Anthony Albanese's got a tough job ahead dealing with jobs

Pre-election, now Prime Minister Anthony Albanese, touted a "full employment" policy, drawing from the example set by Curtin. Our worldwide struggle through COVID creates an interesting comparison to the great upheaval of the world wars and perhaps shapes an opportunity for a Labor leadership that echoes an era characterised by what is often considered one of the greatest Australian prime ministerships since federation. No pressure, Albo.

"Full employment" is a tenet of the Keynesian theory of macroeconomics, the leading economic theory until the mid-1970s. Michael Keating explained this for The Conversation in basic terms: governments should increase their spending when private spending is too weak to keep people in jobs. However, when private spending is too strong, inflation levels rise, and thus the government should restrict its own spending to rein in inflation. It's all about balance.

However, in the mid-1970s, a surge in oil prices resulted in both a surge in inflation and unemployment, which Keynesian economics couldn't explain, and we saw a shift to governments relying on monetary authorities (eg. Reserve Bank) to maintain the balance. Utilitarianism and neo-liberalism, associations of joblessness with laziness, and the term "dole-bludger" all arose to prominence from this period and has sustained government cycles since. Focus has been on corporate-profit, and facilitating the achievement of the non-accelerating-inflation-rate, which as David Richardson argued in 2019, ensures a certain percentage of workers are in fact unemployed as an inflation-protection measure.

We have equated our concept of worth with our ability to undertake paid work, resulting in de-valuing the role of unpaid work. This is because the "new" model of economics is based on productivity, participation in employment, and population. However, missing from this equation is demand - a key for Keynesian economists. For them, the distribution and growth of wages (as a portion of the national income) was just as important.

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While the exponential growth in government spending since the pandemic might seem like a return to Keynesian economics model, Keating, writing in 2021, discusses the 2020-2021 mid-year economic and fiscal outlook and questions whether this is in fact the case. He draws attention to the fact that for the last five years, the national income proportion allocated to profits has increased while the proportion allocated to wages has decreased. Under the Morrison government, the continued pressure for wage freezes that Keating points out, definitely suggests that any reflection of Keynesian economics in their fiscal policy is superficial at best.

Anthony Albanese's campaign promise to prioritise a jobs summit to inform the first White Paper on Full Employment since Curtin, as a "matter of urgency within Labor's first term", is now on the cards. The summit is likely to happen in September, with the forum focusing on bringing together unions and businesses to discuss how wages can be lifted without an inflationary response, through lifting productivity. While this rings the bell on a return to a more Keynesian inspired economic policy, it's still really all about numbers. "Full employment" can be a misnomer: it's not about talking to the people about how the government can help them find meaningful work, but the positive spin the term inspires is certainly politically useful.

We hear a lot about the $195.7 billion of government spending on welfare related services and payments, but that's not the whole picture.

What we don't hear a lot about is the 588,000 people employed in the welfare workforce, or the multi-million dollar boost that Deloitte estimates regional communities would receive through increased consumer spending if welfare payments were raised. Do we need a separate summit to ask how the JobSeeker rate can be raised to adjust for the inflation-induced higher cost of living without further inflationary economic impact as well? Perhaps this is why the ALP won't discuss raising the rate?

I'm no economist, but one thing I do know is we can't take it with us, and as John Maynard Keynes himself famously said, "In the long run, we are all dead."