The Albanese government’s white paper which was released last week, wants to fix major problems in the labour market.
It says the concept of ‘full employment,’ as the Reserve Bank defines it, is inadequate.
John Maynard Keynes said involuntary unemployment, which described the reality of millions of people who wanted to work but couldn’t get work, was crucial.
He called it ‘involuntary unemployment’.
He said full employment would only exist when involuntary unemployment disappeared.
This Australian policymakers in the post war years to deliberately stimulate economic activity to create enough demand for labour. You can see the evidence in the graph accompanying this story.
Today the modern definition of ‘full employment’ used by the RBA has major methodological issues and it ignores high levels of under-utilisation of Australian workers in the modern era.
The White Paper also states the quality of a job is also important for people. So if someone’s unemployed, it should never take them so long to find a job that it starts to demoralise them.
Unfortunately, the yellow-stain Albanese Government doesn’t promise a muscular set of policies to drive involuntary unemployment out of the system.
The Reserve Bank will continue to use its narrow concept of full employment to make decisions about monetary policy, and the government will try very hard to remove barriers to employment.
This is piss weak and lacks boldness. So if you’re in Adelaide, which has a massive undercount of unemployed and underemployed, you can’t take much hope from this.