Has anyone else noticed the flurry of news about unemployment in Australia? The unemployment rate dipped below 5%, and now Julia Gillard and Tony Abbott have both announced measures to get the long term unemployed back to work/stop dole bludging (depending your political point of view). What the WTF? If unemployment is going down then why all the heat and light? I thought we were getting on top of the situation.
Gillard, in her speech to the Sydney Institute earlier in the week, kind of non-intentionally correctly identified the problem – “Our economy needs more workers…”. Apparently there are not enough workers in the system. And we know this because respected economists tell us. Steven Walters, Chief Economist for JP Morgan (yep the people that stuffed up the global economy with a few other wise asses a few years back), commented on the dip in the unemployment rate of 4.9%:
That’s a very strong number and much stronger than the market had expected. The unemployment rate is now below 5 per cent. We consider 5 per cent pretty close to full employment so clearly we’re bumping up against some capacity constraints and the big risk is that wage growth starts to pick up.
That’s right the problem is the Australian economy needs more workers because we are now at full employment or close enough to it, which means soon your wage will go up and you won’t be scared to lose your job. Scary! This 4.9% rate equates to 604,100 people. I am not fantastic at maths but I’m pretty sure that 604,100 does not equal 0. I would have thought we would be at full employment when the number of unemployed people equals 0, and getting close to unemployed did not equal a six digit number. Think about it another way – how ridiculously malice would someone sound if they said that the death by bush fire rate was down to 604,100 which is pretty close to the small number of people dying in bush fires being the problem?
Eva Cox wrote a sober analysis of the issue on the New Matilda website a couple of days back called “Stop Bullying Job Seekers“, and concluded that if you run the numbers we simply “do not have enough jobs for all”. This is not even counting the hundreds of thousands of Australians who are depending on casual or labour hire work – perpetually waiting by the phone for a call into work, knowing that if they miss that call or don’t drop everything and go in straight away then they might not be called back, never able to plan or save for a holiday, never able to budget because they don’t know how many shifts they will get to work that week. This is not even counting the army of Australians who have given up on even finding a job, “the discouraged job seekers”. This is not even counting those who are in work but can only find part-time work and need a full-time job.
Why is this so? Because it’s necessary to the way things are structured. There are many names for it from “the natural rate of unemployment”, “reserve army of labour”, “NAIRU” (non-accelerating inflation rate of unemployment). Heterodox economist Michal Kalecki foresaw the political rise of neoliberalism and its implications for unemployment back in 1943:
Lasting full employment is not at all to [business leaders’] liking. The workers would get ‘out of hand’ and the ‘captains of industry’ would be anxious to ‘teach them a lesson’. Moreover, the price increase in the upswing is to the disadvantage of small and big rentiers and makes them ‘boom tired’. In this situation a powerful bloc is likely to be formed between big business and the rentier interests, and they would probably find more than one economist to declare that the situation was manifestly unsound. The pressure of all of these forces, and in particular big business, would most probably induce the government to return to the orthodox policy. (Jim Stanford, Economics for Everyone, p. 104).
So the short answer is that there is a crisis of employment because capital wants to avoid full employment. Capital needs more workers – not to gainfully employ mind you – but so it can beget more capital. Think about the human cost of this for a moment.
An unemployed reader, “pan.sapiens” left a comment to Cox’s article:
-Re. unmotivated jobseekers (“doll bludgers”), well frankly, in so far as such people exist, I am one. I am post-grad educated. I have a bunch of practical skills which would be highly useful to employers whom I approach. Yet I virtually never get an interview. When I do I am treated with derision and even hostility by potential employers when they realise that I am a older than they expect for entry-level positions, don’t have the 3 years mandatory recent experience in the exact same role expected for more senior positions, and am long-term unemployed. It has gotten to the point where even where I have done the EXACT SAME JOB before (for a different company) I don’t get a look-in (usually because I am now “over-qualified”). I’m not lazy -e.g. I have done (and still do) volunteer work for as long as I have been unemployed. I’m not a job-snob either -I have applied for jobs as menial as stacking shelves, moving boxes and sorting garbage. No luck. Consquently I have now given up, despite the fact that I am facing serious financial hardship. The ironic thing is that, as much as I resent govt. constantly interfering in my life with mutual-obligation requirements, contact interviews, etc., I really NEED assistance from government (or SOMEBODY) to get someone to give me a chance. I don’t see it happening though, and can only await the day when I get to buy my 2-minute noodes and dollar-bread at Coles with my “bludger card” (“income management”) rather than cash. The thing which scares me most at the moment is losing my present accomodation -which would leave a boarding house or homelessness as my only options, in which case my two dogs (my “family”) would have to be euthenased by the RSPCA. I know I am not alone in my position, as I know others in similar circumstances (i.e. educated, experienced, long-term unemployed and now regarded as unemployable). One thing in particular which drives me mad is that a few years ago when I had fewer qualifications and less experience, but was young enough to still be regareded as “young”, everyone seemed to want to give me a good, well paying white-collar job (silly me for deciding to persue an education instead, eh?).
…anyway, rant over. I just hope Julia and Tony give some thought to people like me, who are skilled and capable of work, and who want to work, but who don’t get any chances in today’s unsympathetic and hyper-competitive Australia.
There are 604,099 more stories like this in Australia today – one of the richest countries in the world. That’s 604,100 wasted lives.
The real tragedy is we live in urgent times. There’s much we need to do to shift to an ecologically sustainable economy, one that we can proudly pass to the next generations. Each day that goes by is another wasted as the clock ticks closer to midnight. It’s time we made capital work for us. Rather than jamming people into the machine and sweeping up the off-cuts.