Hostname: page-component-76fb5796d-qxdb6 Total loading time: 0 Render date: 2024-04-26T06:26:13.359Z Has data issue: false hasContentIssue false
  • English
  • Français

The Costs of Unemployment in Australia

Published online by Cambridge University Press:  01 January 2023

Martin J. Watts  and
William F. Mitchell
William F. Mitchell
Affiliation:
Centre of Full Employment and Equity, Department of Economics, University of Newcastle
Get access Rights & Permissions [Opens in a new window]

Abstract

In this paper it is demonstrated that the measurable costs of the sustained high rate of unemployment in Australia are substantially higher than the alleged gains from neo-liberal (microeconomic) reforms. In addition, significant individual and social costs can be identified. Consequently macroeconomic intervention to reduce unemployment should be viewed as a priority, rather than the imposition of market reform with its uncertain impact. The paper concludes with a brief outline of a Job Guarantee Program, advocated by Mitchell (1998) that utilises the principles of the buffer stock mechanism to reduce unemployment. It is argued that the net increase in government outlays is modest and could be offset by a reduction in the level of annual corporate welfare.

Type
Research Article
Information
The Economic and Labour Relations Review , Volume 11 , Issue 2 , December 2000 , pp. 180 - 197
Copyright
Copyright © The Author(s) 2000

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

ABS (1999) Underemployed Workers (Cat. No. 6265.0).Google Scholar
Baragwanath, C., Howe, J. (2000) Corporate Welfare: Public Accountability for Industry Assistance, Discussion Paper Number 34, Australia Institute.Google Scholar
Bell, Stephen (Ed.), (2000) The Unemployment Crisis in Australia: Which Way Out?, Cambridge University Press: Melbourne.Google Scholar
Beveridge, William (1944) Full Employment in a Free Society, (Allen and Unwin: London).Google Scholar
Biddle, D., Burgess, J. (1998) ‘Youth Unemployment and Contemporary Labour Market Policy in Australia’. Paper presented at AIRAANZ Conference, Dunedin, NZ, February.Google Scholar
Bradbury, B., Ross, R., Doyle, J. (1990) ‘Unemployment Benefit Replacement Ratios’. Paper prepared for the Department of Social Security Policy Research Centre.Google Scholar
Burgess, J., Mitchell, W.F. (1998) ‘Employment, Unemployment and the Right to Work’, Australian Journal of Human Rights, 4(2), 76–94.Google Scholar
Burgess, J., Mitchell, W.F., O’Brien, D.J. and Watts, M.J. (2000) ‘Work for the Dole in Australia and New Zealand: A Critical Assessment’, in Lee, J., Probert, B. and Watts, R. (Eds.) Work in the New Economy: Policy, Programs, Populations, Centre for Applied Social Research (CASR), RMIT University. Melbourne, 81–101.Google Scholar
Darity, W. Jr. (1999) ‘Who Loses from Unemployment’, Journal of Economic Issues, 33(2) 491–96.Google Scholar
Darity, W. Jr., Goldsmith, A. (1993) ‘Unemployment, Social Psychology, and Unemployment Hysteresis’, Journal of Post Keynesian Economics, 16(1), 55–72.Google Scholar
Dawkins, P. (1996) ‘The Distribution of Work in Australia’, Economic Record, 72(218), 272–86.Google Scholar
Denniss, R. and Burgess, J. (1999) ‘The Budget Balance and the Stance of Fiscal Policy’ in Dahiya, S.B. (Ed) The Current State of Economic Science, 4, 1799–1816.Google Scholar
Department of Employment, Workplace Relations and Small Business (2000) Small Area Labour Markets, Australia, Economic and Labour Market Analysis Branch, Labour Market Policy Group.Google Scholar
Department of Family and Community Services (1999) Income Support Customers - A Statistical Overview, 1999. http://www.facs.gov.au/internet/facsinternet.nsf/aboutfacs/income_support_customers.htm Google Scholar
Freeland, J. (1997) ‘The Anatomy of Vulnerability: The State of Unemployed Australia’, in Turning Point, Evatt Foundation Sydney.Google Scholar
Galbraith, James K. (1998) Created Unequal: The Crisis in American Pay. New York: The Free Press.Google Scholar
Gregory, R., Hunter, B. (1995) ‘The Macro Economy and the Growth of Ghettos and Urban Poverty in Australia’, Australian National University Centre for Economic Policy Research, Discussion Paper 325, Canberra.Google Scholar
Hamilton, C., Saddler, H. (1997) ‘The Genuine Progress Indicator: A new index of changes in well-being in Australia’, Discussion Paper No. 14, The Australia Institute ISSN 1322–5421.Google Scholar
Industry Commission (1995) The Growth and Revenue Implications of Hilmer and Related Reforms, AGPS, Canberra.Google Scholar
Junankar, N., Kapuscinski, C.A. (1992) The Costs of Unemployment in Australia. EPAC, Canberra: AGPS.Google Scholar
Langmore, J., Quiggin, J. (1994) ‘Employment, Unemployment and Inequality’ in Work for All: Full Employment in the Nineties, Carlton, Victoria: Melbourne University Press, Chapter 3.Google Scholar
Merva, M., Fowles, R. (1992) Effects of Diminished Economic Opportunity on Social Stress Washington, D.C.: Economic Policy Institute.Google Scholar
Mitchell, William F. (1995) ‘Business Welfare - a Legitimate Role for Government’, Current Affairs Bulletin 71 (6), 4–13.Google Scholar
Mitchell, William F. (1998) ‘The Buffer Stock Employment Model - Full Employment without a NAIRU’, Journal of Economic Issues, 32(2), 547–55.CrossRefGoogle Scholar
Mitchell, William F. (2000) ‘Full Employment Abandoned - the role of the public sector’, Centre of Full Employment and Equity Working Paper, 00/05, November 2000.Google Scholar
Mitchell, William F., Watts, Martin (1997) ‘The Path to Full Employment’, Australian Economic Review, 4th Quarter.Google Scholar
Mitchell, William F, Carlson, Ellen. (2000) ‘Employment Dynamics in the Deregulated Labour Market’, Centre of Full Employment and Equity Working Paper, 00/02, May 2000.Google Scholar
Moore, D. (1997) ‘The Effects of the Social Welfare System on Unemployment’, Australian Bulletin of Labour 23(4), 275–294.Google Scholar
OECD (1994) The Jobs Study — Facts, Analysis Strategies Paris: OECD.Google Scholar
OECD (1996) Employment Outlook, Paris, OECD.Google Scholar
Quiggin, J. (1997) “Estimating the Benefits of Hilmerand Related Reforms”, Australian Economic Review 30(3), 256–72.CrossRefGoogle Scholar
Reserve Bank of Australia (1996) Statement on the Conduct of Monetary Policy, September.Google Scholar
Sen, A.K. (1997a) “From Income Inequality to Economic Inequality”, Southern Economic Journal, 64(2), 384–401.CrossRefGoogle Scholar
Sen, A.K. (1997b) “Inequality, Unemployment and Contemporary Europe”, International Labour Review 136(2), 155–171.Google Scholar
Siegel, R.L. (1994), Employment and Human Rights: the International Dimension, Philadelphia: University of Pennsylvania Press.Google Scholar
Watts, M.J. (2000a) ‘The Dimensions and Costs of Unemployment in Australia’ in Bell, S. (ed.) The Unemployment Crisis: Which Way Out?, Cambridge University Press, 21–48.Google Scholar
Watts, M.J. (2000b) ‘Wage Inequality and Unemployment’. Paper to be presented at the 7th National Conference on Unemployment: Unemployment and Labour Market Policies, University of Western Sydney, November 30 - December 1st.Google Scholar
Watts, M.J., Burgess, J. (2000) ‘The Polarisation of Earnings and Hours in Australia under a Decentralised Industrial Relations System: The Lessons for Economic Policy’, International Journal of Employment Studies 8(1), 27–58.Google Scholar
Watts, M.J., Mitchell, W.F. (2000) ‘The Arithmetic of the Job Guarantee’ mimeo, Centre of Full Employment and Equity, The University of Newcastle, NSW.Google Scholar
Wray, L. Randall (1999) Understanding Modem Money, Northampton: Edward Elgar.Google Scholar