Scottish-born economist - Angus Deaton - recently published his new book - An Immigrant Economist…
As a follow up to my blog on underemployment this afternoon, I was interviewed on national ABC radio programme PM this evening. You can read the transcript here PM Transcript. You can also listen to the podcast (courtesy of the ABC) from the CofFEE podcast site. The discussion also had Ian Harper from the Fair Pay Commission on. You will not be surprised to hear that I totally disagree with him on minimum wage setting.
Initially I emphasised that for $8.3 billion per year the Federal Government could create 560,000 minimum wage jobs. So in that context, the $42 billion is very light on with respect to helping the unemployed.
As we enter the period when the FPC is deliberating on the next minimum wage adjustment (in July) the jackals are circulating with their usual nonsense about putting low-skill workers out of work if it lifts the minimum wage too high. I noted that
No I’m in the camp that says the Fair Pay Commission should reward the most disadvantaged workers to the level that’s commensurate with what we think is an adequate standard of living.
In terms of the underemployment data I commented on earlier today, the PM reporter Ashley Hall noted my position
that underemployment levels soared during the recession of the early 1990s and never fully retreated because governments cut the number of public service jobs despite a string of Budget surpluses. He argues it was an opportunity squandered.
I told Ashley that:
This was a period where they should have been quickly mopping up the devastation of the ’91 recession, getting people back into work, creating conditions in the labour market that encourage full-time work, not the ever-increasing part-time work which the underemployment figures are telling us.
And now we go into the next cyclical event, downturn, and we’re much worse off than we were when we went into the ’91 recession …
And that’s why I was thinking that $42-billion for approximately to save 90,000 jobs is very poor arithmetic. We could create 560,000 low-skilled jobs for around $8.5-billion.
So I think the Government should be out there offering a job to anybody in the public sector that wants one, at a minimum wage, to work in community development and environmental care services, as the very least it can to shore up the loss of employment that we’re going to see in the coming months.
Of-course the neo-liberals haven’t gone away yet. Old neo-lib diehard Phil Lewis (University of Canberra) said that a Job Guarantee scheme is just a more sophisticated Work for the Dole scheme. Wrong Phil, you better read some of our work to see how different the JG actually is to Work for the Dole (WfD). WfD is a compliance program aimed at disciplining those on income support. It provides very little in terms of income security and wider entitlements such as superannuation, sick pay etc and also has failed as a skills development framework. It is just a mean-spirited way of making the unemployment do something in return for the pittance they receive from the public purse.
Phil Lewis also said “In the end you can only get more jobs if employers can find useful things for people to do.” That is true Phil, spot on. But under a Job Guarantee the government becomes the employer getting the unemployed and underemployed (by choice) to do many useful things for the community and the environment. I see thousands of jobs per day that could be done which the private market will never create because while they offer massive social returns (to all of us) they do not create private profit. You just have to use your imagine and engage in a bit of lateral thought. But neo-liberals have never been much good at that. They have one mantra – let the free market be free. Well the current period in our history surely tells us that this is not a sensible basis on which to base government policy nor our hopes and aspirations.
There is another aspect of the claim that public sector job creation schemes don’t engage people to do anything useful. Why isn’t the same criticism levelled at the tens of thousands of low-skill, low-paid jobs that the private sector creates each year (mostly in the service sector)? What is more useful about burger flipping than say, a Job Guarantee job that maintains the gardens and houses of several elderly persons who would otherwise be forced to leave their homes prematurely and go into aged care facilities? What is useless about workers being employed in environmental services to restore the devastation left by our poor (market-driven) land-use practices? Why is a musician or entertainer who is employed under a JG and who might entertain school children or elderly citizens useless?
And my final comment: has anyone at a shop check out or cash register ever asked you – do you have a real job mate? is your job useful? do you work in the public sector? etc. Not once have I been asked that. The shopkeeper or assistant takes my money cheerfully and this spending underpins employment and growth. A Job Guarantee worker would spend the same dollars as anyone and have the same impact on total spending ($ for $) as anyone. Eventually we will abandon these myths that the neo-liberals keep perpetuating. Their day is gone. They had their chance. And what a mess they have left.