The costs of unemployment

In this paper it is demonstrated that the measurable costs of the sustained high rate of unemployment in Australia are substantially higher than the alleged gains from neo-liberal (microeconomic) reforms. In addition, significant individual and social costs can be identified. Consequently macroeconomic intervention to reduce unemployment should be viewed as a priority, rather than the imposition of market reform with its uncertain impact. The paper concludes with a brief outline of a Job Guarantee Program, advocated by Mitchell that utilises the principles of the buffer stock mechanism to reduce unemployment. It is argued that the net increase in government outlays is modest and could be offset by a reduction in the level of annual corporate welfare.