Why the federal government won't talk about a lack of jobs

STRUCTURAL: The truth is that unemployment is inevitable, if not planned for, in a modern economy. Picture: B-E/Shutterstock
STRUCTURAL: The truth is that unemployment is inevitable, if not planned for, in a modern economy. Picture: B-E/Shutterstock

The 1945 white paper on full employment, produced under Labor Prime Minister John Curtin, directly acknowledges that in a market-based capitalist economy, there are winners and losers.

As such, it is considered the obligation of the government to support those who fall on the wrong side of the line.

This policy approach led to unemployment plummeting to below 3 per cent, despite waves of immigration across the late 1940s through the 1960s.

In the 1970s, things changed. A number of shocks - including the oil price shock stemming from the 1973 Arab-Israeli War - led to inflation rising, and so too did the unemployment rate.

At this point, the Australian government abandoned the "full employment" policy, and shifted towards focusing on individuals' employability, with policy priorities no longer about managing employment and instead focusing on managing inflation.

This led to a reframing of policy talking points to welfare dependency rather than the lack of jobs - sound familiar?

It's not surprising that it was during this time that the phrase "dole-bludger" was coined.

Ultimately, this means that unemployment was shaped by the age-old tension which the very capitalist economy is based on - labour versus capital - and the power and politics that go hand-in-hand with this equation.

This 1970s ideological swing away from full employment reflects a significant win for capital over labour, demonstrating the government's support of the rich few over the welfare of the working many.

It is no accident that Newstart/JobSeeker rates of payment were tied to inflation rates, instead of wages, in 1997.

From an employment perspective, the reason for this is one of balance - when the unemployment level is low, the cost of business is pushed up through increased negotiating power for higher wages, which eats away at profits and ultimately increases inflation.

However, if unemployment numbers are higher, workers are more expendable as those in positions of employment are more easily replaced, and therefore their bargaining power for higher wages is affected and more profits remain in the hands of the capital holders.

In 1975, the Non-Accelerating Inflation Rate of Unemployment (NAIRU) was developed as a theoretical economic marker, a target, below which the inflation level would be expected to rise.

In Australia, in 2020 it was estimated that if we keep the unemployment rate about 5 per cent according to the Reserve Bank of Australia, this is the sweet spot to furnish the country with workers to meet sufficient demand without increasing inflation.

From this, you can see that unemployment is inevitable, if not planned for, in a modern capitalist economy.

But since the 1970s, the government's "obligation" has been eroded and now the individual is obligated to prove themselves worthy of the pittance they receive. "Mutual obligations" indeed.

You might be wondering why am I telling you all this?

A week ago, acting PM Michael McCormack said that Australians experiencing unemployment should turn off "the Stan and Netflix" and get a job in regional areas.

Hearing this tired old talking point trotted out yet again by a federal MP - a point we've heard ad nauseum across both Labor and LNP governments since the '70s - was aggravating at best.

I found myself at a loss as to why we are still hearing our government MPs unapologetically batter vulnerable Australians with accusations of laziness when the evidence has been presented to prove the inaccuracy of these marketing ploys, and countless journalists, researchers, NGOs and even select politicians have spoken out about these cheap shots.

Given that the government has reduced the JobSeeker payment to below the poverty line this month, Mr McCormack's comments were particularly callous.

However, as this history lesson has demonstrated, it is in the government's best interest to keep us afraid of experiencing unemployment.

To sneer at those who are, and to be willing to do almost anything to avoid joining their ranks.

To call a person experiencing unemployment a lounge-lizard is to call all workers lounge-lizards, for the purpose behind the policy line is clearly about restricting the agency of those doing the labour in favour of those getting rich off their backs.

However, as Professor William Mitchell said, inflation and rising wages are only really proximate causes: "Unemployment arises because there is a lack of collective will." While we remain scared, while we do and say nothing, capital holders triumph.

Zoë Wundenberg is a careers consultant and un/employment advocate at impressability.com.au

This story Why the federal government won't talk about a lack of jobs first appeared on The Canberra Times.