CSPU Secretary Nadine Flood:
CSPU Secretary Nadine Flood:
A Job Guarantee is something which can be supported by people across the political spectrum:
That’s a New Deal-style idea more closely associated with highly progressive Democrats. But Kevin Hassett, the conservative chairman of the White House Council of Economic Advisers, believes some Americans are so disconnected from the workforce that the best idea to get them working again could be a federal jobs program that would ultimately lead to private-sector employment.
“We’ve not done a good job as a society at thinking about how do we take people who have become discouraged and reconnect them,” Hassett said in the latest edition of the “POLITICO Money” podcast. “And it’s such an urgent problem that government programs that directly hire people might be part of the solution.”
To Hassett, long-term unemployment often leads to family breakdown and descent into addiction and other maladies. “People who have been unemployed for more than a year very often don’t ever reconnect to the labor force,” he said. “And very often they fall into sort of downward spirals of personal despair where they end up abusing substances and have a higher risk of divorce. Some of the literature in this area is just absolutely disturbing.”
A just social-wage and a job guarantee
By Dr Steven Hail
For a radical increase in the statutory minimum wage rate in a country to transform the lives of the lowest paid, it must be combined with a guarantee of employment at that minimum wage.
My take-home from this article: if the poor were not generally innumerate there would be more riots.
The problem with the Job Guarantee is the “Guarantee” part. Local and Federal governments employing people is already a thing. You want to encourage more of it? Ok then, what needs to be done? But as a “guarantee”… what happens if a majority of the population decides they want to call in on that guarantee? How could the government afford that? What would they even all do?
Guaranteeing work is guaranteeing redundancies and waste, the complete opposite of a UBI’s goals so it’s not strange at all that the proponents of one conflict with the other.
@Ryan has an important point. To date I cannot think of a single government “guarantee” project (pink-Batts, sound insulation, rebuild Timor, any number of RED or land-care schemes, the list is long and on all sides of politics) which has not resulted in — let’s be coy and just say — “shady” entities springing into existence suspiciously tailored to milk the scheme and only-maybe-by-accident fulfil its intentions.
Funny how only the dumber ones are around when the latest scheme falls apart/funding runs out.
I’m not sure why most people would trade in above minimum wage jobs for minimum wage jobs. According to (somewhat mashed together) statistics there were 12 380 000 people working in Australia in November (ABS) last year, approximately 1.8 million were on the minimum wage in May 2016 (ABC). Added together with the November 2017 unemployment statistics, that would make roughly 2.7 million people needing work if everyone on minimum wage wanted to take on job guarantee work over their current employment. Paying those wages would cost $1,876,230,000 a year (weekly minimum wage of $697.90 times 2.7 million)… [Edit] times 52 ehh that is 97 billion. Australia’s annual military budget is A$34.7 billion for comparison. It would require a lot more tax.
There is a lot of socially useful work that doesn’t get done at the moment because it isn’t profitable. The obvious and socially important tasks that could be turned into jobs would be people working as carers, social workers, work for the dole type tasks, like bush regeneration and park maintenance (which should really be paid properly). There are jobs that would make money, but might not make a profit in the arts in particular. Funding these sorts of jobs add to the quality of social life.
People earning wages as part of the job guarantee would pay taxes which would pay for a part of it, also all of that extra cash would be spent and generate more work for those in other jobs. Some work would make money, which would pay for part of it too.
There is psychological damage that comes from being unable to work due to poverty and social isolation. The rate at which we have set the UBI in our policy is a pittance, only marginally above the dole, which is not enough to meet basic needs. If the UBI was higher I think that would be alleviated somewhat, but a job guarantee would ensure the financial capacity to properly participate in social life for those currently underemployed or unemployed.
I’m not sure why this would all need to be outsources to small private contractors, could always work in oversight as one of the job guarantee jobs if not something higher paying in the public service. I think the social benefit would far outweigh the costs.
@Frew : With respect it was not I who made the connection between “shady” entities and small private contractors. However the shoe fits I will not contradict you!
Government oversight? Seriously: what is that?
Fixed this bit. Forgot to multiply it by 52. If it were just the unemployed, it would equal 25.473 billion a year.
Centrelink, ATO, ASIC etc. etc. etc.
I kind of rest my case. None of the above are exactly exemplars of effectiveness as I am sure you must concede.
I don’t think it is much of an argument against a job guarantee though. A bit of wastage compared to what I think is a large social benefit doesn’t phase me at all. The actual cost is a much larger argument against it. I think @Jesse_Hermans can better explain the economics of how it would work than I can.
Wasn’t arguing against job guarantee here. Now if you had suggested a job guarantee involving sponsoring unemployed to police abuse of misguided vote-buying otherwise-pointless projects I think you might be on a winner!
Mind you I realise the above is a contradiction in terms. A “bit of wastage” is almost military…
Understanding how a Job Guarantee can be paid for requires a basic grasp of the fiscal capacities of a sovereign currency issuing Government. The actual financial cost is not what matters:
We need to stop thinking in terms of dollars and start rethinking in terms of real resources like they did during WW2 and the post-war period. No one for a minute in those days asked where the money was going to come from to pay for those bombs, guns, tanks and planes. It was always a question of do we have enough steel; enough rubber; enough manpower; enough oil; enough idle factories? etc.
The only constraint on Federal Government spending is inflation, and the constraint on inflation is enough real resources capacity to supply the demand from that spending. This understanding of fiscal policy is called “Functional Finance” (as opposed to “Sound Finance” which is currently used), and was used by Australia (and most western countries) in the post war period until the mid-70s oil shock. It was subsequently abandoned for a combination of reasons, not least the overwhelming political pressure of the business community, which had for year been trying to end the policy throughout the Menzies era. The problem was it couldn’t be done without a good crisis to blame, because you’d be thrown out of office if you let unemployment rise above 3% (as almost happened with Menzies).
It is the reason we intentionally ran persistent fiscal deficits during this period. It was the Government’s responsibility to ensure there would always be enough spending in the economy to create enough demand for enough jobs for all those who wanted to work, but not too much as to create too much inflation.
What makes the JG different from Keynesianism is the program focuses on buying labour off the bottom of the market (directly tackling the problem), rather than trying to buy from the top by purchasing goods/services at market prices. Buying off the bottom creates an automatic stabiliser (bufferstock) of JG workers which acts as a automatic discipline on inflation. There is a lot of academic literature on this topic, as well as others.
As for oversight, the best form of accountability I have ever encountered is citizen juries and the power of sortition. You cannot rig or corrupt a system where average citizens are constantly being randomly selected, it prevents a game of mates from occurring.
You can get an insight into the history of Full Employment and the Right to Work in Australia here.
We used to have a large number of institutions which acted as Employers of Last Resort, such as the Metropolitan Board of Works, Parks and Gardens Office, Railway yards, utilities etc. which also trained thousands of apprentices and gave them ongoing work until the private sector wanted them.
What it all boils down to is we need to stop trying use the economy to balance the budget and start using the budget to balance the economy - if that requires persistent fiscal deficits so be it.
Put incredibly bluntly the argument boils down to:
A) should governmental money be spent to encourage growth (assuming the spenders spread the benefit), or
B) should governmental money be retained (because we cannot trust the buggers who receive it not to be dishonest.)
Oops. Shaded language: should have said “entrepreneurs” not “buggers.” Showing my politics. Not done!
That is some hyper-aggressive formatting. Maybe you need a stiff drink and a nice lay-down.
I vote A. Of course ‘the buggers’ who would receive the vast majority of the job guarantee money would be minimum wage workers, who would only be as dishonest as the average minimum wage employee. It’s not like they could afford to hoard it. I quite like @Jesse_Hermans idea for job guarantee oversight:
Of course you did. You represent a “liberal” party.
However in practice the said buggers who actually milk the bulk of any government-sucker handout are not the minimum-wage workers - and that is kind of my point - cheap-shot formatting errors or otherwise!
Apologies, I thought it was a nicely formatted equivalent of caps lock.
I agree there are problems with nepotism in government contracts, where bureaucrats could be promised future jobs in the companies overseeing projects and political parties could be paid in “donations” by wannabe contractors, as well as get cushy future employment in industry groups as is already common. I think the proposal of citizen juries to oversee projects seems to me to be a good one. It is hard to bribe random members of the public who change roles regularly.
Apology accepted, though not consciously demanded. (Complete aside: I don’t think four-hyphens ought to work like that. Discuss bug?)