If you want to create jobs, give them spoons

If you want to create jobs, give them spoons

By Katherine Teh.

We have a lot to be proud of as Australians this year. We endured unprecedented shocks to our way of life, our health, our economy and the very character of our nation.

But despite all this, we flattened the COVID-19 curve, a goal that appeared unimaginable just a few months ago, to end the year in a position not far from where we started.

As a small business owner, I shared the same joy as millions of Victorians emerged from stage four restrictions to resume ordinary business.

However, one doesn’t need to look far to discover the uncertainty that foreshadows the lives of all Australians, leaving an indelible mark that will be felt for generations.   

With forecasts of an effective vaccine arriving as early as March 2021, coupled with record spending in infrastructure, there is also a lot to look forward to, but with more than 1 million Australians out of work, the sound of trumpets has fallen on the ears of a more divided Australia.

On one hand, governments want to stimulate investment and restore consumer confidence, but by rallying the economy on a jobs programme, underwritten by record investment in infrastructure, the government has doubled-down on social inequalities that have only widened during the pandemic.

This is because, as any self-respecting economist would tell you, jobs are a cost on investment, not a measure of output.

While it is important that we get more Australians back to work, the shape of our economy means while job numbers grow, only a small percentage of Australians will benefit from the productivity gains of new infrastructure.

Consider, for example, if you were to buy a keg of beer because it was understood that alcohol consumption made employers more productive – only on Fridays, of course.

Therefore, if the second option was to invest that money to do good in the community, the latter would not be an acceptable expense because, in essence, the role of a director is to return value to shareholders.

The chink in the armour of our recovery strategy is that we are measuring success by the number of jobs created, rather than the development of new industries and human capital that will guarantee the success of Australia in the fourth industrial revolution.

There’s a popular yet likely fictious story about the US economist Milton Friedman. While visiting a dam construction in China he asked why, instead of modern earthmoving equipment, the workers used shovels?

Once told that the scheme was a jobs programme, he replied, “Oh, I thought it was a dam you were building. If it’s jobs you want, why not give them spoons?”

As economists, financial journalists and some politicians have started to acknowledge, jobs as a measure of wealth and productivity has been debunked.

What’s more important to our economic recovery is the impact on alternative employment, the output created by these new workers and the inclusion of the million-plus Australians that will struggle to access the recovery boom.

Governments are now tasked with the difficult dilemma of rebuilding the workforce while positioning the economy against a global decarbonisation agenda, underpinned by renewed confidence in the Biden Administration’s support of the Paris Climate Accord.   

It is incumbent upon all businesses and governments that we are cognizant of the 1 million people who are out of work and whom, without adequate training, will continue to struggle in the new economy.

We can do this by speaking to jobs while firmly addressing the long-term strategy of what we are trying to achieve, addressing both sides of the see-saw while carving out a clear vision for the future.

While unemployment figures remain as one of the primary scorecards by which our recovery will be measured, it is important to remember that people are the source of wealth creation, not jobs.

Leading into the new decade, our focus must remain firmly on serving the needs and values of communities across Australia through systems thinking and a clear articulation of where we are going.

And on that note, on behalf of the team at Futureye, we wish you a happy new year and look forward to working with you in 2021.