24 February, 2021

Trickle UP Economics

The government’s announcement that it will finally raise JobSeeker by $50 per fortnight, or $3.57 a day has been rightly criticised as being insultingly small. It continues the notion that unemployment is a personal failing which must be punished by living below the poverty line, without even the resources to find a job.

The myth of the dole-bludger has been pushed for as long as I can remember. People who are paid more in a month than you or I am in a year, keep telling us if unemployment benefits are too “generous” it removes the incentive to work.

If life was really so easy on the dole, I’m pretty sure a lot more people would be doing it. And at the front of the line would be the columnists, shock jocks and television talking heads who have been fomenting dislike and distrust of the unemployed for more than a generation. You don’t think these people do their jobs out of a heightened work ethic and sense of community service do you? No, they do it because it pays well. Bloody well!

And how hard can it be to sit on your arse in a studio talking out your armpit for a few hours a day about what you read in the papers that morning? And if you start to run out of puff, you can let the audience do the work for you by going to the call-in lines – provided your staff who do the real work have screened the callers to make sure they don’t call you out on your bullshit. Hell, I’d do that if I could. (Singo, call me!) As Robert Mitchum said of his profession, it sure beats working!

Meanwhile, the government continues to trot out the line that the best form of welfare is a job. It’s a fair point on face value, but it’s hard to believe they’re genuine about it when the best way to create jobs is to raise JobSeeker above the poverty line.

You can file the rest of this column under “I’m not an economist but I’m a real person who’s been around, seen a thing or two, and I’m not an idiot.”

Jobs are created by demand. Demand is created by spending power.

When the wealthy get a bit more money, they pocket it.
When the middle class get a bit more money, they might buy something nice or pay down debt.
When the poor get a bit more money, they spend it.

Those who hate the unemployed will follow up with the furphy that jobless people, being lesser beings not to be trusted with their own money, will spend it on The Wrong Things. This idea is not just ignorant and insulting, but also utterly irrelevant.

If you don’t believe the unemployed deserve to live dignified lives, that’s one thing, but let’s say for a moment that people on a fair JobSeeker rate don’t spend the entire difference on gaining employment.

Maybe some of them will spend it on decent cigarettes instead of black market chop-chop. That means three quarters of it will go back in tax revenue. Maybe some will buy a slab instead of a six pack. Maybe some will buy some nice clothes – they might be able to afford clothes made in Australia. Maybe some of them will shout the kids fish and chips for tea. Maybe some of them will put an extra $20 worth of petrol in the car (if they have one) and drive to the beach for a change. Maybe some will, God forbid, buy themselves a soy latte when they meet friends at a café.

Do you get it yet? The point is it’s all going straight back into the economy. They’re increasing demand and creating jobs. And it would be a steady stimulus, not the sugar hit of helping businesses to bring forward once in a decade purchases.

Poor people don’t hoard money. They can’t. That’s what poor means. When they have some extra, they spend it. Spending stimulates the economy and creates jobs. That’s before we even mention the increased dignity and self-esteem, and reduced stress and anxiety which may help people find employment

This is not a bleeding-heart argument, it’s a rational economic one. If we are serious about creating jobs, the simplest and most direct way is to increase JobSeeker above the poverty line – because the economy trickles UP.