Big picture thinking needed to tackle poverty

My comments on the Greens’ Jobs and Income Guarantee. I had intended to provide comments for this piece by Asher Moses but couldn’t make the deadline.

The Greens are mostly right in spirit on this one. We need bold big picture thinking to tackle Australia’s entrenched poverty, unemployment and under-performing economy. They should be commended for shifting the needle of public debate.

In the context of pandemic unemployment, getting people back into work is obviously a critical priority. The Greens have been a bit vague on their details, but employment should be supported through a mix of conventional Keynesian pump priming, additional public employment and active labour market programs that support private sector employment through training and wage subsidies. Although conventional public sector employment would be ideal, this could be supplemented by the sort of program that is often described as a “job guarantee” (my variant here).

These types of measures are affordable. Australian governments’ net debt in 2020 is only around 35 per cent of GDP – the G20 average is over 100 per cent. In the long term, such programs can be funded with additional revenue from sensible tax reform. Australia under-performs on taxation, below average for advanced economies, and nearly 40 per cent lower than other rich countries like France, Belgium and Denmark.

Hopefully the Greens’ proposals will instigate a public conversation about poverty and unemployment. Poor and unemployed people suffer a great deal of stigma based on the belief they are slackers. The present crisis is the perfect time to highlight that poverty is driven by structural forces outside of any individual’s control. Even at the best of times, the brutal truth is that the government deliberately enforces a certain level of unemployment via macro-economic policy frameworks, as a safeguard against economic overheating and runaway inflation.

The Greens, to their credit, have turned the tables on accountability for unemployment; rather than blaming individuals for not finding jobs that do not exist, the government is held to account for failing to build an economy that provides sufficient jobs.

The Greens are right to combine a jobs focus with an income focus. There is a commitment to guaranteeing minimum standards of income even to those who do not get a job. It might not be politically correct to say this, but a full-time job will never be the right solution for everyone, including for working age people.

But for this same reason I am a bit concerned about rhetoric that presents jobs as “guaranteed”. It’s important not to oversell. If the public become convinced that a program literally guarantees everyone a job, it will become harder to politically sustain welfare programs for those who for whatever reason are not successfully matched up with a suitable job. Ironically, a so-called job guarantee could intensify the blame heaped on those who remain unemployed, as it implies that any residual unemployment is purely a matter of personal choice.

As someone who grew up in a family and location marked by persistent unemployment, I am sceptical that government will ever completely eradicate it. People have all kinds of complex things going on in their life – including caring obligations, disabilities, illnesses, traumas. The notion that a real-world bureaucracy can somehow find or create a job specially aligned for each individual’s complex needs and distinctive capabilities seems fanciful to me. It is not the way I understand bureaucracies to operate.

The only fail-safe protection against poverty is direct income transfer – and as such leftists and progressives should unapologetically put this front and centre of any anti-poverty strategy. In the long-term, this implies introducing some form of basic income – such as a guaranteed minimum income or participation income in which people are paid for making a societal contribution, whether that is job search, caring or volunteering.

Unfortunately the Greens have made their more comprehensive commitments available only to under 30s as part of the “Next Gen Guarantee”. Commitments to over 30s are vague at best. This is very strange and totally unnecessary. Poverty is poverty, regardless of age.

Unlike the major parties, Greens do not actually have to implement their policies so they do not face real resource constraints. It is therefore likely that the decision to exclude over 30s from the full deal is deliberate and strategic symbolism, rather than a difficult trade off. I believe it’s an attempt to play a kind of generational identity politics.

While this may be appealing to their voter base, it undermines the type of broad social solidarity required to introduce and sustain a generous social democratic welfare state.

Nevertheless, the Jobs and Income Guarantee is to be welcomed for bringing bold initiatives on poverty and inequality to the forefront of public conversation.

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