Unemployment – A Job Guarantee Solution

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

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

  1. The longer people stay unemployed, the more they lose work-skills and non-government employers tend to prefer to hire from those already working or who have been unemployed short-term.
  2. Poverty reduces people’s capacity to buy nutritious food, housing and health care.
  3. Unemployment can indirectly affect health because of reduced participation in society or from the stress of financial strain.
  4. Prolonged unemployment can lead to an erosion of skills, basically robbing the economy of otherwise useful talents. 
  5. Unemployment can force families to deny educational opportunities to their children and deprive the economy of those future skills
  6. 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%.
  7. Mature-age job seekers lose their skills tend to be lost over time, particularly as they are more likely to experience longer periods unemployed. These skills are also lost to the labour market and industry.
  8.  Prolonged unemployment can lead to greater skepticism and pessimism about the value of education and training – workers less willing to invest in the years of training some jobs require.
  9. 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.
  10. Government’s providing derisive and inadequate income support eg Newstart to provide a Budget Surplus!!!!
  11. Drugs, alcohol abuse and crime flourish in a poor, unemployed community.

Distinguished British economist John Maynard Keynes, as long ago as the 1930’s wrote : ‘… outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes.’  https://www.investopedia.com/terms/k/keynesianeconomics.asp  

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
  • Maybe ‘Night Watch’ patrols – DON’T approach or  try to apprehend suspicious parties – just call the Police!
  • Indigenous health, nutrition, social and other problem areas  – Care for Country. 
  • 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.