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Posted: March 15, 2005 Government and the Job Guarantee! On Monday, the House of Representatives Committee on Employment, Workplace Relations and Workforce Participation released it report - find it HERE outlining its solutions to low participation (read: unemployment). CofFEE made a formal presentation to the Committee on the Job Guarantee and there is discussion of it in the report. Contrary evidence which seems to influence the Committee negatively was given by the Department of Employment and Workplace Relations (DEWR). As a historical note, the Federal Department of Employment in whatever guise was always a 'progressive' arm of the federal bureaucracy, in contrast to Treasury and Finance. Now it does the work for a Government which has abandoned full employment and provides advice to them which fails to stand up to scrutiny. Last year, DEWR evidence in the 2004 Safety Net Wage case was rejected by the AIRC Bench after CofFEE provided evidence to the contrary - see paragraphs 160-166 of the Transcript. Suffice to say, I would fail students who performed the regressions that the Commonwealth tried to pass off as evidence to stop the most disadvantaged workers getting a fair wage rise. Anyway, as background to the report released yesterday, we need to take a step backwards. In 2003, the Newcastle City Council unanimously endorsed the Job Guarantee as city policy and proceeded to promote the idea at higher levels of government. First, the Hunter Region of Councils endorsed the plan. Then the Newcastle City Council took it to a higher level and was able to get CofFEE's Job Guarantee plan endorsed by the Australian Local Government Association The wording of the carried Resolution reads:
The National General Assembly of Local Government authorise the Local Government Association (LGA) to enter into discussions with the Minister for Employment, Mr Abbott and his counterpart in the Federal Opposition, concerning proposals developed by the Centre of Full Employment and Equity (CofFEE), at the University of Newcastle, for a Community Job Guarantee (CD-JG) which proposes a Job Guarantee for all long-term unemployed people and a Youth Guarantee providing education, training and employment for young unemployed people. On July 16, 2004 the ALGA did write to the Government. They received a reply from the Federal Minister for Employment and Workplace Relations Kevin Andrews on August 13, 2004 outlining why the Government rejects the Job Guarantee. The ALGA has now published this reply from the Federal Minister. You can find it HERE. It makes very interesting reading (with DEWR's prints all over it). I suspect it is also the same evidence that was provided to the House Committee which reported yesterday. As an aside, the Opposition Employment spokesperson, Macklin has not provided the ALGA with a reply. But then why would we be surprised about that! In the next several blogs I will respond to each point raised by the Federal Minister. Overall it reveals a Government that is actually scared of letting market forces work when it comes to providing advantages and opportunities to the most disadvantaged workers in our communities. It seems it would rather keep them suspended in a void of joblessness and cycle them through clearly irrelevant training programs (remember they are now claiming there is a skills shortage despite the Job Network allegedly have been effective at making people job ready since 1998!). They seem to distrust the ability of the private sector to structure interesting and attractive jobs to lure workers away from Job Guarantee positions. The Minister starts by defining terms (the indented text are direct quotes):
I understand that under the CD-JG proposal developed by the Centre of Full Employment and Equity (CofFEE), the Federal Government would maintain a buffer stock of low-skill public sector jobs in the community and environmental sector, for all long-term unemployed people and youth who are not undertaking education or training. It appears that these jobs would be paid at the Federal Minimum Wage (FMW). So far so good! The Community-Development Job Guarantee (CD-JG) is a first-step plan to get the full Job Guarantee machinery operational. The full proposal however provides buffer stock employment to anyone who wants such a job at any time at any fraction of a working week. It is an unconditional fixed wage offer to anyone by the Government. That is a very powerful aspect of the proposal as it means the Government 'hires off the bottom' rather than the top and can never be a source of inflationary pressure. The Minister continues:
The objectives of the CD-JG proposal are constructive. Utilising the skills of the unemployed while they look for work fits well with the Government's broad Mutual Obligation framework, which emphasises responsibility and activity (rather than dependence and inactivity). Working helps both the unemployed and the community that supports them. It provides the unemployed the opportunities to improve (or stop depreciation of) their skills while looking for work. Furthermore, these projects work well if they are implemented locally at a small scale. Again, we could have hired the Minister's scribe as a Job Guarantee copy writer. It is an essential part of the Mutual Obligation framework that the Federal Government honours its obligations as a signatory to the United Nations Declaration of Human Rights which was carried on September 24, 1948. A relevant part of that Declaration says that "Everyone has a right to work, to free choice of employment, to just and favorable conditions of work and to protection against unemployment." That means that if the private sector cannot provide enough jobs the Government has to ensure that the human right to employment is provided for by public sector employment. It does not mean allowing the average duration of unemployment to be around 52 weeks and allowing the average duration of unemployment to be around 170 weeks for the long-term unemployed. In the Hunter region (where CofFEE is located) the long-term unemployed are on average unemployed for 245 weeks (recent ABS data). So this mutual obligation would suggest that the Government should urgently introduce a Job Guarantee to underwrite the employment base for the economy. The Minister continues:
However, there are some difficulties with such a proposal both in terms of its costs, its impact on individuals in relation to incentives and needs and from a macro-economic perspective. I agree. But there have always been 'difficult to employ' workers yet we still achieved full employment between 1945 and 1975 because the public sector in a multitude of areas that have now been abandoned provided accessible, low skill employment at the basic wage (equivalent to the FMW). I would also add that many of the social pathologies that the Minister notes as defining the heterogeneity of the long-term unemployed have been caused by sustained unemployment. While transition back into paid employment does require accompanying strategies of training, support and mentoring the overwhelming evidence is that we are failing to do that in Australia. The Job Network has failed - see CofFEE's critique of the Job Network and references to the Productivity Commission criticism of the Job Network. Further, the skills shortage debate would also suggest the Job Network has failed dismally. The most pressing need for the unemployed is to create accessible employment in areas where they live adding value to the community. The Job Guarantee is the only way that can be achieved in the short run. As I will explain next time, when I address the Minister's claim that the workers might never want to leave the Job Guarantee, the private sector has complete scope to hire out of the Job Guarantee workforce by simply offering attractive employment conditions. To think that the workers would never be lured out of the Job Guarantee is to display a staggering lack of confidence in market forces. More on that next time as I delve further into the Government's reply. Blog entry posted by bill |