There is no shortage of ideas as to how to get those now on the unemployment lines off them. The challenge is to find the right ideas to implement.
The ABS figures reveal a sobering tale about the rise in joblessness. In August this year, about 623,900 people were out of work. This is a staggering 44 per cent jump in the number of people looking for a job compared with the corresponding period last year.
In Victoria, the percentage increase in the number of unemployed people was slightly higher than across the nation as a whole. On an industry basis, about 28,000 jobs have been lost from wholesale trade businesses, while the recent downturn accelerated the decades-long shakedown of manufacturing jobs, with 13,300 jobs lost since August 2008.
The Rudd Government insists it has a range of policies designed to "support" jobs. Arguably its centrepiece is its fiscal stimulus packages, estimated to have totalled about $80 billion and which Treasury's new Keynesian models estimate will save up to 210,000 jobs.
Putting aside the issue that the outcomes of economic modelling are driven by the assumptions underpinning it, there are strong reasons to question the veracity of the Government's "make work" schemes. For a start, its spending is financed by taxes or borrowing (implying future taxes). It is well known that the imposition of taxation can distort economic decisions, making the economy less productive and weakening its capacity to grow and employ more people.
Doubts have been cast on the capacity of much of the Government's spending, such as on Pink Batts installation or duplicated school halls, to add real value to the economy.
The statistical evidence is showing that the fiscal stimulus has been ineffective so far in delivering masses of sustainable, real jobs. The number of people engaged by the retail sector nationally, which was the primary beneficiary of the $900 cash splashes, fell by 51,700 over the 12 months to August this year.
Meanwhile, job losses in construction have totalled about 15,000 over the same period despite huge government projects getting under way. To be sure, however, there are some people benefiting from the great fiscal churn. For example, there are likely to be extra Pink Batt installers while some consortiums are taking up school hall renewals with undoubted relish.
Even if we take the questionable Treasury modelling at face value, the Government's spending equates to about $380,950 per job saved.
Against the fact of jobs being lost in even the politically favoured segments of the economy, let alone just about everywhere else, the beneficiaries of the Government's new-found Keynesianism form one exclusive club indeed.
As questionable as the Government's suite of policies for jobs growth are, other ideas advocate the entrenchment of government as an employer of choice.
University of Newcastle economist Bill Mitchell has argued for the Government to guarantee jobs unconditionally for the unemployed. In a speech to the ACTU in July, Mitchell argued that, since "the Federal Government is not financially constrained in the same way as a household is, it can always ensure there are enough jobs available to meet the preferences of the available labour force".
The Centre for Full Employment and Equity estimates that a job guarantee based on the minimum wage would cost $8.3 billion a year. However, according to Mitchell's own blog this is an underestimate as his ideal scheme entails extra "social wage" government expenditures across a range of portfolio areas.
This represents one of the great internal contradictions of the scheme, as the private sector effectively bears additional financial burdens, and potentially contracts, to support a larger public sector.
The scheme is also likely to waste economic resources as special interests lobby the "buffer employment" government over the geographic distribution and industrial composition of jobs.
The Mitchell jobs scheme is littered with potentially damaging unintended consequences for the economy. The scope of public-sector activity would have to expand if the job guarantee was to have any chance of providing satisfying, meaningful work for the jobless.
But such a development would tend to displace current private-sector activities. For existing private-sector employees at or near the minimum wage, there is also a greater incentive to perform poorly on the job because of the perceived fallback of a guaranteed job in the public sector.
The dream of governments being able to create, support or guarantee jobs without harming the job-generating properties of the private sector is not based on economic reality. The reality is that the private sector is the majority employer of Australians, and the capacity of markets to self-correct and absorb additional labour is determined in part by a policy environment supporting continuous, strong economic growth. This implies we need a practical embrace of ideas in support of economic deregulation and fiscal discipline.
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