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Economic experts put full employment back on agenda

By Louise Errington

CofFEE Director and CDU Professor of Economics Bill Mitchell was among the presenters at the Reconstructing a Full Employment Narrative conference in Newcastle CofFEE Director and CDU Professor of Economics Bill Mitchell was among the presenters at the Reconstructing a Full Employment Narrative conference in Newcastle

Top economists gathered in Newcastle recently to discuss the legacy of higher unemployment and the need for true full employment in the wake of the global financial crisis.

The Centre of Full Employment and Equity (CofFEE), a joint centre with Charles Darwin University and the University of Newcastle, hosted the Reconstructing a Full Employment Narrative conference, which discussed the current drive for fiscal austerity in many nations.

Gold Walkley award-winning Newcastle Herald journalist Joanne McCarthy gave an address, entitled “Economics and the Media”, which explored how the media frames, debates and influences the way the public considers complex issues.

CofFEE Director and CDU Professor of Economics Bill Mitchell said conservative framing could lead the public to think budget deficits were bad when, in fact, they supported economic activity and employment.

“Framing can lead us to accept economics’ myths as truths which subsequently can undermine our own welfare,” Professor Mitchell said. “The current fiscal austerity trend with rising mass unemployment is an example of this.

“When the private sector desires to save, deficits are essential to maintain strong economic growth.”

Professor Mitchell said the Australian Government could never run out of money and should run deficits large enough to allow the private sector to save and for unemployment to be low.

“It is a myth that the government deficit is a problem,” Professor Mitchell said. “The government issues the Australian dollar and has to ensure spending is sufficient to maintain growth and low unemployment.

“There is no basis in economics for the government trying to run a surplus when growth is declining.

“With the current slowdown in growth and rising unemployment, we can conclude the deficit is too low.”

Other topics included long-term youth unemployment, Indigenous employment, homelessness and flexible labour markets.