GUEST BLOG: Bryan Bruce – Unemployment isn’t Working

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I live in Auckland . Last night while driving home around 8pm I passed a small road side car park with about 10 vehicles in it with people sleeping in them. I doubt they were holiday makers.

A story on today’s RNZ feed says there are now 29 registered food banks serving the city.
On the news I caught an item about students leaving school early to try and bring some income into the house or look after younger siblings so their parents can work.

I’m sure these issues are not just Auckland problems but are being faced by many communities throughout our country.

Times are going to get tougher before they get better so what can we do about it ?

One solution on offer is the UBI – the universal basic income. I understand the arguments but I am not yet convinced about it. My concern is less about cost than about creating incentive and dignity.

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Most people, given the chance, I believe, would rather earn the money to put food on the table than be given hand -outs.

If we look back to the Great Depression the strategy that delivered an economic recovery was government created jobs particularly through big infrastructure projects such as building schools and houses, improving the railways and tree planting.

It’s what I would call Universal Job Creation ( UJC) which would require the government to become far more active in the marketplace .

How would it be initially funded ? By doing that thing NZ governments to date have been frightened of doing – run the budget at a deficit until the economic ship comes right.

Why would you do that?

Because one person’s spending is another person’s income and you can’t spend if you have no income.

By the government creating jobs it stimulates the economy in a way that is more positive for our society than hand- outs because long term things get made.

I’d also take this crisis moment to redefine what we mean by a “job”

For far too long we have accepted the neoliberal model which insists that , for example, mothers put their children in care while they get a job to earn money.

It could well be part of a Universal Job Creation scheme that bringing up children or caring for a disabled or perhaps elderly relatives is considered a “job” for which people are paid a living wage. There could be work making community food gardens, paying people to develop free computer software or to be musicians and artists for example.

Before I sign off for today I should just mention that the National Party posters I see around my neighbourhood do feature the word “jobs” but what they propose to do it is neoliberal. Give tax breaks to the well off and it will trickle down to creating lowly paid jobs for the not-so-well-off.

The post covid economy is going to be very different . The marketplace will not fix our increasing poverty issue. Deficit funding of jobs , the great Depression taught us, certainly would.

An Australian economist who has written quite a bit about government job creation is Bill Mitchell and you can find a useful article about him and his job guarantee idea here.

 

Bryan Bruce is one of NZs most respected documentary makers and public intellectuals who has tirelessly exposed NZs neoliberal economic settings as the main cause for social issues.

24 COMMENTS

  1. You can put all the homeless up in your property, Bryan… or start calling for a crash of the housing “market” on a daily basis? Alternatively, you could just STF up, and take Chrisfran O’Trottervan and Right-wing Mike Treen with you….

  2. UBI is good because it gives the poor more power to push back against low pay.
    Done correctly it can also remove a lot of needless bureaucracy by removing means (was there ever a better word for it) tested welfare and simplifying the tax system (with a flat rate on every penny because UBI essentially makes it progressive).
    That said, jobs through infrastructure creation is also good. As long as people don’t fall for the broken window fallacy – it has to be useful.
    The trouble is that the rich have to want it.
    In the Great Depression socialism and communism were seen by the rich as a threat to their way of life. They probably felt they had to throw the poor a bone.
    In the post war boom years (for most Westerners) there was the same threat that gave us social democracy.
    I just don’t see an modern equivalents, the only alternative to Western neolibralism is the Chinese system or Russian oil money.
    I don’t believe that a grass roots, democratic attempt to do this ourselves will be allowed to survive. The steps our society would have to enact to protect ourselves from the response would be so severe as to create it’s own problems.

    Until the majority people are educated enough to say “I’m glad I can’t afford the latest PlayStation or BMW because it means we have a society with free education, health care and equality” and “I don’t believe the lies the media is telling me because I understand how they are funded” we’re not going to get a good society.

  3. @ BB. You write;
    “Times are going to get tougher before they get better so what can we do about it ?”
    Well, get rid of these fuckers immediately for a start.
    The Guardian.
    “The links between politics and banking are desperately unhealthy, for all of us”
    Simon Jenkins
    https://www.theguardian.com/commentisfree/2020/aug/20/politics-banking-unhealthy-whitehall-city
    Any ‘increase’ in income, whether it’s as higher benefits or higher work earned income will go, either directly, or indirectly into the $6 billion dollar net profit ledger of anz, bnz, westpac and asb yearly.
    That.Must.Stop.
    The banks are the very core problem in AO/NZ. Before ANY wage increase, benefit increase or tax break the banksters must be driven out and the only way I can think of doing that is to tax their net profit as heavily as we like.
    I don’t think I need to write that the banks design our society and our communities to best profit from us by lobbying our politicians who’ll be oiling their office door hinges as I write.
    The best way to scrape the banks off our shoes is to tax them. I mean TAX them. A modest rate of 99.99% would be a good start and of course the transparency of those tax monies being collected will show, very clearly, that, that money goes directly to those people in that car park. Not via another bank, like westpac who’s the government bank as I understand it, not bureaucrats or agencies or the many and sundry over paid hangers on sucking on the withered public-funds tit.
    “Most people, given the chance, I believe, would rather earn the money to put food on the table than be given hand -outs.”
    No, they wouldn’t. When you’re down and out and fucked and your clothes stink and you shit behind shrubs along Ponsonby Road and you’re constantly cold and afraid you’ll take a hand out in a heart beat.
    A problem we AO/NZ’ers have is that we can barely give people money to help them rediscover their human being-ness is because the shit money they’re given is always loaded with cynicism and a book’s worth of patronising advice. And is never enough. Taxing benefits, for example? What the fuck’s that about???
    I saw a cartoon once of a homeless guy begging. His sign read ” Please help? Trying to get enough money to
    buy bootstraps to pull myself up by. ”
    “I should just mention that the National Party posters I see around my neighbourhood do feature the word “jobs” … ”
    To better understand that, read the above paragraph re banks lobbying our politicians for our money to send off-shore.
    ( You seen the house prices in Nelson? I mean, what the fuck? Nasty, tacky, pop-up, just add water then shake N bake houses with million dollar price tags. That’s the work of the bankster, right there.)

    To paraphrase jonky.
    Chris Hedges.
    “Just another lefty Pulitzer Prize winning journalist”
    “Those who fail to exhibit positive attitudes, no matter the external reality, are seen as maladjusted and in need of assistance. Their attitudes need correction. Once we adopt an upbeat vision of reality, positive things will happen. This belief encourages us to flee from reality when reality does not elicit positive feelings. These specialists in “happiness” have formulated something they call the “Law of Attraction.” It argues that we attract those things in life, whether it is money, relationships or employment, which we focus on. Suddenly, abused and battered wives or children, the unemployed, the depressed and mentally ill, the illiterate, the lonely, those grieving for lost loved ones, those crushed by poverty, the terminally ill, those fighting with addictions, those suffering from trauma, those trapped in menial and poorly paid jobs, those whose homes are in foreclosure or who are filing for bankruptcy because they cannot pay their medical bills, are to blame for their negativity. The ideology justifies the cruelty of unfettered capitalism, shifting the blame from the power elite to those they oppress. And many of us have internalised this pernicious message, which in times of difficulty leads to personal despair, passivity and disillusionment.”
    ― Chris Hedges

    • Chris also refers to the above as magical thinking its why we now have “influencers” selling their lifestyle to the gullible and vain. Paul Holme’s “daughter” is a prime example of this.
      I do love Chris’s talks on youtube he calls out the Oprah’s, Tony Robbins selling their snake oil.
      Great post btw.

  4. “The banks are the very core problem in AO/NZ. Before ANY wage increase, benefit increase or tax break the banksters must be driven out and the only way I can think of doing that is to tax their net profit as heavily as we like.”

    I think that the best way to deal with the banks is to stop them creating money out of nothing, and hand all money creation over to government. Reestablishing the former State Advances Corporation for housing loans would also help.

  5. Bryan Bruce – You will be kept on, you come up with good titles for your posts and good stuff underneath! Thanks for your insight.

  6. Great post Bryan we need lots of jobs post covid and we need lots of houses. It’s a no-brainer isn’t it. The Govt. must do this, State House building on a truly massive scale. 120m2 house + seperate garage designed cheap and pump them out. Standard plans, strict building guidelines for the workers. Pump them out. It doesn’t take long to build a small, cheap house.

  7. As we had unemployement, massive underemployment and increasing reliance on charities and NGO’s since the Government abdicated its responsiblites toward the less well of during what was meant to be a ‘rock star’ economy. Why would anyone think that business as usual would work now? Even families with both parents working are increasingly unable to pay the bills. We need to look at the whole economy. Are we happy with the types of jobs it produces? Do we need to steer investment away from property into something productive? Can the wide open economy we have now support domestic job creation? We cannot compete with the Chinas of this world with hourly rates, you simply create an underclass. There are some fundemental questions to be answered, but I dont see anyone who matters asking them.

  8. Bryan, no where in your post have you mentioned of either employer or business. Now I assume you do understand that the majorty of workers in this country are employed by small to medium business, SME’S, run managed and funded by hard working, once were workers, mum and dad grafters.
    To ignore this sector and expect the Government to pick up slack and employ all those whom they have just put out of work with the lock down defies logic.
    First this Government seems unable to make anything happen, even after putting the funds on the table to make it happen, The lack of funds being the usual impediment to getting projects started.
    The current Government just lack the nous and or skill to get things started let alone completed.
    To believe that Government can solve the problem is a pipe dream. The only solution in the current environment is to devise incentives to get SME’s to employ and train more people.
    To this end the apprenticeship proposal is a good start in this direction.

    • You have made the odd good point Clifford J. You apparently think of yourself as a really experienced, informed, smart person. But the bit about government lacking the nous and so on is just drivel you and your fellow ‘tycoons’ have been repeating even before 1984 till you believe it right down to your small toe. Government provides the base course for business to operate. Good government funds research into important matters on which private companies can build businesses. It would be funny if you were a speculator-house builder or real estate agent or working with finance. Without government regulation these businesses go to pot. Since gummint lost its mojo and stepped back from its responsibilities businesses have gone haywire seeing business as a Santa Claus giving them profit opportunities at the expense of the general population. Now they have actually pulled finger you are shocked, devastated, and every morning you wind you recharge your batteries and go out to the offices, the bars, and other meeting places to express your dismay and chagrin.

  9. If we look back to the Great Depression. The jobs that were created were building railways and dams for power. That required a) worker’s, male, living away from family and b) actually working. Not what is acceptable for our computer screen addicted society. This country And those under 70 will most likely have no fucking idea what is required when you have to survive. Yes we have to create jobs. But what jobs will be created that people will be prepared to do. We can’t even fill existing vacancies in farming. If there’s not a fast food or cafe within five minutes we’re not interested. Good luck with this idea.

  10. Bryan if there wasn’t so much fear and control which epitomises the neo liberal stranglehold on everything and everyone not already financially independent then your regular posts would be televised and added to our daily newspapers for robust debate and reflection.
    Keep up the good work.

    • The companies may not have paid tax, but the mum and dad owners of those SME’s will have drawn the profits as wages and paid tax. This how most SME”s operate.

  11. thank you Bryan.
    see also work from economists at the levy institute on public service employment guarantee http://www.levyinstitute.org/publications/public-service-employment-a-path-to-full-employment
    one issue with the UBI is that it just presents another lever for neoliberal ideology to squeeze downwards with the old mythical argument that you have to reduce deficits.
    it would be much harder to justify tipping public service workers out of work.
    it would have to be administered locally for it to become a resource for local communities to provide services that wouldnt be provided by the market.
    and at a living wage so that all of the precarious and low wage jobs would have to compete with it.
    but at the end of the day we still have to convince middle nz that we can afford it.

  12. ‘Putting food on the table ‘ is a term that masks why we need so much income these days. It’s RENT and POWER and all the other unavoidable costs that leave little for food.
    For God’s sake when will we in New Zealand find the guts to stop this brutal grinding poverty.

  13. Bryan, I di hope that you soon recognise that ‘jobs’ and ‘the economy’ (along with the creation of debt/loans out of thin air and charging interest on those debts/loans) are the major causes of the predicament we are in.

    It naturally follows that the things which are the cause of a problem can never components of the solution to that problem.

    ‘If we look back to the Great Depression the strategy that delivered an economic recovery was government created jobs particularly through big infrastructure projects such as building schools and houses, improving the railways and tree planting.’

    That was then, and now is now, and now is utterly different from then. For a start, global population overshoot was only 1 billion, as opposed to the present 7 billion. Conventional oil extraction in the US was rising (been falling since 2007); many other oil sources hadn’t even been discovered (now pretty much all taped out. Atmospheric CO2 was around 300 ppm (only 20 ppm above the pre-industrial norm): it’s now close to 420 ppm (140 ppm above the pre-industrial norm), with dire consequences.

    It gets really tedious, going over the same ground time and time again, and people not listening. The system is ‘fucked’, and the system has ‘fucked’ the planet.

    There cannot be a recovery of the system: the laws of mathematics and chemistry won’t allow it. The only question is: how fast will the collapse be?

    • I have spotted a typo:

      ‘I DO hope that you soon recognise that ‘jobs’ and ‘the economy’ (along with the creation of debt/loans out of thin air and charging interest on those debts/loans) are the major causes of the predicament we are in.’

      And I have spotted my poor sentence construction, that could lead to misunderstanding, and which requires explanation:

      US conventional oil extraction peaked in 1971 (just as M.K. Hubbert, in 1956, predicted it would) and has been in terminal decline since then (with the ravaging of Alaska and piping the oil southwards, plus the insane* practice of fracking keeping up extraction in the short term.

      Global conventional extraction of oil peaked around 2007 and has been in terminal decline since. Terminal means it will never recover and will continue its downward path (just as predicted by ASPO in the early 2000s).

      What has been propping up global economic arrangements in the short term has been the highly-energy-wasteful and environmentally-devastating extraction of kerogen from the ‘tar sands’ of Alberta** and fracking (on the back of junk bonds and zero profitability in most cases), along with some deep water extraction (remembering Deepwater Horizon, and what a diabolical mess that created).

      With demand destruction [due to failed economic policies and failed Covid-19 policies], along with desperation on behalf of oil-exporting nations to earn a buck rather than no buck, oil prices have been ‘languishing’ in the low 40s a barrel. That is a price level which causes oil extraction companies to go broke or cut dividends to shareholders and cut expenditure…leading to less money in the ‘national coffers, job losses, and a decline in the viability of the companies.

      Meanwhile, there is the ‘small’ matter of stranded oil, whereby a large amount of the oil supposedly on the books of oil companies as ‘reserves’ cannot actually be extracted and burned because doing so would cause even more planetary meltdown than already experienced, and would disrupt the climate systems we depend on for food production even more than they are already disrupted. You could use either of the words ‘buggered’ or ‘fucked’ in that sentence, for emphasis.

      Put plainly, by extracting humongous quantities of oil (and coal, and natural gas) to run ‘energy slaves’ -in the form of car engines, truck engines, ship engines, boat engines, plane engines, helicopter engines, tractor engines, chainsaws, lawn mowers, leaf blowers, even domestic refrigerators- industrial humans have created population overshoot and have created utter dependence on that which is ‘killing the planet’: it’s not just the overheating of the Earth that is an impossible-to-solve predicament, of course, but is also the acidification of the oceans, the burgeoning quantity of plastics and micro-plastics that are everywhere -including in our bodies- the air pollution, the loss of habitat and loss of biodiversity that comes from loss of habitat, and the proliferation of pests and diseases that are a consequence of destroying natural systems and replacing them with artificial ones.

      That aspect was there for all to see in the recently posted article in The Guardian about industrial farming of chickens in the US, whereby the poor creatures live for a few weeks, packed into barn, with no access to anything a chicken would normally access -fresh air, sunlight, soil, insects and invertebrates for food- living in their own and their companions excrement, and fed unnatural food and growth enhancers and antibiotics, sufficient to keep the them alive until they are slaughtered, and then disinfected to make them ‘suitable for ingestion by humans’.

      Pardon my little rant there, but the entire system is disgusting! And people want MORE of it???!!! WTF!!

      Sure the abuse of animals and people -we are animals, of course- in NZ does not reach quite the extremes displayed for all to see in America (actually normally kept well out of sight, least the masses realise how awful the system is). But let’s have no illusions: farm production in NZ is largely based on animal abuse. And is largely based on abuse of the soil and water systems.

      Perhaps the epitome of dysfunction is sucking filthy water out of the contaminated Waikato River and pumping it to Auckland, where it has to be chemically treated to make it fit for human consumption. All of it at great energetic and environmental expense which is never counted, of course.

      I have no illusions about correcting the ills of our society. Been there, done that, and got well and truly clobbered for trying.

      Therefor, I believe those who operate this insane system will keep doing so, and will keep generating bad outcomes, until they can’t. All the political slogans and the media’s acquired blindness to reality and refusal to even mention it indicate that to be the case.

      On the other hand, I believe the stage of TPTB being unable to operate the system is not far off now.

      *Fracking is insane because it requires the use of humongous quantities of water, chemicals, machinery, and hydrocarbons to fracture the rocks in the substrata, to release trapped hydrocarbons. And the hydrocarbons released get transported to places of further processing and storage using yet more hydrocarbons. And the damage done both underground and above ground cannot be undone. But along the way a few people acquire some extra digits in computer systems.

  14. Dear Greywabler, my point on
    Goverment not having the “nous and skill” to get it done. Look at Kiwi build, secure the border et el.
    The Government have been skilled at identifying the problem, and indeed the solution, they put the money on the table to make it happen, but it stutters to progress.
    Why, because they lack a “get it done” minister. Look back at all recent Governments each had a key operator who made real things happen. In order Rodger Douglas, Bill Birch, Jim Anderton, Michael Cullen, Stephen Joyce. You may not appreciate what they did but they made it happen. Jacinda just does not have anyone of that ilk.
    Consider the “shovel ready” projects they are identified the funding is on the table. Do you believe, or have confidence, that Willy Jackson and Phill Twyford can actually turn that into jobs for the recent unemployed?
    I do not, that was my point

  15. This site needs better moderation of comments. I detest reading abusive personal remarks, especially directed towards contributors…bring out that ban hammer! [refers comment #1]

    There was a reason the welfare system became individualized but people have lost site of that story, while it has many issues they can be over come. Individualized welfare meant that more people got their needs met.

    When thinking about people with higher health needs for example, UBI’s most fervent political fan is TOP. They suggest that while UBI covers basics that the health system can allocate resources to those who need more, despite the fact the health system fails at basic tasks such as keeping people from becoming permanently blind demonstrating that this idea comes from people with absolutely no experience of how our healthcare system works on a practical vs theoretical level.

  16. UJC could work and seems like a better idea if UBI was the only other option.

    I get the sense any policy put in place will have an amplified effect…if it’s good it would be fantastic, but the reverse applies.

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