Most people recognise the folly of blaming the victim, yet they don't always recognise when they're doing it. Today, many well intentioned practitioners who work to eliminate involuntary unemployment have adopted a mindset which reinforces the idea that there's something lacking in those who are unemployed.

The approach they take seems logical enough; businesses create jobs, so ask businesses what needs to happen so that they can hire more workers. The feedback often indicates that certain skills are in short supply in the labour market, so the obvious solution is to up-skill jobseekers to make them employable.

Let's imagine that businesses decided that Mars is the next big thing and that they need to hire armies of rocket scientists. Let's also imagine that it's feasible to train everyone who wants a job to become a rocket scientist. There's plenty of work that needs to be done and there are plenty of people who want to work. What's missing to connect the two is money.

In Australia, we used to recognise that the private sector didn't have the means to create full employment, so the Government created them instead. From World War II until the mid-1970's, we had no involuntary unemployment in this country, and it represented an injection of money into the hands of consumers which helped the private sector to become more prosperous.

Unfortunately, we then copied the mistakes other countries made in dealing with the 1974 oil crisis. The Government cut spending in order to reduce price inflation (which had been caused by high oil prices and not overspending). Are we really to believe that the sudden rise in unemployment that followed was caused by people forgetting the skills needed to do their jobs?

It would be nice to help businesses become more profitable by addressing their skills shortages, but training everyone to become a rocket scientist is something they can solve by themselves. The lack of purchasing power in the economy can only be solved by Government and, by returning to our old policy of targeting unemployment, everyone could be working productively within a matter of days.

Author: Mr Damian Penston
Damian Penston is the head of Fair Money Australia and an advocate for eliminating involuntary unemployment.