A Job Guarantee Program – the most effective way to achieve a Fair Go  for our Society and its Economy

Unemployment increasing with COVID-19 See ABS June 2020

SEASONALLY ADJUSTED ESTIMATES (UPDATED 7 Aug 2020)

  • Employment increased 210,800 to 12,328,500 people. Full-time employment decreased 38,100 to 8,489,100 people and part-time employment increased 249,000 to 3,839,400 people.
  • Unemployment increased 69,300 to 992,300 people.
  • Unemployment rate increased 0.4 pts to 7.4%.
  • Underemployment rate decreased 1.4 pts to 11.7%.
  • Underutilisation rate decreased 1.0 pts to 19.1%.
  • Participation rate increased by 1.3 pts to 64.0%.
  • Monthly hours worked in all jobs increased 64.3 million hours to 1,664.7 million hours.

The inability of unemployed individuals and their families to function in the market economy gives rise to many forms of social dysfunction, in addition to output loss

A Job Guarantee’s purpose is to find a mechanism for anyone who wants to work to be able to succeed in and benefit from the JG job, while doing something useful for the community as a whole.

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:- Particularly, Bill Mitchell – Professor in Economics – University of Newcastle, NSWAnd Here

What is a Job Guarantee (JG)

To quote Wikipedia

A Job Guarantee Program (JG) is … a sustainable solution to the dual problems of inflation and unemployment. … create full employment and price stability, by having the state promise to hire unemployed workers … based on a buffer stock principle whereby the public sector offers a fixed wage job to anyone willing and able to work thereby establishing and maintaining a buffer stock of employed workers. This buffer stock expands when private sector activity declines, and declines when private sector activity expands…’ See Wikipedia

A JG’s purpose is to find a mechanism for anyone who wants to work to be able to succeed in and benefit from the JG job, while doing something useful for the community as a whole.

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.
  3. Unemployment can force families to deny educational opportunities to their children. Affects health – reduced participation in society: financial strain.
  4. 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. Unemployed in Outback Qld and youth unemployment very high
  5. 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.
  6. Government’s providing derisive and inadequate income support eg Newstart to provide a Budget Surplus!!!!
  7. Drugs, alcohol abuse and crime flourish in a poor, unemployed community –  Youth gangs all too common

The mass unemployment problem – as presented by Neo-liberal Governments

Professor Bill Mitchel has this to say in a log post – one of many on this topic- A new progressive agenda? (September 28, 2010).

“Unemployment is couched as a problem of welfare dependence rather than a deficiency of jobs….responsibility to be shifted from government to the individual. To force individuals to become accountable for their own outcomes, governments embraced a shift from active to passive welfare and the introduction of alleged responsibilities to counter-balance existing rights.

Reciprocal obligation was developed … as a means of reintegrating the allegedly, welfare dependent underclass into the community.

… no reciprocal obligation on government to ensure that there are enough jobs for all those wanting work. … fallacy to consider that the difference between getting a job and being unemployed is a matter of individual endeavour or preference.”

How do we fund a Job Guarantee and pay for all this?

Australia issues its own currency, $A. It can run a pure deficit, without borrowings. A budget surplus drains savings from the private sector and that leads to loss of jobs and less work done. The Government has to spend money into existence. Without that there can be no tax.

A Sovereign Currency Nation’s government like Australia’s primary purpose is to improve the well-being of its population. Balancing budgets is an irrelevant and destructive blind alley. The real economy is what is relevant to well-being, care for the environment, defence, research education, aged-care and employment (and so much more).

A Sovereign Currency Government issues the currency and it must first spend it by crediting private bank accounts before it can tax – by debiting bank accounts. The claim that governments must tax or borrow to ‘finance’ its spending is false under a fiat-currency system. See – https://www.investopedia.com › Economy › Economics

The restrictions on government spending are the quantity of real goods and services available for sale in its own currency, including all the unemployed labour. The only constraint that a currency-issuing government, such as the Australian government faces, are how many real goods and services are available for sale in $A.

Australia’s Sovereign currency-issuing Governments can issue debt-free money – and it does this already see RBA has purchased a total of $A40,250 million worth of Australian government bonds

A Job Guarantee would be an automatic stabiliser that ensures that the Government is doing the 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.

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.

Transfer payments made by the government, including unemployment benefits and other  social security payments, are not counted in the Gross Domestic Product. A JG which would see people employed, rather than  handed inadequate social security payments by the Australian Government would see the GDP enhanced!

Australia’s Job Guarantee Program should be funded, managed at local area or even neighbourhood levels, and administered by an Australian Government Department, the culture and emphasis of which would focus on its reason for existence – to serve the needs of the environment, community, and people and to enhance the public good.

A Job Guarantee’s management and some of its day to day work allocation and supervision would require additional staffing at Local levels with staff engaged by the Local or Community Council or perhaps also by a Statutory Authority on an on-going basis. For example,  the Bellarine Bayside Foreshore Committee of Management (Bellarine Bayside) …formed by the Victorian Government in 1994 to manage foreshore Crown land reserves on the northern Bellarine Peninsula ...

Essential works and programs should not rely on Job Guarantee workers or initiatives

Aged Care and Disability (NDIS) must be provided by a responsible Government.On-going Fire Management, Aboriginal “Care for Country”, Transmission Line and Road Maintenance Education etc – JG provides ‘extras’ and for the unexpected eg Fire Flood – but not the primary delivery, day to day essentials.

A Job Guarantee job is real work

  • People who take a JG job are subject to job requirements generally similar to those in the private sector or government sectors. If they don’t report for work or flout workplace health and safety requirements or other serious misdemeanours, then their employment may be terminated. However, they must be afforded substantial assistance and counselling to be successful on the job
  • A JG is not run for profit. It produces public goods and services but its reason for existence is about serving the needs of the community, the environment and people; and to enhance the public good. A JG is not about profit. A JG fits jobs to the person, as far as possible and there may be necessary to move someone to work more suited to their skills and personality.
  • If drug or alcohol abuse or medical conditions workplaces inclusive of people with disabilities, the long-term unemployed and other vulnerable groups.affect someone’s capacity to work, they can be referred to relevant rehabilitation programs, which can be provided through the JG itself.
  • 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.

Examples of Job Guarantee projects and jobs

  • See a UK Guardian article (July 4, 2019) – from its environmental editor – Tree planting ‘has mind-blowing potential’ to tackle climate crisis
  • enhancing the appearance and utility of urban nature strips
  • fire load reduction to mitigate bush fire risk, inclludng indigenous Fire Management practices – ( On-going management permanent – JGs supplement and augment)
  • Noxious Weed eradication –
  • pests rabbits foxes deer pig etc
  • rubbish removal on beaches and in waterways
  • Road Maintenance at low levels – small truck/4 or so workers- potholes, rubbish, graffiti
  •  Bike paths – many rural roads see cyclists at risk from traffic. Path enhancement is useful and ‘pick and shovel’
  • Aged Care needs, care etc – working with the long term professionals – but NOT to replace or augment primary health carers or providers – supplement in non-essential areas for enhanced amenity etc.
  • Community gardens, particularly in remote areas – good tucker for kids, aged, deprived. ( On-going management permanent – JGs supplement and augment)
  • Enhanced care of National Parks, recreation areas, sporting facilities, school premises and streets and neighbourhoods generally. ( On-going management permanent – JGs supplement and augment)
  • Indigenous health, nutrition, social and other problem areas – Care for Country.- Indigenous Fire Management practices – ( On-going management permanent – JGs supplement and augment)
  • Restoration and maintenance of native grasslands, forests steams etc
  • Bike paths – many rural roads see cyclists at risk from traffic. Path enhancement is useful and ‘pick and shovel’
  • Community gardens, particularly in remote areas – good tucker for kids, aged, deprived. ( On-going management permanent – JGs supplement and augment)
  • roof top gardens indigenous plants public areas

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

More Blog Posts are intended to deal progressively with proposed JG projects, examining issues significant to that project eg how to work with nature strips on Council or State roads.