Throughout the 2017 New Zealand election race, the National Party’s central gambit was the repeated assertion that under nine years of stewardship, John Key, Bill English, and Steven Joyce have delivered remarkable economic stability and growth, despite hostile international conditions. Certainly, there are elements of truth to this narrative. Unemployment (defined as the number of people who have unsuccessfully looked for a job in the past month) has trended down from a peak of 6.9% in 2012 to currently under 5%. Inflation oscillates between 0-2%, and real GDP growth, while unremarkable, remains positive.
Labour’s tack was not to refute this story, but instead to hone in on a specific portion of it. While this growth was occurring, who was it benefiting? Essentially; ‘yes, we have collectively gotten richer, but some more than others’. However, Andrew Little was unconvincing, and lacked the ability to emotionally engage constituents. On the other hand, this was Jacinda Ardern’s forte. Whenever she spoke to the media, whether it was on the plight of the 90,000 NEETs, environmental degradation, or first home buyers being priced out, people took note. People wanted to get on board. Rather than convince resolute National supporters to jump the fence, she attracted the New Zealand First and Green crowd that – while they supported regime change – had been disenfranchised with the failure of Little to propose an inspiring vision.
The country later learned that any notion of a tight race had been completely fabricated. New Zealand First had always planned on going with Labour, regardless of the last minute bust-up due to Metiria Turei’s racism allegations directed at Winston Peters. The response from the defeated right-bloc was one of anger (in achieving a plurality but not majority) and apprehension, primarily at how the economy would function under Labour. Ardern and her financial deputy Grant Robertson strove to disprove the public’s view of them as ‘good with people, bad with money’ by laboriously costing out every proposed policy.
In her first few months, Ardern hasn’t shaken the boat. Talks on TTP (later renamed to CPTTP after Canadian posturing) continued as expected, and any tax shakeups will be long in the making as the ‘working group’ carries out its research. Surprisingly, it was the New Zealand First camp, Shane Jones specifically, who proposed the first actionable policy that seeks to target one of the campaign’s central tenets; unemployment.
Work for your country.
Jones, in his characteristic brashness and unconcern for decorum launched a media blitz in early December 2017, denouncing “ne’er do well nephs” for picking up a dole check while contributing nothing to society. Details are murky at this stage, but it appears that a chunk of the $1bn regional development fund could be appropriated to paying the unemployed to revitalize and revamp infrastructure and public projects in struggling areas, such as Northland, Gisborne, and the West Coast.
Commentators have wasted no time in casting their thoughts, from unlikely supporters on the right such as Mike Hosking (no stranger to accusations of benefit bashing) to skeptics who point to the cost, ethics, and Winston Peters ‘work for the dole’ programme trialed in the ’90s. Ardern herself was forced to put forward her opinion, and wasted little time in condemning the punitive nature of Jones’ proposal, little surprise considering coalition partners the Green Party ran on reducing welfare sanctions.
Whether a carrot or a stick is used is immaterial to the nature of the programme. Put simply, an initiative through which everybody who wants a job can get one at a livable wage is good governance, and good business. By maintaining an unconditional offer of a public job to any Kiwi, we can both improve the country’s infrastructure while eradicating persistent unemployment, the most aggressive cause of social fracturing in developed nations.
It’s not a new concept, Roosevelt’s New Deal included several works programmes (e.g. Works Progress Administration and Civilian Conservation Corps) for the millions of unemployed following the Great Depression, and resulted in the construction of public roads, bridges, schools, parks, arts projects, and the development of natural resources. Moreover, contemporary reports noted that the participants found “improved physical condition, heightened morale, and increased employability.” Developed countries in the mid 20th century often ran tacit job guarantee programs through national industries that hired almost any applicant. These nations often enjoyed unemployment under 2% (this was prior to the monetarist assertion of a ‘natural rate’ of some 4-5% of unemployment).
The most recent example of such an approach is Argentina’s Plan Jefes, which placed some two million workers. While its implementation was not flawless (it limited the number of hours available and number of eligible workers per family), it played an “important role in the Argentine economic recovery”.
Ardern is correct in stating that employees must be paid the minimum wage, not the dole. As a socially conscious modern nation, New Zealand cannot pay its public employees subsistence wages. It doesn’t need to. Paying a living wage incentivizes employees to carry out their task without resentment, while also removing the temptation to return to the relatively miserly dole. By paying the minimum wage, the programme does not compete with the private sector. In rough economic times, numbers in the programme will likely increase as private sector employment shrinks, and once the economy recovers, workers move back to higher paying private sector jobs from the programme. This promotes economic stability over the cycle
The costs of not implementing this programme are too great to ignore. Failing to provide employment for a nation’s citizens results in endless social problems; poverty, crime, erosion of professional skills, political instability, rural and regional decline. When participants of Argentina’s Plan Jefes were asked whether they would prefer to receive the money but stay at home instead of work, “every single one, without exception, said that they would not want to sit at home, and preferred to go to work“. Employment links the individual with the community.
‘Working for your country’ is the most exciting development to arise from the new Labour led government. Should it be implemented, the positive effects could very well see New Zealand become the envy of the developed world, who are fretting at a future of rising unemployment due to automation.
Jacinda: ditch the surplus, give us jobs.
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