Below is an article I wrote in attempts to get published in various media outlets. Obviously that has been unsuccessful. Most journalist look at the incorrect indicators in assessing ‘economic’ performance. Things like the underlying inflation rate (which harps back to fight inflation first over unemployment), the decreasing or less than expected government spending (as if the government is like a household and can run out) and perhaps the improving employment data/job vacancies. Yet almost always there isn’t discussion on the overall un and unemployed. This is one aspect of what causes wage suppression, poverty and an individuals physical and mental well-being.
Anyway it would be a shame to waste the simple articles I’ve written so I’ll just post it here.
Unsuccessfully published article – that is better than the crap you read on most Australian media sites.
Towards the end of the month the Australian Bureau of Statics releases their Labour Force Survey. This is the data that shows us the unemployment statics. It isn’t an indicator of where we are headed as it is similar to looking at a distance star light years away. The data you are observing has already taken place. Nevertheless, it is a useful guide that shows policy makers trends and should help decide fiscal policy (Government spending)
This year as a result of COVID-19 we have had some rather drastic swings in the employment data for obvious reasons. The health measures took precedence as the Australian Government implemented a range of income support measures to protect those that would’ve otherwise lost incomes. Notwithstanding some issues of the support measures flowing to some senior executives, the JobKeeper program delivered $750 per week to eligible employees and the rate of our unemployment benefit, which hadn’t risen in real terms since the nineties increased $550 a fortnight to reach a total at the poverty line.
The last available data for job advertisements saw a 23.4 per cent increase between August to November of 2020 for a total of 254,400 jobs advertised. The unemployment rate continues to drop from its peak of 7.5 percent. The underemployment rate decreased as well from a high of 13.8% to its current level of 8.5%. The monthly change in hours worked was 2million hours. These are all positive developments.
However, when we compare the data from a similar period last year we can see the yearly change in hours worked fall by 26 million hours or a drop of 1.5%. When we look at the total number of people seeking work, that numbers 912,000 competing for around 254,400 jobs. This doesn’t factor in the underemployed who desire more hours of work. The numbers don’t look so rosy when you compare them from this perspective.
The question we should be asking is can we do better? Can we as a society ensure enough employment for all? Not only should we be seeking more jobs advertised than demanded but can we also ensure matching peoples skills sets with employment.
This isn’t some ‘radical’ idea. It was Australian Government policy between 1945-1975 that was maintained by both sides of politics. In a similar sense to the United States ‘New Deal’ and Britain’s ‘Full Employment in a Free Society’, Australia had the rather blandly titled 1945 Tax White Paper on Full Employment. The policy itself stated;
This policy for full employment will maintain such a pressure of demand on resources that for the economy as a whole there will be a tendency towards a shortage of men instead of a shortage of jobs.
It was understood that unemployment was a systemic issue and the collective will of our society ensured unemployment remained below 2 percent. In the same way the pressure on our political class ensured we had lockdowns and prioritised health over profits, despite some business interests to the contrary, with enough collective will we have the power to ensure that the number of job vacancies exceed the number of job seekers.
The covid pandemic has highlighted one thing very clearly. That is the Australian Government always has the financial resources to deal with spending collapses. The questions we need to be asking aren’t how to fund public expenditure but questions about available real resources. The shortage of masks at the beginning of the pandemic being a good example. There was something we needed and didn’t produce so we organised the labour and the factories to manufacture what we needed.
This same concept can apply to organising our labour and tackling the dual crisis we face, climate change and systemic inequality. Last year we experienced one of the hottest years on record which resulted in the catastrophic bushfires that lined the east coast. We have so much work to do in terms of constructing alternate forms of energy, other than fossil fuels and in rehabilitating ecological ecosystems that have been destroyed because of our land management practices.
We have an idle labour force of hundreds of thousands of people. Millions when you include the underemployed and hidden unemployed. During the ‘full employment era’ the Commonwealth Employment Service would match those seeking work to relevant roles.
Modern Monetary Theory has been mentioned in numerous articles over the past year. At its most elemental level it says a currency is a social and legal construct. Currency issuers spend via an appropriation bill and are not financially constrained, though they are constrained by real resources. A monopolist of a currency can purchase whatever is for sale in the currency it issues, including idle labour. Thus unemployment is a political choice.
We have witnessed the Australian Government spend some $200 billion and we observed a deflationary period. The numbers of those that desire more work indicate we can be spending a lot more and putting people to work on socially useful projects. It is a question on what we want society to be working towards. Which certainly puts a different perspective on the unemployment figures.