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The economy can’t guarantee a job. It can guarantee a liveable income for other work

TJ Ryan Foundation Research Associate, John Quiggin, writes in The Conversation (19.1.21) about the phasing out of the federal government’s pandemic income support schemes, arguing that we shouldn’t go back to a Newstart payment that was recognised as inadequate long before the pandemic arrived.

‘When the coronavirus pandemic hit Australia in March 2020, the Morrison government took bold and imaginative action.

‘The most notable examples were its income support programs – JobKeeper, paying a A$750 weekly subsidy to employers to keep workers on the payroll, and JobSeeker, which doubled unemployment benefits relative to the Newstart allowance, frozen in real terms for nearly 30 years.

‘These measures were announced as temporary. The government has already begun winding them back as the economy recovers from the worst impacts of the pandemic. On January 1 the JobSeeker supplement (being paid to about 1.3 million Australians) was cut from A$250 to A$150 a fortnight. It will cease in March.

‘… In an economy that cannot provide full-time work for everyone who wants it, we need to take a broader view of the way people can contribute. To respond to the post-pandemic era, we should adopt the concept of a Liveable Income Guarantee (LIG).’

Resistance to raising the minimum wage reflects obsolete thinking

Jim Stanford writes in The Conversation (13.4.21) about a push to raise the minimum wage, suggesting that government opposition to the proposal is an based on outdated economic thinking.

‘Fewer than 2% of Australian employees work for the minimum wage (now $19.84 an hour). But the federal Fair Work Commission’s annual decision on how much to increase the minimum wage also helps determine pay rises for up to a third of Australian workers.

‘The adjustment, which comes into effect on July 1, flows through to those paid under awards, many on individual contracts and even some enterprise agreements (whose wage increases effectively track the minimum). Last year’s increase of 1.75% was the smallest in 12 years.

‘… The federal government has implicitly sided with [employer groups]. Its submission to the Fair Work Commission last week warned a higher minimum wage could “dampen employment” and impose a “major constraint” on the post-COVID recovery.

‘But this argument is based on outdated economic ideas. The evidence from economic research over the past few decades suggests boosting wages back to a normal trajectory would strengthen aggregate demand and consumer confidence, help keep inflation on target, and bolster government revenues at a vital moment in the post-COVID recovery.’

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