[Last May, Prime Minister Keating commissioned the Committee on Employment Opportunities to produce a discussion paper on "Restoring Full Employment". Made up of top-level officials and academics, the committee produced its Green Paper in December. Responses are due by March 11. The following is an abridged version of the submission by the radical youth organisation, Resistance.]
Resistance believes that with its Green Paper, the Committee on Employment Opportunities has closed the door on any real program of fighting unemployment.
The committee's stated goal of at best 5-7% unemployment by the year 2000 redefines the whole concept of "full employment", and in effect eliminates it as a goal of policy.
The committee's strategy is two-fold. First, and by far most fundamental, is the continuation of free market policies ostensibly designed to bring about a return to economic growth. Second is an initiative to cycle the long-term unemployed through low-paid jobs of six to nine months duration. Job creation is explicitly ruled out.
The committee forecasts that to achieve unemployment rates of 7% and 5%, gross domestic product would need to grow at 3.5% and 4.5-5% each year until 2000. Such growth rates could be achieved only:
- if competitivity in Asian and international markets is maintained and increased;
- if labour productivity increases;
- if there is little rise in nominal wage costs;
- if the government's deficit reduction strategy remains;
- if low inflation rates are maintained;
- if international markets remain relatively stable;
- if corporations continue to enjoy high profit levels;
- if investment and savings levels rise.
This is a lot of "ifs".
The committee's projections are centred on corporate profit levels. They are aimed at increasing productivity levels, export revenue and therefore growth levels whilst simultaneously holding down inflation. The only way that this can be done is at the expense of the work force — through wage increases lagging behind increases in labour productivity.
Who benefits?
The way the Green Paper presents it is almost as if we can only have either high unemployment or lower wages. At the moment we have both and we want neither.
What is the point of economic growth if it only enriches a minority at the expense of the majority?
"Austerity" in the '80s led to average growth rates of 4% and a certain amount of new jobs. It also led to an increase in poverty — from 10% of families living in poverty to 13%. Average award rates of pay declined 20%.
The benefits accrued to large corporations and the already rich. In 1982-3, the wealthiest 1% owned as much as the poorest 11%; in 1989-90 they owned as much as the poorest 21%. Between 1983 and 1990, 10.3% of GDP was transferred from wages to profits.
More austerity will continue these trends. This will have a major negative impact on young people, single parents, people from non-English-speaking backgrounds, Aboriginals and Torres Strait Islanders.
Resistance believes that allowing corporate profitability to determine policy and investment is neither necessary to achieving employment growth, nor beneficial to the majority of people. What is profitable is generally not what is useful socially.
Jobs Compact
The Green Paper proposals include a Jobs Compact whereby the government agrees to place the long-term unemployed in full-time work for between six and nine months.
The program will follow the pattern set by Jobstart, in which employers are given major subsidies for taking on participants in the scheme. Participants will probably receive a training (ie substandard) wage.
The program will prove a major boon to employers, who receive cheap labour and large amounts of money from government, with no obligation to provide employment when the period is completed. Figures on Jobstart show that only 30% of participants still had their jobs three months after the end of the subsidy.
Jobstart figures suggest that only 15-20% of positions were actually new jobs. The rest were jobs taken from workers who would otherwise have been paid award rates.
The Jobs Compact aims to provide work experience so that the long-term unemployed maintain a certain level of competitivity on the jobs market. The de-skilling caused by long-term unemployment is decreasing competition for jobs. Reversing this would mean increased competition for the same number of vacancies, forcing wages down.
Resistance's proposals
Resistance's proposals for fighting unemployment involve a massive jobs creation scheme:
- rebuilding and repairing decaying infrastructure, schools and hospitals, suffering from a decade of cuts to funding;
- a massive drive to build new schools, hospitals, child-care centres and other utilities;
- a major effort to clean up the environment;
- institution of shorter working weeks without loss of pay;
- a major effort to rebuild the public sector.
These would not only create employment but would meet social needs and help increase living standards through better rates of pay and more expenditure on the social wage.
The federal government should be able to guarantee every person in this country a job which is socially useful and decently paid. Those people who can't be guaranteed work should at the least be guaranteed a minimum living income.
Such proposals would require major revenue initiatives, aimed at raising taxation for those who can most afford it:
- increasing corporate rates of taxation;
- decreasing expenditure on arms and defence;
- putting an end to the massive handouts to business;
- tightening the Fringe Benefits Tax, inheritance tax and wealth tax;
- instituting new taxes such as taxes on industrial polluters.
Resistance rejects any idea of a jobs levy as inequitable and an attempt to shift the tax burden onto working people. What's needed is a readdressing of expenditure and revenue priorities rather than a new tax on the incomes of the majority.
But such proposals would be really able to guarantee full employment — that is, decently paid and useful work for all. The proposals in the Green Paper would do exactly the opposite.