Faced with a sharp rise in unemployment since 2008, the Con-Lib government in Britain has diagnosed an epidemic of laziness, and announced measures to push the “work-shy” back into jobs. In particular, they’ve announced that those deemed not to be looking hard enough for work will be forced to undertake unpaid part-time work for community organizations.
Stripped of the punitive rhetoric, this is a cut down job-creation scheme, partly paid for by the unpaid labor of the participants. It’s hard enough to make job creation work well as a counter to unemployment, without adding in this kind of thing.
Australia has been there and done that. Following the discovery in the late 1990s that it played well with focus groups, John Howard (conservative PM) introduced a program explicitly called Work for the Dole and targeted initially at the young unemployed. It was a political success, but didn’t have any evident effects on unemployment. This evaluation of Work for the Dole and other programs suggests that it performed much less well than the explicit job creation and wage subsidy programs it replaced. Strikingly, given that the UK government is supposed to be on an austerity drive, the cost in the late 1990s was $2000-3000 per participant (around 1000 stg), on top of the benefit payment for which they were working.
But at least Howard’s moves came quite a few years into an expansion when it could credibly be claimed that there were jobs available for people willing to look hard enough. For a government that is busy creating unemployment to start attacking the “work-shy” requires a truly impressive level of hypocrisy.
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John Quiggin 
In, the nineties, I read “Work for All: Full Employment in the Nineties” by John Langmore and John Quiggin. I found myself in substantial agreement with the authors. What I find dispiriting is that over a decade later, few or none of those good ideas have been implemented (in Australia or elsewhere). Instead, the same old tried and failed right-wing ideologically driven unemployed-bashing policies continue to be applied ad infinitum. The same blindness to the reality of market failure persists. I guess it’s the same old thing of the right wing zombie ideas (about the magic guiding hand etc) that just won’t die.
There should be adequate systems in place to encourage people strongly to return to the labour market. Government benefits are not something which should be encouraged or entrenched for any extended period of time, otherwise it will cause damage to society over the long run through lower participation and higher costs on government.
I suppose it is much easier to kick down instead of kicking up.
I’d rephrase Rationalist’s first sentence by saying we need an economy populated by people that can cope with the idea that the great majority of people like to be productive in their life and this entails having opportunities to work in at least their third preferred occupation for at least a significant number of years and these occupations should pay enough to live without having to ask for hand-outs.
@Rationalist
That’s a broad comment Rationalist. What do you mean by adequate systems?
@Ikonoclast
A bit of carrot and a bit of stick.
Low EMTR’s are a good start. Low taxes in general are good too.
On the stick side of the equation, I am not sure since I haven’t really thought about it. One thing that I find ridiculous which is somewhat unrelated is that the aged pension is indexed to wages while other benefits are indexed to the CPI. All government payments should be indexed to the so called “pensioner and beneficiary living cost index”.
Work for the Dole has its equivalent in indigenous communities – CDEP – now limited to remote communities, where it continues to be the major labour resource for community councils and Aboriginal corporations struggling to cope with the maintenance of infrastructure, housing and public spaces.
The ICC (the Federal body managing funding to remote communities) is apparently softening up communities like ours (on CYP) for the eventual imposition of Welfare Management and Family Responsibility Commission arrangements, by insisting that participants undertake training to prepare for employment.
Aboriginal people are only too happy to have training and most would gladly accept a job. The problem is that there are no jobs, and nothing that the Federal or State authorities are doing is facilitating the growth of economic activity that we need if we are to employ people.
In fact, the land acquisitions for native title and conservation, which I support in principle, are apparently structured to suppress economic development.
For most, the only realistic chance of a job involves a move to Cairns or other towns larger than our little communities, and there, they know full well, they would simply be joining the thousands of other young indigenous people on the dole queue – fine young people with enormous potential, but objectively, little hope of employment.
So they stay here, and I can’t criticize them for that.
@Ron E Joggles
We could start by being really honest about the unemployment number Ron E. Its not just fine young indigenous people full of promise. Its fine young white Australians full of promise too BUT not enough bloody jobs. The unemployment rate for 15 to 19 year olds is 19% or so.
This is BS. Considering a whole generation of school leavers last year got wiped out of the number. How? To get unemployment benefits, they have to use up theior savings (not in stat untill savings used up): To get unemployment benefits they have to be “in training”. Once in training, they get benefits but arent in stats.
The unemployment number is total BS. Why has the ABS started the “underemployment” series? To show that casual employment ie marginal attachment to the labour force is now rife in this country (one casual shift or two a week). Thats BS and its happening to a lot of young people – yet today I read in the SMH we “are close to full employment”.
Lies, lies and more lies and BS statistics. We are not even close to full employment.
Not for indigenous youth. Not for non indigenous youth. Not for any youth. Its a damn disgrace. I dont criticize then for that either. It cost money to travel to Cairns to look for a job and join a long queue and not get one because there isnt enought jobs for youth.
There isnt and the givernment needs to take a long hard look at why not. Its a policy and government failure (but then we are all getting very used to government failures and lies arent we?)
@Alice
Some people, especially young people, are being priced out of jobs by onerous wages and conditions. The removal of Workchoices has ensured this to be the case. For these people to gain jobs once again, they either need to develop skills such that they are no longer priced out of a job or legislation must be introduced to allow these people to compete by lowering the price of their labour.
@Rationalist
Some people are being priced out of jobs because the jobs have been sent offshore under all this globalisation clap trap too Ratio. Did you know its a responsibility of the Rserve Bank to maintain full employment? I wouldnt mind but all they do is fiddle with interest rates and ignore unemployment while ever they can figure out a new way to fudge the number.
Ratio – Australia is getting very expensive. Its also getting very hard for our kids to get a decent working life that doesnt involve outfits like JB hi Fi acting as kid factories using every permutation of the word casual to screw kids.
Dont giveme bunk about onerous wages and conditions. many are being paud peanuts (I mean peanuts) ion casual contracts. Wages are only onerous in Australia compared to what Ratio?? Slavery? Third world wages? The wages of desperation?
Workchoices helped bring the wages of desperation here and the people didnt want it full stop) and it still isnt gone which is why they are pretty annoyed with the Red head.
“Workchoices is done and dusted” to quote her except she only “half done it and didnt bother dusting”.
I seem to be in permanent moderation at Crooked Timber, rather undeservedly, so can’t comment there. But I wanted to point out that nonprofits may not welcome an influx of resentful conscripts. Managing volunteer workers is generally a drain on staff time, as they tend to be untrained, and sometimes untrainable, and need a lot of supervision and usually the work needs redoing, in my experience. It’s a huge overhead for organisations that are usually understaffed to begin with. It would not be surprising if few nonprofits signed up for workers under such a scheme.
@Alice
It isn’t me suffering from the roll-back of Workchoices, I am doing just fine. It is the people you speak of which are suffering since they can no longer price themselves into a job.
@Emma
It shouldnt be up to non profits to deal with an influx of unpaid volunteers Emma. The problem is paid jobs. People wouldnt sign up to be resentful non profit workers on semi voluntary wages if there was something better paid they could get. Sign of the times. Its profit we want – domestic based profits – not globally shifted profits which disappear.
@Rationalist
No – its not you Ratio – you are doing just fine. The others who dont have work dont deserve it because they have willingly chosen to price themselves out of a job. Try telling that to the unemployed who darent even ask what they will get paid.
Im glad you are doing fine Ratio – you must have your price signals just right.
Think of the massive reduction in unemployment that would result if all these teenagers now making an “onerous” $8 as could just be making $6 an hour as “independent contractors” under Workchoices. Plus if I knew I could just fire her for not going down on me, I’d be way more likely to hire her in the first place.
On the other hand, why not go the whole hog? Workchoices is great, but there’s nothing like a good old-fashioned Corvee. Legislation must be introduced to allow these people to compete by lowering the price of their labour – to zero.
*that should be, an “onerous” $8 as employees
(I remember reading a friend’s contract for “casual” call-center work, which contained a line that read something like, “nothing in this document may be used to construe that the signatory is an employee of the company”). Perhaps legislation should be introduced that bans the entire category of “employee”.
@gerard
Gerard,
one thing is you mustnt forget these chain store kd slavery camps like JN hi fi, rebel sports (there should be a name and shame here) – sont even give these new kids looking for work a second year….why? Because they dared to have a birthday and they can use younger Xmas casuals all bright eyed and bushy tailed and straight out of school.
What a lesson is this for new workers…. what idiots not to work for? (JB hi fi). I know a kid working for JB. He got called in 6 ks from his home to go in for a two and a half hour “all staff” meeting – all floor kids, all counter jockey kids and all warehouse kids – all kids in fact. His reward? A slice of pizza and no pay – his work status? One or two shifts a week when they felt like it.
There really ought to be a law against this. It should be called workcrimes.
I would have told them to you know what.
Rationalist seems to be proposing the same old policies which have failed us for years. These are in essence low taxes, low wages and taking some “stick” to the workers. Rationalist says there should be some carrot and some stick. However, there seems to no carrot in his actual proposals. They are all stick; namely low wages and the low services implied by low taxes.
Alice is quite right that the unemployment statistics are fiddled outrageously to give the current spurious figures. A number of government programs are designed to hide the real unemployment and underemployment numbers. This is how corporate capitalism and its close cousin managerialism manage problems. The same old failed policies are continued and their self-measurement of performance is rigged to give the illusion of success.
I call these policies failed policies because they fail to maximise utility for the majority and they fail to protect and sustain the environment which is the base for all production. These policies do succeed for a minority who become wealthier, in the interim, as our overall society and environment become more impoverished. This is not sustainable in the long run of course.
As someone pithily put it, gated communities won’t save their residents from climate change, resource depletion and widespread civil unrest. That is where we are heading unless we change course.
Melbourne researcher Marcus L’Estrange has written frequently about how absurdly low the official unemployment figures in Australia are, compared with the reality out there in the community. Here’s an example (on the Henry Thornton website, of all places):
http://www.henrythornton.com/article.asp?article_id=4182
As early as 1993 John Howard (then Opposition spokesman on industrial relations) said to L’Estrange: “Marcus, I know the real unemployment figure is 20% but I cannot afford to be honest. If I was honest people would become depressed and spend less thus creating even more unemployment.”
But what else can be expected, when successive governments (Liberal and Labor) adopt the pretence that having, say, three hours’ work in a week counts for statistical purposes as being “fully employed”?
All of these millions of unemployed who are hidden from the statistics, what skills do they have?
On this topic, the Australia Institute says that Australians are doing $70 billion worth of unpaid overtime annually, while most part-timers and casuals are desperate for more hours. So I’d suggest the answer to Rationalist’s question is that they have skills that have been underemployed in the market because they’re competing against free surplus labour by the already employed.
I believe our host JQ wrote something somewhere about unpaid overtime being the real payoff of “microeconomic reform”, which was disputed by other economists at the time. I hope he is feeling vindicated.
Rationalist should know that a whole bunch of microeconomic studies have shown no relationship between minimum wages and unemployment, something that comes as no suprise to anyone who has read Keynes, or Sraffa, or anything beyond “Economics for Sociopaths 101”.
There is no possibility of creating jobs under competitive market capitalism. All we can do is seek that the public sector taxes super-profits and then use this resource to produce adequate employment.
Of course their are plenty of jobs and training needs in isolated rural communities. However these areas miss out on employment opportunities because there is no opportunities for profitable capitalist investment. So these communities are left to rot as in 18th century English rural communities.
I presume a 33% tax on banks’ super-profits will provide funding for all the jobs you need in remote indigenous areas.
But then the friends of capitalism will ensure that this never happens. You just have to review the antics of the Green paper, White paper process (1994), and the failure of the Accord, and dismemberment of its structures, Worksafe, TUTA, EPAC, NBEET, to see how much capitalists can defeat any good intention by change of government and policy corrosion.
If super-profiteering capitalism produces unemployment, then obviously, the public sector has to produce employment. Its that simple.
You do not need acres of Taskforces, Committees, Quangos and so on.
Work-for-the-Dole was an ideological program. However Work-for-a-minimum-wage, might be a useful substitute.
,
@robert (not from UK)
Robert – you are exactly right on the absurdity of the unemployment number. That is precisely why the ABS commenced its series examining underemployment and the unemployment number should never even be considered without taking the underemployment figures into account. Furthermore if they counted unemployment in the United States the way they measured it after the great depression – you can double it from 10 to 20% and in a lot of states its closer to 30%.
The unemployment number is utter rubbish but whats even worse is that they use this spurious figure to calculate full employment as well – so now we see that Australia is apparently approaching full employment again. Absolute furphy parading as economic statistics in thic country and once again being used as a basis to cut government spending, privatise public assets and hammer on and on about fiscal austerity measures to reign in a deficit of their own creation through lack of attention to job creation.
Zombies – we are still be governed by zombies and it doesnt matter which major party you vote for in any state or federally. There is only one alternative and that is to vote green until the major parties, with their zombie policies and zombie patter, haemorrage power.
BTW Prof – nice article in SMH today and I agree – there will be no reanimating the Zombies of NSW State Labor.
@Chris Warren
What a foolish idea, why tax some of the most productive institutions to inject capital into some of the least productive areas? Such a waste.
@Rationalist
This site is worth investigating, Rationalist.
http://e1.newcastle.edu.au/coffee/
Check the data collected by people who are conducting empirical investigations of the situation. Read the careful way they analyse the data and argue their case.
It does indicate that Australia’s labour under-utilisation is about double the official unemployment rate. Official unemployment is over 600,000 so our current labour under-utilisation rate is the equivalent of 1.2 million unemployed people.
I dont have detail on the skills issue without further research. However, I doubt that a significant number of vacancies remain open in Australia for lack of skilled people to fill them.
The USA follows the policy prescriptions you advocate, Rationalist, much more stringently than Australia and their official unemplyment is double ours. Their labour under-utilisation is in the twenty percents. Methinks the evidence of the real world outcomes trumps your blind ideological advocacy of bad labour policy.
@Rationalist
You appear to be confusing “profitable” and “productive”. Rent seeking is extremely profitable, but a drag, not a spur, to productive activity.
@Rationalist
Extreme naivety here. Both the degree of monopoly and barriers to entry into banking mean they receive super-profits.
If the sector was more competitive with more suppliers, then more banking services would result. However under this regime the extra unemployment would occur in towns and cities which is not where the hard-edged problems are. So maybe taxing the super-profits down to normal profits level, and then use the funds to boost national happiness, could be a better mechanism.
Bill Shorten’s bizarre little effort, recently on ABC’s Q&A, excluding banks from a super-profits tax, was typical of the rightwing approach of some ALPers.
@Chris Warren
Ive just discovered evidence of more little user pays initiatives and cutting of public services by right wing Labor at NSW level Chris. Once upon a time not that long ago you could go down to your local court take a ticket and get a free appointment to see a chamber magistrate for legal advice on a local court matter (what the court will consider, how to present your evidence, how to address letters, and magistrates etc).
Well – the chamber magistrates free appointments are all gone – replaced with a website called “law access” who state clearly “I am not giving you legal advice” as soon as you call…but who, however, can refer you to local private solicitors.
No doubt.
Another useful public service cut by NSW Labor. Im almost beyond even detesting NSW Labor. They are simply a joke.
@Chris Warren
However, as economist Steve Keen points out (correctly IMO), more competition in the banking sector will not help our deeper economic problems. This is because there is already too much debt in the system. The last thing we need is more banks pushing more debt. As Keen says, we need to find a way to deleverage without putting the economy into a coma.
The excess debt is in part the response to poor wages. If wages had been kept higher, then pressure to borrow would be less and the economy could generate demand without resorting to the continuing debt fix. The excess debt has fuelled little of productive value. Instead it has just created an inflationary asset bubble.
NOT working for the dole sort of flies in the face of “a fair day’s work for a fair day’s pay”.
Were I to be given money from the government for doing nothing, I would be embarrassed, ashamed & demeaned by it.
Being allowed to work for this money may allow some reclamation of pride.
@Ikonoclast
Wages could have been kept higher Ikon – if the governments of industrialised nations hadnt decided to play Mary Poppins with peoples life savings and forcing them and companies to rpovide for their retirements in managed super funds which went entirely to the financial sector (pemitting the financial…aka gambling sector… to turn into an obscenely fat grotesque parody of itself in many western nations until the fattest and grossest of all gambled us into the GFC for want of something productive to do with ALL THAT SUPER MONEY.
Its so obvious its shameful. In trying to be Mary Poppins the Nanny with a big stick the governments of industrial nations have impoverished us.
Time and time again. Mandatory super is just “picking winners and fattening them” by any other name. Except they have now caused a monumental crisis.
The government should just stick to income taxes and spending for social infrastructure and MYOB everywhere else. I dont want to be told what to do with my savings. I wantr it now as higher wages. Ill decide and I dont want trhe government deciding whats good for my retirement. They have stuffed the entire financial sector up and more in favour of executiveswho have ripped billions out for themselves.
Though they were doing us all a favour? How nice, now go away and run some public trains on time.
Working for the Dole is not a fair days work for a fair days pay. You should be embarrassed, and ashamed for implying this is so. You are demeaned.
Working for a minimum wage doe not fly in the face of fair pay. Presumably this is what you were intending.
not really as the work you do will be useless and incredibly inefficient – in that sense much like normal paid work. The critical issue is the socialisation that goes on – from which positive benefits flow compared to sitting at home.
Those without pride are welcome to collect money for nothing. Just don’t expect me to share your character flaws.
Bludge on society all you wish. You won’t be respected for it, but that means nothing to those without self-respect.
@Steve at the Pub
Society needs to have pride in how it ensures social justice for all, and not let winging drunks in pubs tell you otherwise.
Unemployment is not caused by bludgers and the biggest collections of money for nothing are by loan sharks and corporate executives.
@Chris Warren
Chris – SATP is just as likely to support people working fror the dole in case he gets some unpaid volunteers/ ?trainees or subsidised apprentices who can lower his already cheaply paid casualised workforce who possibly only get a shift or two from him a week if they are lucky.
Working is not just about self respect SATP. Its also about respect by employers for their employees. Blaming the victims of unemployment now after the GFC is really shabby. I wonder if some low paid employees have left your pub with not much respect for you?
@Alice
Yes
By getting cheaper workers operating beer taps and serving behind hotel counters, those like Steve-at-the-pub, get cheaper beer.
And that’s all they care about. Their gains are based on others losses, particularly the unemployed.
Difficult to know if you pair are really that stupid, or if you’re just trolling.
Until you demonstrate some common sense, decorum & etiquette, it will remain stupid.
How did you learn to type?
@Steve at the Pub
I learned to type by having lessons on a poker machine. I dont think you have finished your typing training if length of (your right wing blame the victim) commentary is anything to go by SATP.
Alice, you aren’t the sharpest knife in the drawer, but even you would have noticed I blamed nobody.
Regardless of who is to blame, there is no pride in receiving handouts.
Your snark about my motivation being to get upaid or subsidised labour is unfounded.
Your statement that my workforce is “already cheaply paid” and “casualised” is something you cannot possibly know.
Thus not only are you stupid, you make stuff up.
Well SATP, (underneath all that bluster) IS your workforce “cheaply paid” and “casualised” as speculated upon by Alice ?
Paul, have you stopped beating your wife?
Not married.
@Steve at the Pub
Most would recognise pubs and clubs using cheap labour SATP – dont you want to answer Paul’s question?. I merely made the observation that as a pub owner you might just be more interested in people working for the dole than the huge amount of people in recessions who become unemployed by a cyclical movement of the economy, rather than anything of their own doing SATP. That isnt so people like you can cast aspersions on their willingness to work, their self respect or throw brickbats at their “laziness” I know who isnt the sharpest tool behind the bar. You are sounding very much like that other job snob Tony Abbott (he lost his).
missed a sentence above – oh well from one blunt tool to another Im sure SATP will get my drift.
Im absolutely sure the majority of handout recipients indeed feel no pride whatsoever in receiving unemployment benefits SATP counter to your suggestion they do.
Huge problems, including building sustainable energy and transportation systems. Huge underutilized resources (unemployment). It looks to me like casino corporate economics (based on short term “casino” speculators and profit-seeking leviathons in an economy based on limited resource scalping and world-destroying externality dumping) has brought us to the precipice with inertia that looks unstoppable.
Looks to me like this jig is up. Start thinking in terms of command economics.
Alice, Paul’s question got all the answer it deserves.
Comment #43 is an adaption & rephrasing of my comment #29. So why the knee-jerk, unprovoked, ill considered, (& stupid) attack on my character? You just agreed with the essence of my initial comment.
@Steve at the Pub
SATP – refer to your posts at 29 and 33. Not the most considered responses to the problem of unemployment. I also am in agreement with IKono – working for the dole is not a fair days work for a fair days pay especially when an individual must exhaust almost all of their savings these days before they become eligible. The helping hand of welfare for the underprivildged or disadvantaged in this country has in indeed become a much meaner stingier helping hand in the last few decades (yet the subsidies to private placement agencies could have been better spent on maintaining centrelinks job network and supporting the unemployed) and people who object to any welfare help on the grounds that the unemployed “deserve to be kicked” dont impress me one bit.
Others who likely would carry similar views to yours SATP have already made money on tax cuts and spending cuts from Welfare cuts. Perhaps in reality some at the extreme end would prefer the unemployed worked for a bowl of soup because “it would allow them to reclaim their pride”.
Nothing would surprise me. We have all heard the whingers whinge.
I just object to the blame the victim mentality and Im sure you learnt the best of these responses under the previous federal coalition government who excelled at it, whose views you have supported in many prior posts. Dont pretend to be something else more moderate now SATP. Its even worse to backpeddle or sidetrack.
Alice, unlike you, I haven’t changed my position.
Being paid money for nothing is rather a bludge, and for those who have a spine, rather hard on the pride. Being paid money for doing something would mitigate the sense of worthlessness that comes from existing on handouts.
I would choose to work for my money. Those with a heart the size of a pea are free to just accept the money. But they won’t be earning any respect.
Respect, even self-respect, is an alien concept for some, & I don’t expect all to understand it. Only those who are among the sharper knives in the drawer.
I was commenting on the matter of working for the dole.
I wasn’t commenting on unemployment in any way. Had you read my comment you would have noticed that, I suspect you skimmed mine, read the subsequent juvenile comment, then without stopping to think, made an ill conceived response.
@Steve at the Pub
I know rednecks are pretty dumb. But I would expect that at least a few of them would know that if only unemployed work for the dole, then commenting on working for the dole is commenting on unemployment.
Maybe some Tory-liberal is dreaming of putting minimum wages onto a Dole level, but until then, this pub’s got no beer.
Chris Warren: Nearest place you’ll see a redneck or someone pretty dumb is in the mirror.
Comment on how one feels about working for the dole is in no way “heavy with messages” about causes, philosophy of, or much else about unemployment.
Stick to high level theorisin’, you seem pretty good at it.
Fer gawd’s sakes don’t ever expect anybody to understand your second paragraph in #49. Then again, it WAS written after 5:00 p.m. 😉