Jobs for all: could a government-funded Job Guarantee be Australia's answer to unemployment?

Out of work due to a workplace injury, the South Hobart resident found herself on the books of a job service provider and entered the world of mutual obligations - having to attend sessions and apply for a certain number of jobs with the fear of losing her government income support for any slip-ups.

"My personal experience has been that they've not really helped myself or my husband find work," Marina said.

"Any work we've ever had has been found through our own efforts."

From sitting in group sessions with other job seekers, who each viewed it as a waste of time, they were taught about the art of putting in resumes at unsuspecting businesses. Straight after, Marina tried her luck at Centrepoint, but was told to apply online.

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It was one of many ways the job service provider seemed to have a disconnect between it and the real world of employment.

"And the job seeker is the one who is expected to carry that relationship, even to the extent of chasing up appointments that were not adhered to by the job service provider for fear of losing your payment," Marina said.

It was a common story in the pre-COVID world, before mutual obligations were suspended and Newstart increased.

Now, as Australia faces a long-term jobs crisis, attention is starting to turn to alternatives.

Jobs for all was one of Dr Martin Luther King Jr's key demands, which has since become lost under the weight of his "I have a dream" oration. That 1963 March on Washington was, officially, named the "March on Washington for Jobs and Freedom".

His view was that a federally-funded job assurance was critical to addressing poverty in the United States.

And in Australia, particularly from 1945 to the mid-1970s, governments were committed to a full employment policy - albeit mostly for men - through a mixture of public investment, immigration and tariffs. But successive governments ate away at this until, in 1997, Australia completely privatised its public employment services.

It caused a significant uptick in the number of job seekers in Australia compared to jobs.

Aboriginal leader and activist Noel Pearson believes this was a grave mistake that caused inequality to rapidly increase in Australia.

He has become one of the main advocates for a return to a government-funded Job Guarantee for anyone willing and able to take on a minimum wage job, based on a model by University of Newcastle economics professor Bill Mitchell.

Mr Pearson told The Examiner that Tasmania's higher unemployment, higher levels of insecure work and difficulties for younger job seekers, as well as its rural and regional setting, made it a prime candidate.

"There's three arguments in my view in favour of the Job Guarantee scheme," he said.

"Firstly, particularly in the current context, it provides an income to live for the participants.

"Secondly, it's the stimulus needed for local and regional economies. The Centre for Full Employment's modelling shows that there's a multiplier effect of that kind of investment in communities via a Job Guarantee. It would also generate a whole lot of private sector jobs.

"And the third argument, which is an old argument, is that this needed to be done before the coronavirus, but is needed even more now. The need for a Job Guarantee was stark in Australia for many decades now, because in the context of 30 years of uninterrupted economic growth, we still had 5 per cent-plus unemployment."

The idea centres around the fact that Australia has many areas in need of improvement, whether it's in social assistance such as aged, disability and other health care needs, family violence services and community services, or in environmental stewardship work.

Providing a minimum wage guarantee with flexible hours depending on personal circumstances could be an incentive for the unemployed to earn more than on the low levels of government income support, and when jobs become available in the private sector, they could transition across.

The Commonwealth was proposed as the source of funding, while local government would act as a go-between for community groups - who propose projects to be worked on - and job seekers and the government.

Funding the scheme relies on principles of Modern Monetary Theory, in which the Commonwealth, as an issuer of currency, is not constrained in its spending capacity, and that Australia's debt is low by international standards anyway.

Mr Pearson has formally presented the proposal to Prime Minister Scott Morrison, and said COVID was making it difficult to ignore.

"It's got to be the people - the regional communities - to step up and say we need this, our young people need this, our communities need this," he said.

"It's a better way to organise income support in our communities going forward than the way we've been doing it for the last 40 years."

Like with any major policy proposal, there are varying opinions on how it could be implemented and where jobs should be targeted.

The Australian Unemployed Workers' Union has advocated the idea for several years, with a particular focus on green jobs in rural and regional areas.

They believe the jobs should be paid at an equivalent to what other people earn in similar jobs, and that - unlike Work for the Dole - no one should ever be forced to participate. For those who do not participate, unemployment benefits should be brought above the poverty line at least.

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AUWU spokesperson Kristin O'Connell said it would also improve conditions for those already working in the private sector, as they would have the option of leaving an abusive employer with the guarantee of a good job waiting for them.

"There's also a lot of disability programs where people get paid a couple of dollars an hour, similar programs targeting Aboriginal people as well as ParentsNext - we would abolish those, and replace them with meaningful work available for people who want it," she said.

"For us, it's good jobs for all those who want them, and the pay should be fair."

While initially supportive of the Bill Mitchell model, the AUWU has sought to have a more comprehensive scheme with further safeguards in place.

Having extensively studied economic crises and their aftermaths, COVID presents something entirely new for University of Tasmania senior lecturer in macroeconomics Mala Raghavan.

She said the immediate focus should be on managing the crisis, but there was also an opportunity to transform the way we think about employment.

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"This is the time for government and private sector to rethink. In the past, during good times, we had no time to make changes, but now we have no other choice but we have to make some changes. You look at the environmental issues, we must go green energy, we've got to be more creative in creating jobs," Dr Raghavan said.

"Unemployment in Tasmania is structural. Youth unemployment was already very high. Now is the time to diversity the Tasmanian economy."

And while believing Modern Monetary Theory could be too good to be true, she said all options had to be on the table for Australia's recovery.

"Anything that helps job security is a good thing. Addressing the disparity in income is essential, because the gap between rich and poor is getting wider, and COVID has worsened this again," Dr Raghavan said.

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