Who's Responsible If You're Unemployed?

You may have seen videos of a tree being cut down and falling in the wrong direction, landing on someone’s house. The repair bill would have been as big as a h… well, pretty big.

But who do you think should have been responsible for covering that cost? Would you say that it should have been the contractor holding the chainsaw? Or would you say that the house owner’s insurance company ought to have covered it? What if their insurance policy didn’t cover ‘act of timber’ – should they have to rely on their own savings for the repairs? What would have been fair and just?

I’m not actually here to talk about crushing houses into splinters. I’m going to talk about something even more crushing.

Involuntary Unemployment

Involuntary unemployment exists because the Government acts like the contractor with the chainsaw. I shall explain.

The amount of money that the government taxes out of the economy is greater than the amount they spend into the economy. This is a deliberate move – they correctly believe that spending too much would result in inflation, so they avoid this by under-spending and/or over-taxing. This creates a situation where there isn’t quite enough money circulating around the economy for people to buy all of the things that are available to buy. Shoes, TV’s, electricity… and labour.

Is Money The Problem?

Another way to think of unemployment is to see it as willing labour that hasn’t been bought. The problem isn’t that there’s no work that needs to be done or that unemployed people don’t want to work (remember I’m talking about involuntary unemployment). The problem is that there isn’t enough money there to connect work with workers and this was done as a matter of government policy.

Banks could try to solve this problem by injecting more money into the economy via lending, but the government would compensate for this by spending even less and/or taxing even more.

Here in Australia, there are more unemployed people than there are job vacancies. However, things look far, far worse when you factor in the number of under-employed people. The government has fudged the numbers so that anyone who works 1 hour per week is officially considered to be employed. The number of victims is enormous.

Treehouse

So, who do you think is ultimately responsible for ensuring that people who want to work aren’t left without a job? The government who caused the problem, the businesses who don’t have enough money or the individual?

My own sense of fairness tells me that the government should guarantee employment for those who are victims of government policy. They’re the ones holding the chainsaw.

Please join us

I had a good discussion with @ekklesiagora on one of his posts and we agreed to write a series of posts and counter-posts relating to Universal Basic Income and MMT's Job Guarantee program. I've created the tag ubivsjg for this series, so please feel free to join in.