The looming war on young people

James Riley
Editorial Director

The Australian Government’s extreme plan to force young unemployed people to wait six months before becoming eligible for welfare benefits has more to do with young people who have jobs, rather than those that do not.

The policy objective is not to punish the young unemployed, although that will certainly be an outcome. Rather, the objective is to scare the living shit out of young people who are in the workforce.

It is the blunt instrument to force cultural change, to create a more “flexible” workplace with more “flexible” employees. This hideous proposal is an attack on working conditions, as much as it is an attack on the unemployed.

This is what currently passes for employment policy.

Ever since Tony Abbott declared four years ago that the previous Coalition’s government’s WorkChoices industrial relations policies were ‘dead, buried and cremated’, conservatives have sought creative new ways to introduce workplace change.

The six-month wait for the dole for under 30’s is that cultural change. But it won’t be the young unemployed doing the changing (they will be too busy becoming homeless and unemployable.)

No, the cultural change will be among young people in jobs, too scared to do anything but comply with the demands of even the most unreasonable and unscrupulous of employers. What is the alternative?

A great many Australians are appalled at this Budget measure. It is heartless and pointless and will ultimately cost the budget bottom line far more than it saves. It also seems friendless. Even Heather Ridout – the Reserve Bank board member and former Australian Industry Group CEO (hardly a radical of the left) – has spoken out against the proposal as a bad idea.

The Senate cross-benchers have shown no interest in supporting the proposal. Perhaps this is why the public discourse has been strangely muted: People have simply assumed that it would never be implemented.

For such an extreme change of social policy – one that was never put to the electorate – it has not been properly or adequately scrutinised. And that is simply not how our society works.

Which brings me to my point. The six-month wait for unemployment benefits just seems terribly American. And for all the wonderful things that can be said about the United States, its treatment of the unemployed and its working poor is not one of them.

In the tech sector, the United States has always been our role model. And with good reason. It is a vast and incredible innovation machine – an engine room for productivity. There is a great deal in America that we should be looking to emulate.

But let’s not throw the baby out with the bathwater here. We need to recognise the great many things that we get right in this country. Implementing an American-style health and welfare system will hollow out our national character.

This very American proposal from Social Services Minister Kevin Andrews brings to mind the public memo that Nick Hanauer wrote to “My Fellow Zillionaires” which was published in Politico Magazine in June. Titled “The Pitchforks Are Coming … For Us Plutocrats”, it is utterly fascinating, and you can read it here.

Hanauer was a mate of Jeff Bezos, and was an early investor (the first non-family investor) in This made him spectacularly wealthy. Later he founded aQuantive, which he sold to Microsoft for $6.4 billion in cash (back when a billion dollars was a billions dollars.) And he has built or invested in a bunch of other technology companies since then.

Anyway, Hanauer lives in Seattle as a tech entrepreneur and has very particular views about the minimum wage and the demise of the great American middle-class. He contends that as the rich have got richer (fewer people, but each with more money), and the poor have got poorer, the US has lost its middle – and lost its customers. The great seething masses don’t have the disposable income with which to buy the products and services that keep the wheels of the economy turning.

Hanauer is a multi-billionaire who warns matter-of-factly that the rich-poor divide in the US will end in revolution. He is not saying the revolution will start tomorrow, but he is saying that on current trajectory, it is inevitable. That is, if there is not a change in thinking.

Of course, Hanauer is dismissed (and attacked) as a heretic but his billionaire brethren. But his arguments are compelling and certainly worth a read. He attacks the notion of trickle-down economics that sees nothing wrong with the growing rich-poor divide.

“The most insidious thing about trickle-down economics isn’t believing that if the rich get richer, it’s good for the economy. It’s believing that if the poor gets richer, it’s bad for the economy,” he says in Politico.

He also says: “Our country is becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back in 18th century France. Before the revolution.”

This article is not trying to draw a direct line between a minimum wage issue in the United States and the Australian Government’s awful proposal to force unemployed people to wait six months for any form of welfare payments.

But it is suggesting that Abbott Government is taking a leaf from the US book on social welfare – and it is a leaf we in Australia do not want and do not need.

Do you know more? Contact James Riley via Email.

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