MMT’s Job Guarantee: Learning from Australia's Employment Programs
Lessons from Australia’s Forgotten Jobs Schemes
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Australia’s labor market has seen significant changes in recent decades, with periods of recession, rising unemployment and increasing inequality. To tackle these issues, the government has implemented targeted employment programs, such as the Regional Employment Development (RED) scheme, Community Development Employment Projects (CDEP) and Jobs Compact. While these programs have attempted to reduce unemployment, each has distinct targets and features and had their limitations.
The RED scheme, introduced by the Whitlam Labor government in 1974, aimed to provide public sector jobs in regions suffering high unemployment. Projects such as improving parks and recreational facilities were funded by the federal government and managed by local governments. At its peak, the RED scheme employed nearly 32,000 people and reduced unemployment in target regions. However, the scheme was criticized for its cost and inefficiency and was discontinued in 1975.
The CDEP, introduced by the Fraser government in 1977, provided employment and training opportunities for Indigenous Australians. It funded short-term jobs and skills development projects in local Indigenous communities and was administered through Indigenous community organizations. The CDEP ran for nearly 40 years before it was replaced in 2015, but debates continued about its effectiveness and limitations.
The Jobs Compact, introduced by the Keating Labor government in 1994, aimed to encourage private sector job creation through wage subsidies for employers who hired long-term unemployed people, particularly youth. However, the scheme was limited by reliance on employer take-up of the wage subsidies and its narrow focus on the long-term unemployed and youth. It was discontinued in 1998.
These employment programs demonstrate the potential promises and limitations of targeted initiatives. To develop more effective and sustainable policies to tackle unemployment and inequality, a synthesis of their key features could be used to inform a comprehensive Job Guarantee.
Proposed by Modern Monetary Theory, a Job Guarantee would serve as an ‘employer of last resort’, providing universal employment by funding jobs in essential public services for all who seek work and are willing and able to work, but cannot find employment elsewhere. Jobs could be tailored to meet community needs and support career progression, with a focus on equity and overcoming barriers.
While there are implementation challenges, a Job Guarantee could provide an automatic mechanism to achieve full employment by offering paid jobs on demand. It could meet community needs through public services and infrastructure, while supporting workers with job security, skills, and fair income.
The experiences of Australia’s RED scheme, CDEP, and Jobs Compact could inform the development of a Job Guarantee, combining ambitious scale with sustained opportunities. Although a Job Guarantee of sufficient magnitude has not yet been implemented, its potential merits may be worth piloting to tackle persistent unemployment and inequality.
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