(Image: Private Media)

The much-anticipated jobs summit kicks off on Thursday, with 100 leaders from government, business and unions heading to Canberra for two days of economic dialogue. Their suggestions will be synthesised into a white paper, to be released next year.

But will this white paper be of historic significance? Or will it be a vague, inoffensive, design-by-committee document, to gather dust in a Treasury filing cabinet, reminiscent of something from the ABC’s bureaucratic satire Utopia?

A glass half full?

During the election campaign, Labor referred to the proposed document as its “White Paper on Full Employment” — a clear reference to the Curtin government’s post-war document of the same name. Anthony Albanese explicitly invoked Curtin’s nation-building legacy in his announcement speech.

This 1945 treatise is regarded as one of the most significant economic policy statements in Australian history. It heralded a new era of Australian governments pursuing ultra-low unemployment through more assertive fiscal and monetary policy, after the ravages of the Great Depression.

If Albanese were to pursue something like Curtin’s vision, it would represent a radical but welcome departure from the status quo. Since the economic crises of the 1970s and ’80s, governments across the Western world turned away from pursuing ultra-low unemployment in fear it was fuelling inflation. Government spending has since been relatively restrained, and interest rates reflexively high, to reduce job opportunities and thus consumer demand.

In essence: we stopped workers bidding up the cost of goods by kicking a significant minority of them out of work altogether.

Or half empty?

After the May election, however, Treasury began calling Albanese’s proposed document simply the “Employment White Paper”. Where did the “full” go?

Emma Dawson, executive director of think tank Per Capita, speculated it might have been dropped because some believe Australia has already reached full employment. Indeed, due to a mix of COVID stimulus, post-lockdown consumer spending, and fewer migrants, Australia now has more jobs than jobseekers for the first time since records began.

This is no small feat. This means hundreds of thousands fewer people subjected to joblessness, including long-term unemployment, which can be mentally and physically gruelling. Faced with a smaller pool of applicants, employers are also hiring and training jobseekers without multi-page CVs, and are reluctantly inching up their pay offers.

Some have worried the white paper’s name change might signal Labor backing away from low unemployment, in the face of business owners bemoaning their newfound difficulty in hiring.

This isn’t a crisis — it’s a deliberate feature of full employment. Businesses should have to work hard to recruit, including by raising their salaries and conditions to compete against other firms. As Joe Biden recently quipped, if bosses can’t attract employees with their current offer, “pay them more!”

There may be some genuine, short-term “skills shortages” in our economy — we need more nurses and teachers now, but training them will take three to four years. Solutions will be discussed at the jobs summit, including increasing skilled migration. But recruitment in these professions is made harder by low wages, which low unemployment puts pressure on employers to increase.

Our broken industrial relations system, which ACTU leader Sally McManus will also raise at the summit, slows and frustrates the translation of candidate competition into higher wage offers — for instance, new recruits might be offered more while existing staff are kept on old, substandard agreements. Nonetheless, low unemployment remains an important (though not sufficient) driver of upward wage pressure — just look to New Zealand, whose hot jobs market is starting to turn stagnant wages around.

Towards a glass overflowing

After possible prevarication, Labor appears to have quietly recommitted to keeping unemployment low. The summit’s recently released agenda devotes its first session, and the first chapter of Treasury’s accompanying issues paper, to “maintaining full employment and growing productivity”.

This move should be vocally supported — and the government held to its commitment — lest vested interests dominate the debate. Politicians have been banging on for decades about creating jobs, but when they finally succeeded, few wanted to take credit amid the howling of inconvenienced recruiters.

But it’s worth dwelling on just how significant our achievement is — and why we should fight to keep it.

“The greatest waste in an advanced economy is high unemployment; it is literally wasted human potential on a mass scale,” says David Sligar, a former Treasury economist who now teaches at Macquarie University.

Sligar intimately knows the human cost of job scarcity. “In the early 1990s recession, my family lost its small business, our house, my parent’s marriage — virtually everything we had”, he says. “My single mum was unemployed for most of the remainder of my childhood. With unemployment at 10% or higher for well over two years — 8% or higher for seven years — workers at the bottom didn’t stand a chance.”

“So an unemployment rate of 3.5% is precious, a tremendous achievement that will transform lives. But the benefits won’t all come overnight. With decades of lost ground, Australia needs a sustained period of very low unemployment.”

That’s why, though industrial relations and training must also be discussed at length, maintaining full employment is rightly in the top spot on the summit agenda.

How much of a priority should low unemployment be? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.