unemployment – Social Democracy

Call for a post-pandemic jobs guarantee scheme

New Zealand’s unemployment was less than 1% for 30 years from 1946 to 1976. Now the government, the Reserve Bank and traditional economists settle for 4% unemployment, as ‘full employment’.

This version of ‘full employment’ means 8% youth unemployment and 16% Maori / Pacific youth unemployment. Problems such as family poverty (including children missing meals), mental health, suicide, poor health and reduced self-esteem which accompany the lack of a job are barely acknowledged or debated there as to whether they are too high a price to pay.

Martin Taylor of progressive economic thinktank Digital Strategies who has been working on a jobs guarantee argues this could cost as little as NZ $1.6Bn, approximately 0.5% of GDP. And, this is more than outweighed by the benefits such as dignity of work, improved mental and physical health, improved social and environmental outcomes, boost infrastructure and care work.

Full article by Catriona MacLennan published on Radio New Zealand website, 29th April 2020.

https://www.rnz.co.nz/news/on-the-inside/415421/cat-maclennan-post-covid-19-job-guarantee-scheme-a-bold-solution

Modern Monetary Theory (MMT) – Eliminating Unemployment

A plain-English guide to what it is and why it’s interesting

“There’s nothing to prevent the federal government creating as much money as it wants” -Alan Greenspan, former Chairman of Fed Reserve, USA

Stephanie Kelton, Professor of Public Policy and Economics at Stonybrook University argues that there is no harm in printing money, there will be no inflation as long as there is unused economic capacity or unemployed labour. Government spending can be used to boost the economy and eliminate unemployment. Inflation can be controlled either by reducing government spending or withdrawing money by increasing taxes.

Explains that highly publicized instances of hyper inflation in pre war Germany and Zimbabwe were due to lack of resources to boost economies, rather than printing money.

While traditional economists still haven’t accepted MMT, what many governments are doing since GFC is printing money.

Government spending can be used to boost the economy and eliminate unemployment.

Full article by Jim Edwards and Theron Mohamed in Business Insider , https://www.businessinsider.com.au/modern-monetary-theory-mmt-explained-aoc-2019-3?r=US&IR=T