Our economy has become one in which the demand for employment exceeds the number of suitable vacancies, writes Nicholas Haines.
IMAGINE A GAME of musical chairs with ten players and two chairs. The game has unusually high stakes: the players gain sustenance, purpose, wellbeing and much of their identity from occupying a chair. No matter how many times the game is played, the result is always the same: two players with a chair and eight players without.
The game master is distressed by the outcome — she wants everyone to have a chair. So she commissions several inquiries into how the game is played. The reports from these inquiries tell her to award contracts to firms who train the players in chair-seeking techniques. This doesn’t work. Next, she punishes players who fail to attend these training events. This doesn’t work either.
A few agitators point out that there is no shortage of wood and carpenters; they suggest hiring some people to make more chairs. The game master resists this idea as too good to be true. She renames and reshuffles her network of chair-readiness trainers. They produce Powerpoint slides with titles like “Landing Your Dream Chair” and “What Chairs Look For In A Backside”.
Job-seekers in our economy are playing this soul-crushing game of musical chairs. The structural problem is that the demand for jobs vastly exceeds the number of vacancies. Today, there are five job-seekers for every entry-level vacancy. We need an economy where the number of suitable vacancies exceeds the number of job-seekers.
Involuntary unemployment is a major cause of suffering in our world. Fulfilling, paid work provides a range of psychosocial benefits such as a valued social role, the experience of contributing to others, the satisfaction of mastering knowledge and skills and opportunities to interact with others in a positive way. Eradicating involuntary full employment is a necessary structural change that would promote people’s wellbeing.
Our employment services system frames unemployment as an individual failure. The proposed solutions are a pitch-perfect resumé, adroit interview skills and efficient job search techniques. The truth is that unemployment is a structural and systemic failure — it means there isn’t enough spending in the economy as a whole to employ everyone who wants to work. It is a problem that cannot be remedied by private firms.
Only the currency issuer (the Federal Government) can ensure full employment by filling the gap between current aggregate spending and the amount that would employ all job-seekers. Unemployment is also a moral failure in that the Federal Government deliberately keeps a percentage of the population unemployed as an inflation control measure.
Interesting and fulfilling employment should be a basic economic right. It should be available to all who want it. The only way to extend this right to absolutely everybody is through a job guarantee that takes job-seekers as they are. We need jobs that are designed specifically around the circumstances and abilities of the job-seeker.
A generalised use of fiscal policy is not enough because without a job guarantee, even a booming economy will fail to employ everyone who wants to work. Decent employment must be framed as a universal right, enforceable by law — a right that places a duty on governments to create the jobs that are needed.
Anything short of this will mean that involuntary unemployment will not be completely eradicated. Job-seekers with barriers to employment – disabilities, mental illness, long-term unemployment, substance addictions and other disadvantages – will continue to miss out if there isn’t a proactive program that creates suitable jobs on demand.
A job guarantee would eradicate involuntary unemployment. The only remaining unemployment would be the one or two per cent of the labour force who are moving between jobs (termed “frictional unemployment” by economists). In a fully-employed economy, there is no underemployment and no hidden unemployment. This radically changes the power dynamic between employers and the labour force.
In a fully employed economy there are multiple good job vacancies for every job-seeker. Employers compete vigorously with each other to attract and keep workers. Employers are so desperate for workers that they are forced to make their workplaces inclusive of people with disabilities, the long-term unemployed and other vulnerable groups. This is a structural change that we need to ensure that all people are completely included in our society. Technocratic tweaks are not enough; we cannot expect subsidies to employers to achieve inclusion.
Today we have a large workforce whose task is to manage the unemployed. Centrelink, jobactive providers and disability employment service providers are elements of this workforce. Instead of managing the unemployed, this workforce could be redeployed to administer a job guarantee. This workforce, currently wasted on unproductive work that keeps people trapped in misery, could become socially useful.
People who are sceptical of a job guarantee claim that it would be too administratively complex to enact. The critics overlook the fact that we already have the administrative structures in place — we simply need to redirect them.
A job guarantee would custom create jobs that fit each person’s circumstances and desires. Employers in the job guarantee would be not-for-profit organisations such as state and local governments, NGOs, social enterprises and cooperatives. The jobs would not displace private sector or mainstream public sector workers.
Employers in the job guarantee would have close links with other employers; they would actively want their workers to be poached by employers offering higher-paid jobs.
The jobs would advance public purposes:
- to respond to unmet community needs;
- to provide socially useful work to people who want it;
- to stabilise the economy (by minimising the size of fluctuations in the business cycle);
- to improve people’s skills, health, and productive capacity; and
- to widen our culture’s concept of what paid work can be.
We need to widen our imagination of what paid work looks like. We should be guided by social usefulness when we decide which activities are worth doing. We currently confuse two concepts that don’t have much to do with each other — what is productive and what is commercially profitable.
Public sector activity does not need to be commercially profitable. What we pay public sector workers to do is limited mostly by our imagination and cultural norms. Every unmet social need is a productive job opportunity. It is absurd to claim that there isn’t enough productive work to do when there are vast unmet needs in our communities.
Involuntary unemployment is a completely solvable problem. We need to stop treating unemployment as a failure of character and start seeing it for what it truly is: a system-wide failure that demands a structural response. A Federally-funded, community-administered job guarantee would ensure that even the most marginalised job-seekers get decently paid work whenever they want it.
Nicholas Haines works in the disability support sector in Brisbane, Australia. He has a Master’s Degree in Development Practice from the University of Queensland.
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