A Guaranteed Job? Radical idea to combat automation, alienation gathers momentum

by | Dec 23, 2020 | Economy & Markets

A maverick Liberal MP crossed the floor of a state parliament this year to help the push for a Job Guarantee. Callum Foote and Michael West report on the radical political outcome in Tasmania to tackle rising systemic unemployment, and the economic case behind it, MMT.

An extraordinary thing happened in the Tasmanian parliament this year. Liberal MP, Sue Hickey, Speaker of the House, crossed the floor to cast the deciding vote in favour of a Greens motion to investigate a Job Guarantee.

It was the first time Liberal government had lost a vote in the house since Peter Gutwein took over as Premier in January this year. Sue Hickey is often described as “maverick Liberal MP”. Maverick or not, it is highly unusual for parliamentarians to cross the floor, to side with their political adversaries rather than their colleagues, and Hickey’s decision spoke volumes about the subject matter at hand.

A Job Guarantee is an “unconditional offer of public employment at a socially inclusive minimum wage to anyone who wants to work but cannot currently find employment,” says the Centre of Full Employment and Equity (CofFEE). Unlike the “Universal Basic Income” (UBI), an idea which has also gained currency in the debate over the future of work, a Job Guarantee entails the promise of training and skills, of useful employment.

Both ideas are driven by the inescapable fact that automation in the workplace will continue to wipe out jobs and create permanent, systemic underemployment and unemployment – which will lead to social problems.

The Tasmanian motion to investigate a job guarantee – put by Greens leader Cassy O’Connor – is the first of its kind to be proposed and supported in an Australian parliament. It is based on research by Newcastle Emeritus Professor and Modern Monetary theorist (MMT) Bill Mitchell.

Professor Mitchell, the director of CofFEE, said that to get to the stage of winning such an historic motion in parliament required a lot of behind the scenes work. He has been briefing state and federal politicians and running workshops with governments and trade unions on the “nuts and bolts” of MMT.

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According to Mitchell, “a growing number of different groups are becoming supportive and interested and are trying to sort out nuts and bolts [of a Job Guarantee]”.

The success of the motion shows that Mitchell’s theories have moved beyond the theoretical and may enter the realm of policy.

What does a Jobs Guarantee have to do with MMT?

According to a report produced by CofFEE, under the job guarantee, government becomes the employer of last resort, picking up the slack left by the private sector.

The percentage of the workforce requiring a job provided by the government would vary depending on private sector activity, with more jobs on offer when activity is low and fewer jobs when the economy is booming.

Pearson imagines the jobs would be provided in areas that are “broadly understood to provide a public good”, such as in community transport, education, environmental services, public works and community infrastructure, with local councils acting as the intermediary.

What is the argument for a Jobs Guarantee?

Traditional Australian economics has consistently failed to achieve a low unemployment rate, and with the current Covid-19 recession this problem is reaching record levels.

According to CofFEE, Australia’s unemployment rate has averaged 6.2% since 1978.

Since the 1990s, unemployment has averaged 7.6%.

The ABS recently noted that if the increase in workers who were classified as ‘not in the labour force’ since March 2020, the so-called “hidden unemployed”, had been officially recorded, then the unemployment rate would have been higher by 4.2 percentage points in May 2020.

This means that as of June 2020, a more accurate unemployment rate would be 10.6%, because it includes the hidden unemployed who have given up looking for a job in the current climate.

The reality could, in fact, be even worse. In July, Treasurer Josh Frydenberg said the real unemployment rate was 13.3%.

Dr Stephen Hail, of the School of Economics at the University of Adelaide, estimates that both unemployment and underemployment, called under-utilisation, is hovering around 20% in Tasmania.

Fiat Currency

MMT is founded in the belief that countries like Australia that can print their own currency ought to leverage this capacity to ensure full employment. The resulting return in productivity would add billions to GDP but would also eliminate the social and emotional toll that unemployment has on people.

Politicians are starting to take notice

Professor Mitchell believes that “even the conservatives are acknowledging that without state life support, the system is going to collapse. All the mainstream economic ideas are out the window. They no longer have any credibility.”

One only has to look at Frydenberg’s recent backflip on the household budget style of Liberal economic management, what Mitchell calls the “mainstream obsession with surplus”, to see this in action.

A Jobs Guarantee is an effective way to ensure full employment and stimulate Australia’s economy out of the current recession.

Which is exactly what happened last election.

Now that as a result of the Coronavirus recession, “a lot of the usual job creation options are not going to be available and lots of sectors are going to be sidelined for a long time” it is the time to explore a state and federal Jobs Guarantee.

“People are realising. They understand the future for their kids with only jobs available in a gig-economy that has been absolutely devastated by the Coronavirus. This future is not what any parent wants for their children.”

Mitchell first proposes a youth and/or long term-unemployed guarantee to ensure a guaranteed transition from school to work and paid vocational training without the need to engage in the often predatory job service sector.

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ABOUT THE AUTHOR

Callum Foote

Callum Foote

Callum Foote is our Revolving Doors editor exposing the links between the highest level of business and government. These links provide well-resourced private interests with significant influence over Australia's policymaking process. Callum has studied the impact of corporate influence over policy decisions and the impact this has for popular interests. He believes that the more awareness this phenomenon receives the more accountable our representatives will be.

7 Comments

  1. Avatar

    I meant to post this here!

    Well written article Callum & Michael, and it certainly brings back hard and painful memories from those horrible Howard years. My age span certainly did not help me 50-65 no matter what personal undertakings I took to get back into the work force and
    certainly fodder for the JSA’s.

    I disliked Howard then, and dislike him even more now, given the evidence to date of the damage that he has done to our Country, individually and collectively. Another facsimile of a human being that claimed to be a ‘Christian’. Very, very doubtful and a judgemental Methodist to boot. If you have yet to read David Marr’s ‘High Price of Heaven’ it’s certainly worth a read along with Marion Maddox’s ‘God under Howard’.

    Here’s what most ‘Christians’ forget, Joseph, Mary and Jesus were refugees, https://johnmenadue.com/christmas-reflection/ so according to many Christian’s versions of ‘worthy refuges’ it depends on who gets access to the system, and we know how the conservatives worldwide categorised that one, this article is testament to it.

    So, rather than focus on what you can get, directly or indirectly, what can you give to sustain its biodiversity, its ecology, its plant life, in essence our continued presence on this planet? Given our attitudes to date, do we deserve to be here? Maybe that’s the gift of 2020, a reminder of what we have become rather than what we are meant to be, living in harmony with our planet, not abusing it. Attenborough sets out our salvation, and we would be wise to heed his words. It’s not where we live, it’s how we live that matters.

    ‘Love’ is like a baby, it needs Tender Loving Care, and the planet deserves nothing less. I have learned to become a better
    gardener, in being a better gardener I notice things more readily, what remediation action needs to be taken, what support plants need, what feeding plants need. That’s how I have spent my Christmas for the past 20 years, as I have no living family and I have far too much to do to be lonely, pets, organic gardening, interest in politics and other household matters keeps me busy.

    It’s no different for our animal companions or ourselves for that matter, animate and inanimate need the same, so start noticing and being kind to nature, which in case you have not noticed we are part of! Act local, think global, she will notice.

  2. Avatar

    There have been proposals to tax companies using AI and/or robotic equipment that displaces workers, to raise the same tax that the displaced worker would be paying if doing the work of the robot.

    Companies are then better off because they are no longer responsible for sick leave and worker’s compensation, holiday pay etc, but still earn the income due to the exchanged production.

    Society is better off because there is no nett loss of taxation income.

    Workers are worse off because they lose everything when they lose their working income.

    The suggestion to bring a Jobs Guarantee into Policy is a good one, not unlike the revolutionary Guaranteed Basic Wage introduced in the 1960’s and attempted before then.

    There have been trials of a UBI scheme in some countries, without a decisive outcome regarding efficacy.
    Maybe the evolution of work will push us towards this in Australia.

    Given the historic troubled relationship between Newstart and the Conservative side of politics, this will be left to a more progressive influence to establish. Just a view.

  3. Avatar

    Jobs Guarantee, yes has a nice little ring to it, but as a theory, it is just that. I have worked in industry for 50+ years and at the end of my sentence worked mainly for Labour Hire (LH) companies; always as a casual employee. The fact that there is a shipload of money being made by LH companies should serve as a warning. There is also the fact that it is being made easier by the fascists in power to convert permanent jobs into casual positions.
    The implementation of a jobs guarantee threatens capitalism to its core as it removes the Reserve Army of Labour (RAL) out of the equation. As Karl Marx writes:
    “but if a surplus labouring population is a necessary product of accumulation or of the development of wealth on a capitalist basis, this surplus population becomes, conversely, the lever of capitalistic accumulation, nay, a condition of existence of the capitalist mode of production. Capital VI Chapter 25 Sect,3.
    Therefore how long will the capitalist class let it survive, if at all it allows it to happen.

    • Avatar

      In Australia?
      For as long as we have weak and dysfunctional opposition parties, holding seats that truly progressive men and women should be occupying.

      Vicariously, the “weak and dysfunctional” descript applies to the leaders of those parties.

      Anyone in Australia who thinks we have true democratic representation, is kidding themselves.

      Witness: Clive Palmer
      Witness: Sports Rorts
      and closer to you and I …
      … Witness: election day when hundreds roll up, asking “Who is the LNP bloke?” … or “Who is the ALP bloke?”
      They don’t even know their local candidates, much less the policy of “the party.”

      Australians are disengaged politically, thanks to the faux economy that allows them to purchase Pajero’s to go shopping in, or to ferry the kids to school.

  4. Avatar

    Wrong. bad. Just no. You hear “Guaranteed Job” yet I hear “enforced labour”. This idea will serve as a means to not fund a UBI. Yet another idea that comes from the economic “Science” department that ignores every other piece of evidence on what we know to drive human wellbeing, motivation and true economies of production. It’s a fear based idea of the lazy apocalypse that will ensue if automation occurs. We know up-skilling and educating individuals is the answer but watch how quickly the idea of “anyone that wants a job, turns into anyone we want to have a job”.

    Another idea based on the false economy using an infinite consumption model where everyone just needs a job (or 3) and if they don’t have one they are nothing but lazy, useless oxygen thieves that just need a good job to sort out all their problems.

    Another idea that will never be used by the people who attempt to create the scheme. Nor will their children or their children’s children. Another way to guarantee labour, votes and perpetuate a broken economy in the name of “jobs”.

    • Avatar

      Jobs can be guaranteed IF we build workhouses in every city, town and village. Back to the age of Dickens (and coal).

  5. Avatar

    No UBI
    More tafe colleges

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