The Forum > Article Comments > Solving poverty > Comments
Solving poverty : Comments
By John McKinnon, published 1/11/2006The World Trade Organisation is governed by a dictatorship of wealth.
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Complicated question.
Firstly, 4.9% unemployment doesn’t imply 95.1% employment. The unemployment rate counts the unemployed as a percentage of the labour force, which is people willing and available to work. Only 65% of the adult population is in the labour force, and the poor are disproportionately represented in the remaining 35% - retirees, the sick and disabled, single parents and others who, for whatever reason, can’t work.
Secondly, employment includes people on temporary and casual contracts and those in part-time work. I think the growth of this type of employment has on balance been a good thing, because most people who work these arrangements do so by choice (I’m guessing you’ll disagree). But a minority are taking this type of work because they can’t get the permanent full-time employment they’d prefer, and for these, the labour market is not delivering what they want or need.
I’m not denying that there are poor households with full-time workers, but they are a minority of poor households.
So some approaches to solving poverty can include:
1. Address rectifiable causes of exclusion from the labour market (‘poverty traps” in the tax system, tax breaks for child care, re-training from declining skills, English language classes for migrants, removing labour market regulation shown to discourage employment of marginal workers, helping injured or disabled workers find suitable employment if they are able);
2. Improve income security for retirees (e.g. encourage voluntary superannuation contributions)
3. Invest in education – a long-term solution, but education is one way of helping kids escape inter-generational poverty
4. Target welfare benefits better – this government has increased spending on welfare to record levels, but a lot of the money goes to the relatively well off.
5. Make sure governments deliver their core responsibilities in the provision of social infrastructure and public goods.