Job Guarantee – A Fair Go and a sound Economy go together

 

Unemployment and the associated poverty and social ill effects include:-

  1. Losing work-skills : employers hire from those already working or unemployed short-term. Prolonged unemployment can lead to an erosion of skills. 
  2. Poverty reduces people’s capacity to buy nutritious food, housing and health care. Unemployment can force families to deny educational opportunities to their children. Affects health – reduced participation in society: financial strain.
  3. Particular parts of the community are more severely affected than others, exacerbating problems of inequality within metropolitan areas and between the cities and some regional areas. Outback Qld circa 13% Youth around 20%..
  4. Young people are particularly adversely affected – large numbers, particularly in rural and remote areas – a dreadful situation for them to be in to face a meaningful future in our society.
  5. Government’s providing derisive and inadequate income support eg Newstart to provide a Budget Surplus!!!!
  6. Drugs, alcohol abuse and crime flourish in a poor, unemployed community.

In Australia at the end of September 2019 there are around 700,000 persons unemployed. A further 1.1 million persons are underemployed. https://www.abs.gov.au/ausstats/abs@.nsf/mf/6226.0

The government should introduce a Job Guarantee that offers a job at a living (minimum) wage to anyone who wants to work but cannot find employment. See:-https://futuretofightfor.org.au/policies/01/ and Associate Professor Pavlina Tcherneva  https://www.pavlina-tcherneva.net/job-guarantee-faq

The Australian government can afford this program because it has has no financial constraint as the issuer of the currency. A currency-issuing government can always choose the unemployment level once the spending and saving decisions of the non-government sector are implemented.

In terms of the overall working of a national economy ( macroeconomics), a Job Guarantee would be an automatic stabiliser that ensures that the Government is doing necessary amount of spending where it is needed in the right places and right time to achieve full employment with stable prices.

When the private sector is recovering, federal government spending would automatically fall as people leave the Job Guarantee for higher paid jobs elsewhere.

When the private sector experienced a downturn, federal government spending would automatically increase as people lose their private sector jobs and enter the Job Guarantee.

Unemployment is a major loss of valuable productive resources, depressing the economic economic growth and lowering our standard of living of the whole community.

Offsetting the cost of a Job Guarantee would include lesser demand for Centrelink services, enhanced tax revenue and receipts, including those on superannuation and investments.

The costs associated with substance abuse, including health care costs and police interventions would lessen. Unemployment and its adverse social effects adds very substantially to on-going and escalating Government spending.

Local economies, particularly those in Rural and Remote areas would see an enhanced economy and small businesses would have better prospects.

Training must be included, to ensure that the unemployed are equipped with skills that will be needed when the private economy starts again to employ more people.

Not a “work for the dole” proposal. This is voluntary, full time employment, guaranteed and managed by the government.  It is not intended to be compulsory: it’s there for people who want to work. How to deal sensibly and humanely with those who are able to work and refuse to do so should examined and addressed – it is beyond the ambit of this paper.

Those who cannot work because of drug or alcohol dependencies should be offered health care, training, counselling and more to equip them for meaningful work.

Job Guarantee Programs should be managed at local area or even neighbourhood levels. Each area’s Program must be managed and supervised  by appropriately qualified people – a well paid, sought-after job. (eg – maybe Centrelink staff, fewer of which would be now needed).

Some Job Guarantee examples

  • Noxious Weed eradication – pests: graffiti – rubbish removal on beaches and in waterways
  • Road Maintenance at low levels – small truck/4 or so workers- potholes, rubbish. Bike paths – many rural roads see cyclists at risk from traffic. Path enhancement is useful and ‘pick and shovel’
  • Climate change responses – tree planting and care 
  • Aged Care needs, care etc – working with the long term professionals.
  • Community gardens, particularly in remote areas – good tucker for kids, aged, deprived.
  • Enhanced care of National Parks, recreation areas, sporting facilities, school premises and streets and neighbourhoods generally
  • Indigenous health, nutrition, social and other problem areas  – Care for Country.- Indigenous Fire Management practices
  • Gardens for fresh produce in remote areas, particularly Aboriginal and Islander Communities.

 The points made above are only a very broad outline – see here  and  generally  online and elsewhere for much more information.

Some Programs with broadly intended policies in the World include:-

India’s Rural Job Guarantee

India has had a rural jobs guarantee program in place, for unskilled workers.The jobs provided  a minimum wage– which varies by Indian state. Employment must be provided within five km of the worker’s home.  The jobs are unskilled labor – priority is infrastructure: e.g., roads, canals, ponds, wells.

Economist Jayati Ghosh wrote this assessment of The Mahatma Gandhi National Rural Employment Guarantee Act of 2005 (MGNREGA) in The Guardian in 2015:

‘….. two interlinked goals: ensuring livelihood security to rural residents by providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work; and using the programme to mobilise existing surplus labour in the countryside, to unleash productive forces and generate more economic growth in rural areas.’

‘….. concerns about corruption and unevenness in implementation across states. … several tangible positive effects (pdf): increasing rural wages and reducing gender wage gaps; smoothing and stabilising consumption by poor people; enabling better access to nutrition, health and education; increasing financial inclusion because of payments through bank accounts; and reducing distress migration….. It has also served as a built-in stabiliser of the economy during downturns.

The Program has fallen in a heap since recent Government’s  policy decision not to fund the program adequately. This failure to fund what even the World Bank considered useful and effective seems to follow widespread failure to understand how a modern economy works. Budget Surplus superstition versus the 

Other programs – not the same as a Job Guarantee

Workfare is a scheme where participation in activities is a requirement for obtaining social benefits. 

Several countries have implemented direct job creation schemes to combat persistent unemployment – Argentina, South Africa, but these schemes are not similar to a Job Guarantee.

In the United States, the Humphrey-Hawkins Full Employment Act of 1978 authorizes the government to create a “reservoir of public employment” in case private enterprise does not provide sufficient jobs. Never implemented!

Superannuation and Future Funds

Superannuation, Future Funds and Sovereign Funds are effectively a tax on businesses and individuals with exorbitant management fees and offshore investment rife.  Trillions in assets – billions a year in fees and wasted insurance premiums – value of the tax concessions far outweighs the reduction in Age Pension outlays.

 The Government should provide pensions and disability income at responsibly generously levels, with private superannuation available to those who chose it, at their own cost without tax concession, to augment their government pensions.   

The fairest retirement policy is for the Australian Government to provide a  pension to every individual who is aged 65 and over. Pay it at  100 percent of the full-time minimum wage. No means-testing -save adminitration costs. Tax system could ‘skim’  uneeded largess from the wealthy, if it was worthwhile.

The rationale for the Future Fund:-’

‘We invest the assets of the Future Fund, the Medical Research Future Fund, the DisabilityCare Australia Fund, the Aboriginal and Torres Strait Islander Land and Sea Future Fund and two Nation-building Funds’. 

Australia’s sovereign currency government can always fund medical research, care for the disabled and provide sensibly and adequately  for Indigenous needs right now and an on-going basis in $A, when and where they are needed, many urgently right now.

A future fund is costly to oversee and manage, as is any venture depending on return on investment. The fund is at the mercy of markets and trade wars eg USA/China tariff wars, which has seen falling stockmarkets, leaving returns in doubt.

The Australian Future Funds have substantial investment in Global Equities eg Future Fund as at 31 March 2019 has 17.4% in Developed markets and  9.00% in Emerging markets. This at the same time as Australia’s Public Good is grossly diminished by unemployment, underemployment, crappy Aged Care, contemptuous  NewStart and disgraceful Indigenous disadvantage. 

Too many of us – Politicians of all kinds, Media, many Academics and those of us who have neither the time, backgrounds or knowledge  to challenge the prevailing superstitions are still trapped in a commodity money mindset and haven’t progressed conceptually from the days when money was backed by gold.