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‘It’s an ageist policy’: JobMaker slammed amid new data

Lucy Dean
·5-min read
Male and female colleagues planning strategy in meeting. Business professionals discussing around conference table. They are in board room at office.
Image: Getty

The Government’s JobMaker scheme has been slammed as ageist and illogical as new data shows employers could cut older workers in favour for younger, with no penalties.

Treasury modelling released under a Freedom of Information request has revealed that an employer receiving JobMaker could technically replace one older full-time worker on $75,000 a year with three younger part-time employees and end up ahead.

The modelling featured a scenario in which the employer replaced one older worker with three younger workers earning $27,500 - $30,000 a year.

To be eligible for JobMaker, businesses must increase their payroll and their headcount.

In this scenario, the employer has increased their payroll and headcount but has also completely offset that cost through the subsidies.

Ultimately, without paying any extra in wages, the employer has two new employees and has increased hours worked from 40 to 60 hours a week at no extra cost, the ABC reported.

While this particular scenario is reasonably unlikely, there is a more pressing concern, the chief executive of the Councils on the Ageing (COTA) Ian Yates said.

“What we think is the bigger risk is that as people think about new hiring, they won’t look at mature aged workers, and yet older workers are equally as vulnerable as younger workers,” he told Yahoo Finance.

“And to do that, they [employers] don’t need to discriminate in their advertising, they just need to say, ‘We’re looking to employ people who are eligible for JobMaker.’”

Employers around Australia generally aren’t as aware of the $10,000 Restart subsidy targeted at businesses hiring workers 50 and older, further reducing the incentive to take on mature staff, Yates added.

Restart also requires that new hires have been on JobSeeker for six months, while JobMaker requires new hires have been unemployed for at least 28 consecutive days in the last three months.

The result is employment behaviours skew towards hiring young workers, despite the pressing problem of mature-age joblessness, Yates said.

A review of Australia’s retirement income system found that one-in-five Australians between 55 and 64 were receiving either JobSeeker, the Disability Support Pension or the Carer Payment, prior to the pandemic.

The same study found that older employed Australians usually take longer to secure work.

"The high prevalence of involuntary retirement means many Australians retire abruptly and with fewer savings than planned. This runs counter to policies that seek to encourage older workforce participation,” the retirement income review said.

Fewer Australians aged 55 and older also exited JobSeeker between October and November last year than younger people, the Department of Social Services has reported.

“I do not understand the logic of not including [older Australians], because they are just as vulnerable,” Yates said.

“It’s pretty straightforward: why would you not include them? Essentially, it’s a pretty ageist policy.”

It could be bad for business

The policy also risks damaging Australian businesses, director of workforce transition firm Randstad Risesmart Alison Hernandez said.

“Unfortunately the JobMaker hiring credit does actually incentivize hiring only under-35s, so overlooking a large cohort of underemployed older workers,” she said.

“One would hope it’s unlikely that the majority of employers would dilute the knowledge and experience in their business by taking advantage of displacing older workers to replace them with younger workers. One would have to assume that there would be a more strategic approach to talent management.”

Under the ideal scenario, the employment subsidies would not be limited to certain age groups. Businesses would be encouraged to find creative ways to harness the knowledge of older workers while also providing opportunities for younger staff, she said.

“Our research shows that a good percentage of older workers would prefer to work longer, but flexibly and work part-time on their transition to retirement,” she said.

“You can then back-fill that time with younger, emerging talent. That way, you’re leveraging the benefits of a multi-generational workforce.”

Visionary employers realise the power of age diversity at work, she said, however JobMaker sends a message otherwise.

“Certainly there are too many generalisations [about age] unfortunately, and that does perpetuate age discrimination when people place an age lense on talent, rather than an ability lense.

“I am concerned about the message that JobMaker sends to employers. I think they need to think really carefully about all of the hard work they’ve been putting into becoming better employers.”

Older women even more at risk

Women over the age of 45 were the most likely to be on JobSeeker prior to the COVID-19 pandemic, a report from the Parliamentary Budget Office found in September last year.

And while women over 50 made up only 5 per cent of JobSeeker recipients in 2001, by 2019 they made up a staggering 20 per cent. Of those, a third of all women over 55 on JobSeeker have been on the payment for more than five years.

In 2009, that figure was at 13 per cent.

“Beyond life expectancy, on every other measure of economic and social wellbeing, older women experience significant disadvantage compared to men,” a Per Capita report from March 2020 found.

Beyond the employment challenges, the problem extends into retirement balances, Yates said.

Women currently retire with 47 per cent less in super than men.

Hernandez, who is also a gender pay equity ambassador for the government’s Workplace Gender Equality Agency, said the pay gap is perpetuated through a lifetime of inequality in their careers.

“If this is another barrier for older women to get into the workforce, then again we’re perpetuating the pay gap,” she said.

“Employers who are focusing very heavily on gender diversity should also take heed of their opportunity here to do the right thing by older women in the workforce.”

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Image: Yahoo Finance
Image: Yahoo Finance