Job guarantee

The Job Guarantee strategy is to reduce chronic joblessness which has wrecked families across Australia since the neo-liberal attack on full employment began in the mid-1970s and is essential for the Rudd government to create jobs in this recession.

This is the creation of ‘public good’ jobs to provide work for the unemployed. Professor Bill Mitchell (1998) argues that if the private sector does not provide sufficient job opportunities to achieve full employment, then the government should guarantee a full-time or part-time job to everyone who desires one at the living wage level. There are many unfulfilled needs that could be met by Job Guarantee workers including environmental restoration, green jobs, community services to the aged, youth, and the disabled, and other similarly useful activities.

Watts and Mitchell (2000) believe such a program will generate a high rate of social return on public expenditure and reduce the unemployment rate to 2%. This is more so than the Rudd stimulus.

If it is assumed that these jobs are distributed pro-rata between the official unemployed and the hidden unemployed and a full-time salary level set at two-thirds of the average private sector rate, then Watts and Mitchell believe a multiplier effect will see an increase in consumption and work opportunities in the private sector … What Watts and Mitchell call ‘the arithmetic of the job guarantee’ is an impressive attempt to quantify pertinent variables.

More recent costings and analysis including a full operational plan for the implementation of a Job Guarantee can be found in Centre for Full Employment Newcastle University Creating effective local labour markets Report released last December.

So it might seem obvious that a focus on getting people back into work in the most direct way possible – that is, giving them a job – would be the best way of resolving social alienation. But, unfortunately, so far, not too many people of influence are focusing on that solution. Instead we are being arraigned with supply-side – blame the victim approaches. If someone is unemployed then they must not have enough skill or a positive enough attitude.

This can never be the reason for mass unemployment when there are too few jobs. Supply characteristics merely determine an individual’s position in the labour queue.

Policies that alter the distribution of skills and attitudes in the face of an economy that overall doesn’t produce enough work merely shuffle the queue of disadvantage. It is a fallacy to think that without enough jobs effective outcomes will result from relentless training schemes. In times when the macroeconomics job ration is binding, these expenditures are largely a waste of time and money.

From Professor Bill Mitchell Centre for Full Employment and Equity

http://bilbo.economicoutlook.net/blog/?p=2569#comments

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