The JobTrainer program will give school leavers the experience, confidence and aptitude necessary for economic recovery post-coronavirus, says economist Tim Harcourt.
During the Global Financial Crisis (GFC) in 2008, the mantra was to “go early, go hard and go households” with a straight fiscal stimulus package. But now in the middle of a pandemic and stimulus measures implemented by the government to kickstart the economy, the message has been to “act fast, go big and keep the lights on”.
Along with the JobKeeper, Jobseeker and JobMaker programs designed to protect employees, small businesses and the most vulnerable in the economy during this time of public health crisis, we now have JobTrainer to shore up the skills side of the labour market.
The JobTrainer program aims to create more than 340,000 training places in manufacturing, healthcare and trade – areas that are pivotal for economic growth during the pandemic and in the post-COVID-19 recovery phase. The Commonwealth, state and territory governments are providing $1 billion for the JobTrainer program in addition to an extra $1.5 billion towards an apprentice wage subsidy scheme.
The JobTrainer program will provide the opportunity to school leavers to complete short courses in practical areas on a free or low cost basis. The idea is to give young people some experience at a time when COVID-19 has flattened what is already a tough labour market for school leavers.
The Commonwealth government has also announced the formation of the National Skills Commission (NSC) which will make recommendations on the types of jobs that will be needed in the future.
While forecasting of this nature can be problematic (economists talk of ‘hog cycles’, i.e. by the time you skill everyone up, the demand for the jobs are no longer there) – giving young people skills and experience can certainly help with aptitude and confidence, even if they end up working in a related area.
But this sort of planning (it was quaintly called ‘manpower’ planning in World War II) can work as it did in the post-war reconstruction period when Australia built its manufacturing and services industries with large scale immigration.
This time, the NSC will set “target areas” with potential for future job growth in every state. This includes healthcare, transport, postal and warehousing, manufacturing, retail trade and wholesale trade. I would also add clean energy green building and renewables to the list as Australia “puts green back in the green and gold” to rebuild and recover from the bushfires, droughts, floods and COVID-19.
The Commonwealth government will subsidise wages of apprentices and trainees that are currently employed. The subsidy covers half of an apprentice’s wage, up to $7000 a quarter for staff that were employed on 1 July 2020. This adds to the stimulus already offered to employers to keep apprentices and trainees on.
Will it work? The government has got to try. And it’s better to give young people the opportunity to train, gain in experience and build their confidence in a work environment.
Similar to the JobKeeper program, JobTrainer will keep an employee (in this case an apprentice) with an employer while they complete their training. The real issue will be how well can NSC predict the jobs of the future? Will it be better than employers or education institutions? The best solution will probably be to concentrate on skills and competencies so young workers can fit into different roles across a number of industries.
Another recommendation will be for the government to reform the higher education, vocational (TAFE) and professional education sector so there’s a streamlined system of lifelong learning – perhaps combining certificates, short courses, online courses and all the way up to degrees.
The ‘learning economy’ will definitely enable us to upskill and get ready for the post-COVID-19 recovery.
Tim Harcourt is the JW Nevile Fellow in Economics at UNSW Business School and hosts The Airport Economist and The Airport Economist Podcast.