Following on from Treasurer Scott Morrison’s underwhelming address to the National Press Club on Wednesday, the latest unemployment and underemployment figures for January bury his plans for any sweeteners he might wish to include in the upcoming May budget.
While October and November labour force data suggested things were looking up, December and January would seem to have at least partially corrected some highly contentious numbers.
Unemployment is back to 6%, up from 5.8 in December. Some 40,000 full time jobs were lost in January while 32,000 part time jobs were found. The net loss of 8,000 jobs has taken economists by surprise.
300,000 new jobs have been created since 2013 yet more people are unemployed now than there were in 2013. That means jobs have failed to keep up with growth, as small as that has been.
The unemployment rate in September 2013 was 5.7% with 697,000 out of work. The January 2016 figures are 6.0% and 761,000. That means another 64,000 jobs need to be created just to keep pace with population growth. They haven’t even delivered on that, let alone actually begin to decrease unemployment.
We now have 761,400 unemployed and a further 1,051,200 underemployed giving us an under-utilised labour rate of 14.3%. That is the spare capacity within our economy that if fully employed, would see us in very healthy territory regardless of what might be happening offshore.
If it were serious about jobs and growth, the government, as the currency issuer, has it within its capacity to employ our under-utilised workforce in a broad range of activities both in the public and private sector, paying a liveable wage, creating demand and gaining tax revenue, without any need to borrow.
As a sovereign currency issuer, it can do that. But it won’t. The economic activity that would follow if a further 1,839,300 people were employed and spending would transform our economy from its present flat, marking-time position to one of stunning vitality and innovation, a country on the move.
But that’s not going to happen. The flow-on benefits that would follow increased productivity, would include better health outcomes, less crime, less drug trafficking and more socially inclusive communities.
What responsible, caring government would not want that to happen?
The government must have a reason for continuing to tolerate such levels of unused resources. The most obvious reason is that they don’t want to spend beyond the level of taxation revenue, because of a false perception that deficit spending is bad. Such a view is counter-productive to the best interests of the population, because it fails to recognise the causes of unemployment, which is the lack of available jobs.
If the private sector can’t provide the jobs then the government is the only alternative. It’s not rocket science. We need to recognise where we want to go and what we need to do to get there, not be hindered by some archaic neo liberal belief that restricts us attaining our goals.
We need to stop thinking of government spending as wasteful when, in fact, it enhances our well-being. It helps us to become wealthy. Rather than use the word ‘spending’ we should be saying, ‘investing’. Try it. Spending equals exhaustion (spent). Investing equals opportunity for improvement.
Neither major party understands this. So the government concocts this half-hearted effort to give the impression that they are about jobs and growth when, in reality, they are not. They believe a pool of unemployed is necessary to keep a lid on wage claims and other perks that management take for granted.
Labor could adopt MMT (Modern Monetary Theory) principles, go to the people and say we have a better plan, explain how a fiat currency works and bring the people into their confidence, but they won’t.
And so we have this absurd situation where the media call the tune by forcing politicians into “gotcha” moments on how they will pay for their policies, a tactic that makes good television, but which causes great harm to economic management and our ability to have full employment.
And who benefits from this? The 1% obscenely rich who would still remain wealthy, but not to the same extent they enjoy today. We are governed by fools and for as long as the neo liberal view holds sway, the inequality gap will continue to widen.
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The old full employment dream and current work model is over. Automation and robot production will replace many current jobs. We need a new social contract in relation to defining how people occupy their time… and how the share of the common wealth is distributed. Instead we hitch a ride on the coat tails of last century’s juggernaut of over production, pollution and appalling inequality. Chasing our tails to oblivion and filling the world with shit.The very definition of insanity. I retain not a shred of optimism for the human race. Our hubris, selfishness and narrow self interest will see our demise. We’ve not long to wait for the conflagration. Will be an absolute miracle if we get to centuries end unscathed.
@Denisio Fabuloso ….. some very valid points there …..
@ flohri. Points that were raised in the 70s with the introduction of robots which would get rid of all the jobs.
Points that were raised in the 19th century when the steam engine was born and would take away all the jobs.
Take away the first two sentences from Denisio and I agree.
Totally agree with you Denisio, but production and consumption are what drive a capitalist economy… and sadly socialism has become a dirty word because nobody understands that a currency issuing government doesn’t need their tax dollars to fund spending.
Love the photo of the full jobs board; I haven’t seen anything like that for years. One of the outcomes of the Job Service Provider model has been the disappearance of a generally accessible job market. Individual JSPs keep their jobs a secret from the other providers and it seems they may pinpoint one or two job seekers to apply – they act like head-hunters. Individual job seekers have to do their own searching through the range of computer systems; many employers do not advertise to the public at large at all.
“Jobs & Growth”, what a croc! There will NEVER be “enough” jobs for everyone whilst the unemployment figures are so much higher than the number of vacancies! And with, almost daily, more of our factories & mines, etc closing down because of this free trade crap, where will all these people ever get jobs? I have not seen a “Full” jobs board, as pictured, it is probably from last century when we had the CES. At least there were jobs to be had, & people to help you find them, not like this “centerlink” rubbish we have now, where every time you front them with a query, or whatever, all “they” want to do is farm you off to a computer or to a ‘phone!
When are we going to get a Royal Commission into Trade Unicorns?
Didn’t we just have one?
Where do the major parties find their information and advice? If all they are interested in is getting or remaining in government then we have no hope. What we need is for them to want to im[prove things for the majority of Australians!
@ Backyard Bob.
That was just into how their feed was paid for.
And by whom.
And from how long ago.
Pretty much sums it up John good article! This current government will be there when we hit another global financial crisis and then try to blame it on the opposition!
How about the government being ‘innovative’ and invest in the badly needed infrastructure needed for this country, because that’s one of the ways that supplies jobs all the way down the line. Its the same as when we had a viable car industry.
I just wish we had a government run by people who are just looking after their own jobs & thought more about making sure that the good citizens of this country have a decent income (from a job) that will enable them to save a little & spend as well.
Seems quite simple really, but those in charge at the moment don’t have the ability that is required to make this happen.
I (and I know John has to) tried over and over again to get people on facebook interested in the truth of the basic facts behind MMT. (I think facebook is a good media because of its potential to multiply the message audience.)
To my knowledge I have been unable to convince anyone to even follow up and do the research to change the view that taxes are not needed for government to spend (invest)
It seems as if no one wants to know the truth as it will end the world as we know it!
I am about to start bombarding my MP, and other Labor MPs with questions about why they will not explain to the public how our currency realy works.
Because ot seems to me that they do not want us to know because, 1. They do not know themselves, or 2. They know but do not trust the public with the knowledge,
I the later is true then there is a much bigger problem than just ignorance, we have a problem where oir Labor politicians are assuming we are stupid.
Stephen Bowler: at the risk of sounding like a “stuck record” (old fashioned saying that will soon mean nothing to the younger generation), may I suggest that telling people that their taxes do not fund govt. spending is just too difficult for people to grasp in the first instance. Because taxes DO fund spending for State govts and also for countries like Greece and Spain, and everyone has been brainwashed into believing that this is true for ALL governments.
I have proposed that we start with the sectoral balances identity, which is completely independent of what the currency is. Once you can show that govt. deficits build our (private sector) wealth, while surpluses drain our wealth (unless we have huge trade surpluses), people begin to realise that all they have been told so far is not quite true. Only then are they receptive to further “enlightenment” regarding taxes, fiat currencies, etc.
I cannot even hope that this will work in all cases, but it should be one more approach in our arsenal. Perhaps you could give it a shot.
Not enough jobs? WE don’t need more jobs and with advances in technology they possibly won’t exist. What we need is a total restructuring of the system. A fair tax system that begins to bring the top and bottom earners closer. A living wage that allows everyone a decent standard of living whether they are employed or not and $2000 for passing “go” every year. An attitude from all governments that they serve the peole. Not business, not the economy…