. During this two year period, the construction, agriculture, forestry and fishing industries all recorded a decrease in employment. 7 ABS Cat. No State and Territory Statistical Indicators, Australian Workforce and Productivity Agency 5

11 WORKFORCE PARTICIPATION Figure 1 provides a comparison of workforce participation rates in Western Australia and Australia for the past decade. Western Australia s workforce participation rate has consistently outperformed the national trend over this period with the State s participation rate remaining resilient to fluctuating economic conditions. Figure 1: Labour force participation rate Western Australia and Australia Source: ABS, Labour Force Survey From 2003 to 2008 the State experienced a period of sustained economic growth and the workforce participation trajectory trended upwards. A consequence of this growth was upward pressure on wages which impacted on the availability of labour in the non-mining sector (the so called crowding out effect) and increasing inflationary pressures. However, higher wages also influence the State s workforce participation rate as persons previously not engaged in actively seeking work are motivated to join or rejoin the workforce. Post-GFC and into the economic recovery phase, Western Australia experienced an adjustment when the workforce participation rate dropped from 69% to 67.5%. However, even with this decrease the State s participation rate remains the highest of all states and well above the national rate of 65.3%, and just marginally below the 69% target set by the Australian Workforce and Productivity Agency (AWPA). 6

12 UNEMPLOYMENT, UNDER EMPLOYMENT AND UNDERUTILISATION Unemployment Western Australia s unemployment rate reduced from 7.4% in June 2001 to 2.7% in September By July 2009 (post GFC) the rate has risen to 5.5% in July 2009, reducing to 4.3% in July Recent unemployment trends show that while the State s unemployment rate has typically moved between the 4% to 5% range since 2010, this is higher than during the very tight labour market conditions the State experienced from around 2006 to 2008 prior to the GFC-induced economic downturn. In April 2013, Western Australia s unemployment rate increased to 5.2%, the first time it exceeded the 4 to 5% range since April Underutilisation While the unemployment rate is the most widely used indicator of labour availability, the labour underutilisation rate provides a broader indication of the spare capacity in the labour market. The labour underutilisation rate is comprised of the: unemployment rate; and under-employment rate, which is comprised of o people who are part-time workers who are willing and available to work more hours; and o people who are willing and available to work but have become discouraged and stopped looking for work. Western Australia recorded an average underutilisation rate of 9.9% over 2012, which was the lowest of all the states. This indicates a relatively low level of spare capacity when compared to the long term average of 12.2% over the past twenty years. Underemployment The latest ABS data shows that there were approximately under-employed workers in Western Australia in February This equates to an underemployment rate of 5.6%. Although underemployed workers make up a small proportion of employed people, the underemployment rate has been increasing over the last 30 years (see Figure 2). Unlike the unemployment rate, which rises and falls with the business cycle, historically the underemployment rate has tended to rise in economic downturns but not recover as quickly when the economy begins to improve. Apart from economic conditions, factors which influence why people are underemployed include: age - young people typically have part time jobs and are one of the groups most affected by underemployment or unemployment; the skills and experience of older workers are sometimes unrecognised or undervalued; 9 ABS Cat. No Labour Force, Australia, Jun

13 education and training - unskilled and persons with no post-school qualifications; family responsibilities, 8% of women identified family responsibilities as a barrier to employment compared with 2% of men; and lack of skills or experience the unemployment rate for persons aged is 17% compared with 8% for year olds. While under-employment is not as potentially damaging to workers as unemployment, it can have long-term consequences for career progression, earnings potential and retirement income. The Organisation for Economic Co-operation and Development s (OECD) Employment Outlook noted this was of particular concern for under-employed women, who already experience lower earnings and retirement income than men. Figure 2: Unemployment, underutilisation and underemployment rates Source: ABS Prior to the onset of the GFC, the ABS underutilisation rate for Western Australia was 7.0% in February As at February 2013, the rate stood at 10.2%. 10 OECD Employment Outlook, viewed 6 June 2013, 8

14 LABOUR FORCE PARTICIPATION GLOBAL COMPARISON The OECD prepares a comparison of labour force participation with other OECD countries. As can be seen from Figure 3, Australia compares reasonably well against other OECD countries and is well above the OECD average. Notwithstanding this, when compared to countries such as Iceland and Switzerland, there is scope for Western Australia (and Australia) to improve its participation rate. Figure 3: Labour force participation selected OECD countries (2011) Figure 3: Labour Force Participation Rates, selected OECD countries (2011) OECD countries 73.4 Iceland 88.7 Switzerland 85.3 Sweden New Zealand Japan Denmark Norway Canada Netherlands Australia United Kingdom Germany Portugal United States Austria Finland Slovenia Czech Republic Participation Rate (%) Source: Prepared by the Department of Training and Workforce Development using OECD statistics It should be noted that OECD labour force numbers incorporate persons aged 15 to 64 rather than the Australian standard of 15 years plus. Furthermore, unlike Australia the United Kingdom and Sweden include defence force personnel in their labour force figures. The Productivity Commission paper Workforce Participation Rates - How Does Australia Compare? (2006) 11 noted significant differences across the OECD in statistical practices and therefore impairs the comparability of published data. The paper raised the question about the extent to which differences in published participation rates are real as opposed to reflecting different statistical practices across countries. Closer analysis of published OECD data in the Productivity Commission paper notes there are seven main sources of data discrepancies reflecting the treatment of: seasonality in labour force data; defence personal; institutionalised populations; missing data for some age brackets; definitions of unemployment; and temporary residents. 11 Productivity Commission paper Workforce Participation Rates - How Does Australia Compare? (2006), viewed 6 June

15 With this in mind, due care should be taken in comparing OECD statistics with those generated through the ABS. The ageing population The predicted fall in population for persons between the ages of as a percentage of total population depicted in Figure 4, is expected to limit the State s ability to meet future labour demand. This is a critical element to be considered in planning for the State s labour supply in coming years. The extent of this labour constraint is evident from the State Government s projections in the Treasury Mid-Year Review 12 (published December 2012) which show that: population growth is expected to slow to an annual average rate of 2.2% by , down from the peak rate of 3.4% that was recorded in ; growth in the State s core working age population (those aged 15 64) is expected to slow even further, moderating to a rate of only 1.8% by Figure 4: Western Australia historical and forecast population growth rates Source: ABS Cat for historical; forecasts -WA Treasury for projections This represents an almost halving of the growth rate for the State s core working age population in just over seven years. As the gap between the total population and the working age population increases, Australia along with other developed countries will face increased global competition for workers. New strategies for increasing workforce participation and the continued use of migration will be required to meet demand. 12 Department of Treasury (WA) Government Mid year Financial Projections Statement December 2013, viewed 6 June 2013, 10

16 REGIONAL WORKFORCE PARTICIPATION Figure 5 shows labour force participation rates for regional Western Australia and Perth. On average in 2012 the participation rate in regional Western Australia was around 57.5% compared to 69.8% in Perth, a difference of around 12 percentage points. It is important to note that the regional Western Australian workforce participation rate peaked at 62.3% in March 2009 and was only 7.6 percentage points below the Perth participation rate of 69.9% at the time. Therefore there is scope to narrow the gap between the Perth and regional Western Australian workforce participation rates. Figure 5: Regional labour force participation rate Western Australia % 75.0 Perth Regional Western Australia Jan-2006 Jan-2007 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012 Jan-2013 Source: ABS Cat Barriers to employment in regional areas are diverse and vary from one region to another. Regional Workforce Development Plans (available from dtwd.wa.gov.au) identify a number of issues that impact on the workforce participation rate in regional Western Australia. These include: skills mismatch between local job opportunities and the available workforce; perceptions of unattractive working conditions in some industries eg hospitality, tourism and agriculture; concerns relating to the loss of social housing if full time employment is secured and subsequent breaching of the social housing income threshold; lack of affordable childcare facilities in regional Western Australia is a barrier to women with children re-entering workforce; regional areas with a high percentage of retirees (compared with metropolitan Perth) reduces the availability of workers. Some regions that are not self sufficient in terms of access to appropriately skilled workers utilise Fly In Fly Out (FIFO) or Drive in Drive Out (DIDO) as a method of managing their workforce requirements. This is especially true for the resource rich North West regions of the State where major projects require sequenced access to large numbers of trades personnel during the construction of the project. Large extraction operations in very remote areas of the state also heavily rely on FIFO workers. 11

17 In recent periods of labour shortages, operators that use FIFO or DIDO have targeted other regional areas as a source of skilled labour. This has been beneficial to parts of the agricultural sector in times of hardship where resident FIFO workers income has helped to maintain the availability of services in the regions. The downside of using FIFO is the increase of crowding out or loss of skills from the targeted regional towns. This happens when workers take FIFO jobs and their regional employers are unable to recruit replacement staff, as they are unable to offer comparable wages. Cost of living, housing affordability and access to services and amenities are issues when organisations wish to permanently attract workers to the region. This is principally true for lower paid occupations such as retail, tourism, personal services and customer service roles. TRENDS FOR UNDER REPRESENTED GROUPS In addition to those persons underutilised in the labour market another potential source of labour supply comes from persons who are not in the workforce and face unique barriers to gaining employment. This group is extremely diverse and includes: persons with limited language, literacy and numeracy skills; persons with dependents or wishing to return to work after a significant absence from the workforce ; persons living with a disability or chronic illness; young (limited work experience) or mature age persons (retirees or retrenched); Aboriginal or Torres Strait Islanders; persons from culturally and linguistically diverse (CaLD) backgrounds; and persons who have been out of the workforce for a significant time (the long-term unemployed) and who are disengaged. Barriers to entering the workforce for these groups vary widely. They have an assortment of needs and require different levels of support and services to become work ready. Qualifications, language, literacy and numeracy Foundation skills (language, literacy, numeracy and employability skills) underpin workforce participation, productivity and social inclusion. People with higher language, literacy and numeracy skills are more likely to be employed and engage in further training 13. Employability skills are crucial for people to gain employment and remain employed 14. Raising the levels of language, literacy and numeracy has been identified as a national priority for skills and workforce development. As outlined in the National Foundation Skills Strategy, the Commonwealth and state and territory governments have agreed that increasing the number of working age Australians who have a minimum agreed level of literacy and numeracy skills will be a priority. 13 Skills Australia (2010) Australian Workforce Future, viewed 6 June 2013, 14 Standing Council on Tertiary Education Skills & Employment (SCOTESE) National Foundation Skills Strategy for Adults September 2012, viewed 6 June 2013, 12

18 The Adult Literacy and Life Skills Survey (ALLS) survey 15 found statistical links between improved foundation skills and employment outcomes. Most significantly, improving literacy and numeracy skills from Level 1 to Level 3 on the ALLS scale increases the likelihood of labour force participation by about 15 percentage points for women and about five percentage points for men and increases hourly wage rates by about 25 % for women and 30% for men. The advantages of strong foundation skills development for employment outcomes continue through to the higher levels of skills development, with the ALLS survey showing that 76.5% of people in the highest quintile for gross weekly income have literacy skills at Level 3 or above. International studies have shown that employment returns to Indigenous people from LLN training are even higher than those for non-indigenous people. The positive correlation between language, literacy and numeracy skills and employment is similarly found between educational attainment and workforce participation. Research by the Australian Treasury on the participation rates of people across a range of educational attainment cohorts found that participation in the labour force increased with the attainment of higher level qualifications 16. Women in the workforce The Australian Workforce Productivity Agency (AWPA) Future Focus discussion paper noted that although women are increasingly highly educated there remains a large gap between male and female workforce participation. As the traditional primary care givers, women with young children, aged parents or those who care for a family member with a disability may have the capacity to undertake some paid work, but find it difficult to access work with the required level of flexibility. According to the ABS 17 in September 2012 there were females in Western Australia who were not in the workforce because they were caring for children, or wanted to work but were not actively looking for work. Figure 6 depicts the 2011 Census chart of the Western Australian labour force by age and gender. This group is not counted as unemployed or under-employed because they are not actively seeking work. For this group barriers to entering the workforce include skills obsolescence and the high cost of childcare. Estimates show that a 10% increase in the price of childcare reduces the female workforce participation rate by around 0.5% for sole parents and 0.2% for married women ABS Cat. No Programme for the International Assessment of Adult Competencies, Australia, Kennedy, S, Stoney, N. & Vance, L, Labour force participation and the influence of educational attainment, Australian Treasury, viewed 3 June 2013, 17 ABS Cat. No Persons Not in the Labour Force 18 Doiron, D & Kalb, G 2004, Demands for Childcare and Household Labour Supply in Australia, Melbourne Institute Working Paper No. 6/04 13

19 Figure 6: Labour force participation rate by age and gender Western Australia 90 % Persons Male Female >85 years Source: ABS, 2011 Population Census According to AWPA 19 prolonged periods away from the workforce often result in skills obsolescence. Workplaces can benefit from retaining women after maternity leave if they offer options such as flexible work hours, job-sharing and working from home arrangements. It is suggested that for both males and females, increased participation in nontraditional occupations in growth industries could offer potential benefits. For example, encouraging males into female dominated industries such as aged care and increasing the participation of females in the mining industry 20. Mature age participation The ABS projections anticipate that by 2050, the number of Australians aged 50 and over will have increased by over 80%. In comparison, the number of persons aged 18 to 49 is projected to grow by just over 35% by While this important demographic change implies a greater role for mature age Australians both economically and in society more generally, the projections are for population growth and do not necessarily translate into workforce participation. Figure 7 demonstrates the trend for labour force participation in Western Australia since October 1997 where mature age workforce participation continued to trend up but remained below 60%. Unemployment figures trend downwards until the GFC where the figures rise till mid Australian Workforce and Productivity Agency, 2010 Australian Workforce Futures 20 Australian Workforce and Productivity Agency, 2010 Australian Workforce Futures 14

20 Figure 7: Labour force participation for mature aged workers The Reserve Bank of Australia s Statement on Monetary Policy February contends the decline in employment during the global financial crisis coincided with large falls in the value of personal assets, which prompted a pick-up in the participation rate of older workers. It is probable some of these workers deferred retirement for economic reasons. Since the beginning of 2011 the trend shows the participation of older workers has slowed, possibly reflecting the retirement of some of those individuals who chose to defer retirement or re-enter the workforce in The Australian Government tasked the Consultative Forum on Mature Age Participation to provide advice on practical solutions to address the barriers to workforce participation of older Australians. Published in 2012, the report Barriers to mature age employment: final report of the Consultative Forum on Mature Age Participation 22 noted: Older workers and job seekers are not a homogeneous group and many factors may influence their ability to obtain/retain suitable work, particularly in the last years of working life. The barriers people face can be grouped into: personal barriers (that will be specific to each individual) and structural barriers (that affect whole groups). 21 Reserve Bank of Australia Statement on Monetary Policy-February 2013,viewed June National Seniors Australia (2012) Barriers to mature age employment: final report of the Consultative Forum on Mature Age Participation 15

21 Structural barriers may exist at the: systemic level e.g. age discrimination, legislative impediments (e.g. workers compensation, superannuation), work design and structures industry level (industries undergoing major structural changes) enterprise level (individual organisation or work units facing structural changes). An individual may, of course, be affected by both personal barriers and structural barriers. The following categories, noted in the report as structural and personal barriers to mature age employment, may also be the basis for discrimination: age; care-giving responsibilities; flexibility of employment arrangements; issues around private recruitment firm practices; job search assistance; leisure time trade-off; mental health barriers; mismatch of skills and experience with industry demands; physical illness, injury and disability; re-entry barriers for the very long-term unemployed; re-training and up-skilling barriers; superannuation; tax transfer system; and workplace barriers. The report noted that in some instances, opportunities are lost when mature aged workers are under-valued by employers. There are collective benefits from implementing flexibility in working arrangements and supporting phased retirement or transitioning from a full-time career to part-time work. In addition to regular duties, mature aged workers can make a significant contribution to the modern workplace through participation in coaching or mentoring programs where years of corporate knowledge and practical experience can be shared. A barrier to mature age workforce participation was removed when the Western Australian Government introduced reforms to the Workers Compensation and Injury Management Act The Act discriminated against older workers by limiting the entitlement of injured workers aged 64 or more to only one year of income payments. Through the reforms, all workers now enjoy the same entitlements to compensation regardless of their age. The Workers Compensation and Injury Management Amendment Act 2011 came into force in August

22 Workplace flexibility An example of the benefits of workplace flexibility was published in the Australian Financial Review 23 in June It was reported that goldminer Newmont Asia Pacific operating in Boddington, south-east of Perth, had recruited and trained women from the local community as a productivity measure. Aimed at mature aged women or women with school age children, the shift runs from 11.30am to 3.30pm and maintains production by keeping the equipment going when full-time equipment operators take rest or meal breaks. The arrangement provides an employment opportunity for those making the transition to retirement or those who want to pick the kids up from school. Under the scheme, senior workers still qualify for WA s Seniors Card as the four hours/four days a week schedule meets the eligibility requirements. Disability According to the Productivity Commission s Review of the Disability Discrimination Act , disability is often associated with adverse labour market outcomes for the individual. This is related to a number of factors, including discrimination, the added costs of participation, actual or perceived working capacity and poorer education outcomes. People living with a disability are less likely to enjoy the benefits of paid employment. According to the 2011 Census, the workforce participation rate of persons with a disability was only 10.5%. This represents a marginal increase of 0.5 percentage points between the census conducted in 2006 and Despite attempts by governments to engage people with disabilities in paid work, the workforce participation rate has changed little since 1993, whereas the participation rate of people without disabilities has risen considerably. Mission Australia, a non-denominational service organisation, argue in their position statement Workforce participation for People with Disability 25, that stigma and misconceptions about hiring people with disability persist, despite the introduction of legislative instruments such as the Disability Discrimination Act 1992, Discrimination and Other Human Rights Legislation Amendment Act 2009 and the Fair Work Act Identifying persistently low rates of employment for people with disability as a reason for targeted intervention, Mission Australia contends that such an intervention would also address the underutilisation rate for persons with a disability, a core challenge for the economy associated with the ageing population. A recent study 26 published by the National Centre for Vocational Education Research (NCVER) found that for people with a disability who are out of work or in part-time employment, completing a Vocational Education and Training (VET) qualification significantly improves the chances of getting a full-time job, compared to those with no post-school qualifications. 23 Australian Financial Review June 2012, viewed 6 June 2013, 24 Productivity Commission 2004, Review of the Disability Discrimination Act 1992, Productivity Commission Inquiry Report, Melbourne. 25 Mission Australia Workforce Participation position statement 2013, viewed 6 June 2013, 26 Polidano, C & Vu, H 2011 To gain, retain and retrain: the role of post-school education for people with a disability, NCVER. 17

23 Consistent with the findings from Polidano and Mavromaras (2010), NCVER find that the strongest labour market benefit from completing a VET course for people with a disability is in shifting those who are out of work into employment. It is estimated that for those with a disability who are out of work, completing a VET course increases their chances of being in employment by 16 percentage points in the first year out and by 20 percentage points by the third year. Youth The State s youth unemployment rate 27 averaged 17.4% over the 12 months to March This is lower than the equivalent rates in all other states which all have annual rates of 24% or higher. The effects of youth unemployment on the individual are significant and can persist for years for those who transition from school without a job. This group is more likely to earn lower wages and experience joblessness again in later life. Economic loss for the young unemployed may also be substantial, as they tend to miss out on basic training and the accumulation of experience and skills that typically occur in the early years of employment. Lack of experience, low skills and the lack of a work track record all impact on a person s ability to secure paid employment. The National Partnership Agreement on Youth Attainment and Transitions aims to improve participation and attainment in education and training by young people. The key targets are to increase the participation by people aged in education or training and to increase the Year 12 or equivalent attainment by people aged These targets encourage Australian jurisdictions to move towards the Partnership s key objectives of a national Year 12 or equivalent attainment rate of 90% by 2015 and the provision of an education or training entitlement to people aged between 15 and 24. VET in Schools programs can play an important role in helping young people transition from learning to employment 28. These programs enable students to achieve nationally recognised VET qualifications while completing their Western Australian Certificate of Education (WACE). They provide students with the opportunity to explore future career choices, achieve secondary graduation, begin their careers while at school and assist with their transition to further education, training or employment. Indigenous Western Australians The most comprehensive labour market data available for Indigenous 29 people in Western Australia comes from the 2011 Census. The census estimates there to be approximately Indigenous persons resident in the State. This equates to 13.2% of the Australian Indigenous population and 3.8% of the total Western Australian population. Overall, the Indigenous population demographic is significantly different than the non-indigenous population Youth unemployment rate for those unemployed youth aged 15-19, who are actively seeking full-time work. 28 Australian Workforce and Productivity Agency (2013). op cit. 29 Includes Aboriginal and Torres Strait Islanders. 30 ABS (2012) Australian demographic statistics, March quarter

24 In 2011, more than one-third of Indigenous people were aged less than 15 years, compared with one-fifth of non-indigenous people. Conversely, almost 4% of Indigenous people were aged 65 years or over, compared with 14% of non- Indigenous persons. Indigenous employment The 2011 Census reported that there were approximately Indigenous persons aged 15 years and over in Western Australia, representing 2.5% of the same age cohort for the whole of the State. The 2011 Census also estimated there to be Indigenous persons employed in Western Australia in 2011, comprising 1.6% of total employment in the State. Approximately Indigenous persons were estimated to be unemployed in Western Australia during the Census, representing an unemployment rate of 17.8% (compared to an average unemployment rate of 4.7% for Western Australia s total workforce at Census). This is an increase from the 2006 Census, where Indigenous unemployment was reported at 14.0% Indigenous workforce participation At the 2011 Census, the Indigenous workforce participation rate was reported at 46.3%, 31 down from 52.8% 32 at the 2006 Census. The workforce participation rate for the total Western Australian population at the 2011 Census was reported at 64% 33. Occupations In terms of occupations, the 2011 Census indicates 17.7% of Indigenous employees were employed as labourers; 15.6% were community and personal service workers; 13.1% were machinery operators and drivers; 13.1% were technicians and trades workers; 13% were employed as professionals; 12.8% were clerical and administrative workers. Participation in health care, social assistance and education roles may be due to having Aboriginality as an essential prerequisite for employment. These roles are suited to Aboriginal persons as they require a high degree of cultural knowledge, sensitivity, the ability to effectively communicate with Aboriginal persons and practical experience of operating within community. Indigenous employment by industry sector On an industry basis, 13.0% of Indigenous employees were employed in the mining sector. Health care and social assistance employed 11.7% with education and training attracting 11.1%. Other important sectors include public administration and safety at 10.7% and the construction industry at 8.8%. Barriers to employment It is well documented that Indigenous Australians are under-represented in the workforce 34, have lower household incomes and have higher unemployment rates 31 ABS 2011 Census of Population and Housing (Western Australia). 32 ABS 2006 Census of Population and Housing (Western Australia). 33 Variation is caused by the use of different methodologies used for data collection for the Census compared with labour force surveys. 34 ABS Census

25 than many other Australians. Clearly, improving employment outcomes for Indigenous persons can also lead to better social and economic wellbeing. Indigenous job-seekers face multiple barriers to workforce participation. These may include limited language, literacy and numeracy skills or lack of work experience or practical training. All of these are closely linked to a person s ability to join the workforce. The 2012 Skilling WA Progress Report acknowledged that a number of industry sectors are actively recruiting Indigenous workers and providing training which improves job readiness and can lead to employment or further training such as an apprenticeship or traineeship. Qualifications As previously discussed, higher levels of education or qualifications, in terms of both years of schooling completed and non-school qualifications, are generally associated with increased employment opportunities. Figure 8 shows the proportion of Aboriginal and non-aboriginal persons who have a qualification at Certificate I level or higher. However, it should be noted that 42.9% of responses from Aboriginal persons and 8% of responses from non-aboriginal persons did not include this information. Figure 8: Qualification levels WA Aboriginal and non-aboriginal by qualification level Aboriginal Non-Aboriginal Postgraduate degree level Graduate diploma and graduate certificate level Bachelor degree level Advanced diploma and diploma Level Certificate nfd Certificate I and II Certificate III & IV Level of education inadequately described Level of education not stated % Source: ABS, 2011 Population Census The majority of Aboriginal persons who reported the possession of qualifications indicated these were at the Certificate III and IV level (28.2%), with 14.4% having a diploma, advanced diploma or bachelor s degree. 20