Job Guarantee Summary
A Job Guarantee is an unconditional offer of a full-time, minimum wage job from the government to all Australian citizens. The type of work is determined by local government so as to best help the community while not competing with existing private sector jobs. The funding itself comes from the federal government. A worker can stay in a Job Guarantee (JG) position as long as they want – permanently, or as a temporary way to stay afloat between other jobs. The hours per week are also up to the worker, ranging from a few hours to full time.
Why do we need this?
Society dictates that the basic necessities of life such as food and shelter cost money. It asks that people work for money, and as such it has a moral obligation to ensure that a job is always available. The private sector will rarely provide enough jobs for everyone. Therefore it is the responsibility of the government to provide its citizens with an employer of last resort, and the most effective way of doing that is by providing a job guarantee.
How is this different from “Work for the Dole”?
Work for the Dole is designed to be punitive, is coercive, and pays below the minimum wage. A Job Guarantee is designed to provide dignified, useful work for those who want it, and will pay minimum wage. The goal is not to kick people off unemployment support and into “real” jobs with forced labor, but rather to offer a job itself.
Where will the money come from?
In July 2013, there were around 700,000 unemployed people in Australia. If all of them were to immediately accept the JG offer, and the yearly minimum wage for an individual was $33,000, the total cost to the federal government would be around $23.3 billion per year. In 2012-2013, unemployment assistance was $8.5 billion, most of which would no longer be needed to be spent. This means the JG would require an increase in government spending of approximately $14.8 billion. Total government expenditure was close to $400 billion, so this would represent an increase in spending of about 3.7%. Considering this would be the difference between a society with 5% or 6% of people out of a job and a society with zero involuntary unemployment, the benefit to the country would far outweigh the cost. This is not even taking into account the very real daily losses of wasted labor in keeping large sections of the population relatively idle. There is also an economic argument that these budget costs are not a true cost in the sense that they represent a sacrifice on society’s part.
Is there enough work for everyone?
There is a huge range of potential work to be done. Examples include helping the elderly, keeping the community clean, railway maintenance, environmental rehabilitation, public works construction, etc. Most of this work is unprofitable, and something the private sector would not be interested in. Even if basic services were fully provided, there is always something more that can be provided to improve the quality of life in any community, such as organizing local events or creating public art. Any reasonable council would quickly find a productive and creative task for idle workers that can benefit the local community.
Won’t this take jobs from people in the private sector?
The jobs provided will be ones the private sector finds unprofitable, but that are still socially beneficial. It is important that the work done does not disrupt the existing economy, and does not compete with services private companies provide. As such, JG workers will not be asked to do work for a private company, or work in any kind of commercial role. There will be no grocery stores or retail shops operated by JG staff. However, people working in the private sector could still choose to quit and work for the JG if they chose, but the work will be substantially different.
Why minimum wage?
The JG is constructed to hire from “the back of the line”, employing people the private sector is not currently hiring. This lessens the disruptive impact of the JG. One interesting effect will be that whatever wage the JG sets will then become the de facto minimum wage. If the JG wage was higher than that of fast food workers, for example, most of them would quit and join the JG, forcing the fast food companies to at least match the JG wage, or improve working conditions enough to make up for lower pay. Very soon there would not be many private sector jobs that pay less, thus making the JG wage the unofficial minimum for most of the labor market.
What if I can’t or don’t want to work?
There is absolutely nothing coercive about the JG, and signing up would be purely up to the individual. People who cannot work due to disabilities should always have access to income support. Plenty of empirical research shows that when given the option to work, most people would rather work than not. A fair society should still have some room for voluntary unemployment – how much and for how long is a debate that needs to be had. However, we cannot resolve who is unemployed by choice and who is out of work because of a poor labor market. The only way to truly know is to offer everyone a real, dignified job, then we can decide as a society if we wish to support people who do not want to work. Until that happens, those who are involuntarily unemployed will be unfairly demonized by the media and politicians as not trying hard enough.
Has this ever been done before?
Several “employer of last resort” schemes have been implemented, most with conditions on the job offer. In 2002, Argentina launched their “head of households” programs, where a nominated worker from every household was offered a job. Before the program, their economy was shrinking by 8% a year, and after implementation, it was growing by 10% per year, and unemployment dropped from 20% to 10% in 2006. India has been running a rural job guarantee since 2005, and although it has had trouble with corruption and institutional inefficiencies, it manages to employ around 50 million people a year. South Africa has an “expanded public works programme” that is offered to disadvantaged sectors of the population, but has had limited success due to rationing of the numbers of jobs it provides.
For more details, a report is available that lays out in great detail how a Job Guarantee can work: