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Viv ForbesStuck on Red & Other Essays (First Published by “Business Queensland” and “Common Sense” in 1990), pp. 65-67.About the Author»

An economic and social tragedy called unemployment is now rolling over Australia like a toxic smog. Generated in the poisonous hot air rising from every Parliament in the land, this murky soup of legislative and bureaucratic stupidity will suffocate the productive life of many businesses and their workers. Most of the victims will be unaware of the cause of their problems. Bosses will blame workers, and vice versa, while the real culprits cavort the world on fact finding trips or debate irrelevancies in the Industrial Relations Club.

The majestic and relentless progress of this tragedy is recorded like epitaphs on numberless tombstones in each day’s headlines.

Just one day last week produced these four headlines — “Jobless Queue Grows”, “Business Denied Tax Relief”, “Builder in Receivership” and “Recession no Excuse for Pay Cuts”.

This last statement reported a warning by Senator Cook that the Federal Government “would not allow rapacious companies to force pay cuts because of the recession”. Like the most callous general in Flanders, Senator Cook has just ordered another regiment of workers to sacrifice themselves on the unyielding bayonets of economic reality. In a recession, businesses must cut prices and workers must accept lower wages, or there will be unemployed gluts of both.

Governments have made huge efforts to hide our unemployment by keeping kids at school or transferring them to other agents of the welfare state such as Austudy, family allowances, retraining schemes or the public payroll. Irrespective of the fancy label, most of them are still unemployed and the cost of maintaining them will ensure that increasing numbers of productive Australians will be forced to join them.

We should learn from the Kingdom of Good Intentions.

Although small, it was a busy and fruitful kingdom. There was a farmer who was planning to buy a plough, hire a new hand and produce more pumpkins. There was a coal miner with a bit of money saved — he was going to employ another family without work. The king felt badly about this disadvantaged family. So he taxed the farmer and the miner and gave the money to the man without work (who thus became the first pauper in the kingdom).

The farmer used his savings to pay the tax. He could not afford to buy the plough or hire the field hand. The coal miner had no savings — he was forced to fire a gardener to pay the tax. There were then fewer jobs and more paupers in the Kingdom of Good Intentions.

So it is in Australia. Most of our long term unemployment can be traced to three political factors — minimum wage laws, excessive taxation and the dole.

A minimum award wage law makes it illegal to pay anyone less than some prescribed wage. No employer can stay in business if he pays workers more than they produce. Thus workers who labour is worth less than the legislated minimum must be fired.

The chief result of the minimum wage laws is to penalise those of limited talents — the young, the old, the unskilled, the handicapped and racial minorities. These workers are deprived of their right to earn even the moderate wage appropriate to their abilities and the community is deprived of their services. Unemployment is substituted for low wages. Those most hurt are those supposed to be protected by minimum wage laws.

Excessive taxation causes unemployment in two ways. Firstly it destroys jobs — payroll tax, for example, is a direct penalty for providing jobs. Secondly taxation reduces new investment — income tax, for example, reduces the profit available for re-investment, which is the sole source of new jobs. (Monetary taxes such as propped-up interest rates and exchange rates are more subtle, but have the same destructive effect as the honest taxes.)

Finally, growing acceptance that everyone has the right to a generous dole is destroying the incentive to work. Why should anyone work to earn just a bit more than they can get as a gift for lying on the beach?

People say there is a shortage of work, and we must thus invent work or accept the tragedy of long-term unemployment for our kids.

There never has been and never will be a shortage of work. There is a shortage of people able and willing to pay deluxe prices for standard labour. Unemployment can only be cured by repealing all the obstacles to employment put there by politicians of all parties.

The first step would be to abolish statutory minimum wages, abolish payroll tax and cut income tax. This should be follow by substantial cuts in dole benefits especially for able-bodied workers with no dependent families.

There is no other way to cure unemployment. We hear calls for increased government spending to relieve unemployment. This certainly can create pretend jobs in the public sector, but the accompanying increase in taxation or inflation will destroy an equal or greater number of productive jobs in the private sector. When the government spends, the economic drinks its own blood.

Unemployment is made in parliament. Only they can undo what they have done.

(in order of appearance on Economics.org.au)
  1. Lang Hancock's Five Point Plan to Cripple Australia
  2. Put Windmills in National Parks
  3. Magnifying National Disasters
  4. Please Don't Feed the Animals
  5. Buy Birdsville Made?
  6. The Economics of Flood Risk
  7. Touring Bureaucrats
  8. Our slip-shod laws to blame
  9. Why Wind Won't Work
  10. A Profusion of "Prices"
  11. R.I.P. Ron Kitching - pioneer, explorer, author, family man, entrepreneur, scholar
  12. The Carbon Pollution Lie
  13. Closing Down Australia
  14. The Anti-Industry
  15. The Pyramid Builders
  16. Carbon Tax Bribery
  17. Crown Monopolies
  18. Carbon Tax Job Losses
  19. What Next, a Tax on Water?
  20. Carbon Health Warnings Coming Soon
  21. Growth Mythology
  22. The Tax Collection Industry
  23. Propaganda Puts Paid to Proof
  24. The Milk of the Welfare Teat is Watered Down
  25. "Crops for Cars" as Bad as Everlasting Drought
  26. Poll speech sets record
  27. The Emissions Trading Casino
  28. The Contract Society
  29. A Model Ministry
  30. The Five Point Plan to kill the economy with High Cost Electricity
  31. Put a Sunset Clause in the Carbon Tax
  32. Stuck on Red
  33. Time to Butcher "Aussie Beef"
  34. Carbon Tax Lies and Bribes
  35. The Middle of the Road
  36. United against taxes
  37. Call for Govt administrator
  38. Property & Prosperity
  39. "The Science is Settled" BUT Durban Climate Summit Not Cancelled
  40. No End to Fuelish Policies?
  41. The Right to Discriminate
  42. Sell the CES
  43. Free Water Costs Too Dam Much
  44. Creating Unemployment
  45. Viv Forbes Wins 1986 Adam Smith Award
  46. 1985 news item on Tax Payers United, Centre 2000 and the Australian Adam Smith Club
  47. Having the numbers is not the same as having the truth
  48. Who's Who in the Workers Party
  49. David Russell Leads 1975 Workers Party Queensland Senate Team
  50. Caught in a welfare whirlpool
  51. Global Warming Season
  52. Mining in Queensland, Past, Present and Future
  53. WEATHER IS USUALLY UNUSUAL
  54. Political branch formed
  55. Ron Manners on the Workers Party
  56. Viv Forbes on Libertarian Strategy and the Constant Resources Myth
  57. The New Brisbane Line?
  58. Carbon Lies
  59. We Mine to Live
  60. Save the taxpayer
  61. Solving Three Canberra Problems
  62. Vested Interests in the Climate Debate
  63. Carbon Tax Retrospective?
  64. Carbon Price Propaganda Taxes the Truth
  65. Don't Burn Food for Motor Spirit - Feed People not Cars
  66. Two Big Climate Taxes
  67. Greens Rediscover Hydrogen Car
  68. Atlas of Australia
  69. Shutting Out The Sun
  70. Safety Mania
  71. Coal - Sinking in the Swamps
  72. Hobbling the Competition
  73. Cubic Currency Coming
  74. "Dear Government"
  75. Viv Forbes mocks Flannery in 1988
  76. What we have is not a drug problem but a drug law problem
  77. Smoking, Health and Freedom
  78. Privatise Now! while they are still worth something
  79. The Electoral Act should allow voters to choose "none of the above"
  80. The New Federalism
  81. Sunset for Solar Subsidies
  82. The mouse will roar
  83. The Road to Homelessness
  84. Planning & Prosperity
  85. Viv Forbes and Jim Fryar vs Malcolm Fraser in 1979
  86. Quip, Quote, Rant and Rave: four of Viv Forbes' letters to the editor in The Australian in 1979
  87. Australia's First Official Political Party Poet Laureate: The Progress Party's Ken Hood in 1979
  88. Our homeless regulation refugees
  89. Progress Party and Workers Party lead The Australian
  90. Viv Forbes in 1978 on loss-making government, the Berlin Wall and misdirected blasts of hot-air
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Forbes has long been active in politics, economic education, business and the global warming debate, and was winner of the Australian Adam Smith Award “For outstanding services to the Free Society” in 1986.Powered by Hackadelic Sliding Notes 1.6.5