Monday, 27 February 2012

We need to talk about jobs

Red pen about to start circling the Job Opportunities in the paper
Today's announcement about welfare reform brings us back to the problem that has been plaguing us for quite some time now; the absolute and urgent need for a proper strategy on job creation.

Last year I attended the Bruce Jesson Memorial Lecture and this time it was all about full employment, and delivered by Professor (of Economics) Paul Dalziel who has been doing a whole heap of research on the matter at Lincoln.

One of the key ideas he talked about, from Jesson's writings, was that when the welfare state was established in Aotearoa New Zealand, all those decades ago, it was set up to work in complementary fashion with full employment.  This muddled along ok, with direct state job creation in lean times and state support for private job creation in the good, until the two concepts were separated under Rogernomics and thoroughly divorced during Ruthanasia.

Nowadays apparently some people think that not only is it Not Cool for us to collectively support each other in the hard times through a welfare system, it's also totally naff to even consider any Government planning to ensure we have career pathways and actual jobs; so that we can get the things made that we need, access the services we require, and also be employed in ways that work for modern life.

Sadly many of the people who hold this view, that Government's role is severely limited and The Market Will Provide, are currently in positions of power in our society.  In particular they seem to populate Cabinet, and those who don't have Ministerial chairs to sit in appear to be given taskforce and directorship and whatnot roles by their mates who do.

It's awfully convenient, to blame people for being reliant on a state benefit AND blame them for the inability to get a job that suits the way their lives have to be lived.  It let's the Government totally off the hook.  What a coincidence.

Let's not forget that the type of work you need when you are the sole parent of a child, whatever the reason for that, or struggling with your own ill health or that of another in your household, is not 9-5 (plus travel) Monday to Friday away from home and with only 5 days of sick leave a year.  We have a huge shortage of affordable quality childcare - and not just for pre-schoolers but crucially for before and after school too (and during the school holidays).  Sure a child may be at school from 9am to 3pm, once they turn 5, but how many jobs do you know of that go from 9.30am to 2.30pm in four convenient ten week blocks a year?  Teacher aide jobs would sound ideal, except that there is a lot of competition for these and the pay is ridiculously low for the level of skill and responsibility often required.

We don't have enough jobs that meet these needs already.  Creating a whole new phalanx of people who need these jobs, in a time when casualisation is increasing and job cuts just keep coming, will suit employers just fine, as it will make prospective employees desperate.  Desperate to get a job, desperate to keep a job, and that is an incredibly vulnerable place to be in, as a worker and as a human being.

Do we actually want to make people more vulnerable than they already are?  Why?


aliceapplepie said...

Pretty much. The blind ideology is tired. At the moment, we are wishing on a star that the private sector will come to our rescue when clearly it isn't. What is needed until the private sector does sort it's shit out is, like you say, intervention through direct state job creation. At least we won't end up with a whole generation of disaffected youth suffering from the damaging psychological harm that comes with being long term unemployed.

AnneE said...

Great stuff, Julie. At a time of high unemployment, the government is intent on sacking as many people as it can with one hand, and pushing hundreds more of the most disadvantaged out to search for non-existent jobs with the other.

Mark Hubbard said...

To state my ideology, I'm an Objectivist Libertarian. From that point of view, a query.

In light of the government in Greece which has managed to create a State rail system that employs more people than it carries, and it would be cheaper for Greek taxpayers to simply pay for taxi chits for all the passengers; in light of this, and every other disastrous decision made by central planners that are currently collapsing the economies of Europe and the USA, for central planners, including in our crony social democracies, can never anticipate the complex needs and desires of all the individuals in a society (in comparison to a laissez faire free market which in and of itself is the very expression and working out of those needs and desires): given this, how on earth do you think governments can create jobs?

I contend that if governments cast aside their doomed Keynesian socialism and got out of the lives of individuals, economies would then be prosperous, and would provide the more jobs necessary.

And even more important than that, albeit intricately linked, because you can't separate philosophy, politics and economics, such a society, a classical liberal society, would be denoted, above all else, by the freedom of the individuals within it, including every woman.

A bit scatter gun now, sorry, but one of the mysteries of a 'feminist movement', at least according to the myth of it, to me is why it has adopted the central planning Big Brother State collectivist model, and not the individualistic one of classical liberalism. The smallest minority is the individual: protect that minority, as, say, a constitutional libertarian minarchy would, then every individual is set free, regardless of gender or race?

I've never understood this. Though I do understand the impulse to be free.

James said...

Mark dare you ask such phalo-centric questions!

Psycho Milt said...

I contend that if governments cast aside their doomed Keynesian socialism and got out of the lives of individuals, economies would then be prosperous, and would provide the more jobs necessary.

Sure you do. And Karl Marx wrote some very good descriptions of what the resulting society would look like, and where it would be headed. Which is why we've spent the last 150 years getting govts to make sure that doesn't happen.

Still, your comment does reflect National's thinking to some extent: their thinking being that if they just unbalance labour relations sufficiently in the employers' favour, employees become cheaper and more jobs can be created. It's a recipe that's worked for various Third-World countries, and as long as we don't mind Third-World living standards I expect it's one that would work for us too - thing is though, employees here don't fancy Third-World living standards much.

Mark Hubbard said...

Milt, I said I was a Libertarian: that's a long, long way from a Conservative right winger: I would no more vote National than Labour.

You write on conditions under a crippled capitalism called crony capitalism, under which we are simply slaves of those businesses that can capture monopoly rents in collusion with Big Government. I'm writing on the only economic system consistent with my individual freedom, and everybody elses: laissez faire.

So this debate doesn't simply break down to ad hominem, can you name me an economy where Marxist theory has made the individual's lot better, in every sense, not much, much worse?

Because regarding Keynesian socialism - because Marx has still been at the lectern of every western economics tertiary course for the last eighty years - I cite Europe and the US: they're now wiping out swathes of their middle classes, and, Europe first, will in many areas enter the third world, yes. And worse, Nanny's already Big Brother States - please don't deconstruct that - will take them down Hayek's Road to Serfdom where they risk repeating all the evil excesses of the 20th century all over again.

Humans have done that already: why haven't we learned from it? Why are we so scared to move to free societies: Classical liberalism?

It's not just about money. It's never just about money.

Julie said...

Mark and Milt, this is a derail. I don't mind having this discussion at all, but not in this thread. Please can we get back to the topic of the post, namely the disconnect between policy approaches to social welfare and job creation.

If I get a chance I'll start another thread on the general issue of feminism and libertarianism and why those who believe in the former don't generally embrace the latter. Please hold your fire for that. I won't delete comments here that have already been made but am not keen to have this thread go in that direction so may delete future ones.

Psycho Milt said...

Sorry about that. You're right - talk back to a libertarian and you're looking at a thread 100 comments long. OK, I'll separate out the second part of my comment and make it more clearly about the post:

Bill English knows as well as we do that the govt has a huge influence on how much unemployment there is. But what his govt is doing to reduce unemployment is based on making employing people cheaper by driving down pay and conditions, and making the unemployed desperate enough to take the resulting McJobs. In other words, they don't really believe the govt's role is limited, but what they're actually doing isn't something they really want to publicise.

Mark Hubbard said...

So, back on topic, my question remains the same (please excuse typos, I'm in a hurry):

How does a government create long term, high paying jobs in the private sector? State sector jobs, which generally hold the private sector back and stop it functioning freely, efficiently and effectively, don't count, obviously, other than for the opposing case.

Actual policies that they can implement?

Another question: can any vibrant economy consist of just high paying jobs? Answer how it can? Answer why it should? Who is doing the street sweeping, cleaning the toilets, etc?

And regarding policy making, lets take out, from the get go, educational subsidies for further learning: many I see from the state school system don't have enough basic literacy and numeracy skills to employ any more, 80 years of state education has been a failure. And the tertiary institutions as a rule simply churn State funds into idiot diplomas that can't be placed into the private sector in the form of jobs. Indeed, I reckon it would be easier to provide evidence from the US of more private sector jobs being created by unpaid internships, than by taxpayer money being forcibly extracted to subsidise career courses in tertiary institutions.

stargazer said...

wow mark, that last comment is hardly worth even engaging with. state sector jobs hold back the private sector? hardly, and where they do, it's because the things the private sector is doing is harmful to society as a whole. state education system a failure? as a product of that system, can i politely tell you to get lost. i'm not a failure, neither are the vast majority of people i went to school. the public education system isn't 100% perfect and doesn't meet the need of all students, but then no system is completely perfect. there is room for improvement, there always is. but to write the whole thing off when most people are doing well is just bizarre.

i can't really be bothered responding to much more because i have to work. but one last point re the toilet cleaners etc. no-one is saying they should be really highly paid. what we're saying is that they should have enough of a decent wage to be able to feed their families and manage their households. it used to be the case when we had award wages and legal protections for work rights, and an inability to casualise the workforce.

Mark Hubbard said...

Decent wages, yes, Stargazer. Just making sure the 'equal' income rot hadn't invaded here.

Question: every state sector job: how are they paid for?

Wealth, and economic prosperity can only be created in the private sector. The State sector destroys that wealth, and because the State is out of control now, worse, uses it to trample over individual property rights and freedoms we all should expect as of right.

Getting back in line with the header post, those societies which have created welfare states as big as the West has now, are inevitably going to have to go through the pain of economic chaos, as is starting in Europe and the US, and by that I mean the destruction of decent wages, and decency, full stop. Our welfare state, its scale, was always an economic illusion - and it's now further turned into a Gulag of Good Intentions.

stargazer said...

Wealth, and economic prosperity can only be created in the private sector. The State sector destroys that wealth...

bullshit mark. please get a clue. where do you think people getting wages from the state spend their wages? when you take all that money out of the economy, who suffers? all the small & medium-sized businesses where those employees spent their money. when the state builds infrastructure, all that money goes back into the economy and helps the private sector. the state has been running some very successful organisations very profitably - at a cheaper cost than the private sector. except our current government wants to sell off the most profitable of them. can you please stop with the wild statements that have absolutely no basis in reality.

Mark Hubbard said...

Correction: those operations of a limited government that don't simply uphold the rule of law (and non initiation of force principle) destroys wealth and economic prosperity.

Stargazer says:

bullshit mark. please get a clue. where do you think people getting wages from the state spend their wages? when you take all that money out of the economy, who suffers?

Again, and where did those state sector wages come from?

Only three answers:

Private sector tax - which is a break on the private sector, and freedom, given the Stasi like powers a State has to give IRD to breach individual rights and privacy to collect the compulsory tax.

Printing money or debt: ie, the fiat money system, a fraud, that is literally destroying the West. Look at the news each night.

We also need a sound money system that's not controlled by the State - ie, not central banks etc. Only on that basis, with free markets, will you have sustained job and wealth creation. Oh, and my freedom.

... and now I've got appointments, so later ...

stargazer said...

well this is clearly a waste of time. a gain with the wild statements, which really aren't worth responding to. and going off on a derail again. sorry julie. i'll stop here.

Mark Hubbard said...

Stargazer, my last post was not only reasonable, for once it laid a problem out in its stark economic terms with no denial of reality, something politicians can't bring themselves to do in eye of the vote.

What was my, quote, 'wild statement' in that post? Where else does that state sector wage bill get funded from, other than the the sources I mentioned?

Beerbaron said...

Mark...great response and you left stargazer in a no-win situation trying to defend the nonsensical. Yes the public sector is a leech on the private...remove the tax take and its like a tumour with its nutrient supply wither and dies.

But that's just basic economics 101 and logical progression... something not appreciated by certain fix minded dogmatic types...

Julie said...

Mark you are repeatedly stating your opinion as facts and then getting annoyed when people point it out and call you on it. I was keen to give you a chance but I'm now reconsidering.

In my opinion (see, that's how you do it) Government (central and local) is not only a major direct employer it also acts as a flagship for pay, conditions, etc. Government can play a really crucial role in piloting innovative approaches to employment, that might be too risky (or too challenging to the norm) in the private sector. And they can role-model best practice. Plus through policy decisions Government can influence job creation in the private sector. To give one example in the 1980s iirc there was a concerted effort by the govt of the day to shift to more use of CNG rather than petrol. This resulted in a burgeoning CNG installation industry - including adaptation of vehicles so they could do both CNG and petrol. But later on a change in Govt policy away from CNG killed it off, to such an extent that if your CNG engine tank and mechanisms needed fixing you were pretty much out of luck (for vehicles this was).

Comments that do not add to discussion will be deleted on the remainder of this thread by the way. I'm not interested in off topic scraps.

ewsm said...

There is actually a simple elegant solution to unemployment.

Once we realise the problem is a structural one, then we know the solution is structural.

There is a good reason why we have a debt problem following a period of economic growth: in our system new money is created as debt.

If we restructure our system we could have full or almost full employment. But our government does not want to consider this structural solution because it strikes at the very centre of power; money and banks.

There are 2 parts to this video; the first part is what is structurally wrong with the current system, part 2 outlines a solution.