In the wake of his avowal of climate change denialism on Four Corners, Nick Minchin has spent the second last week of the Parliamentary year stoking the fires of Coalition opposition to the CPRS. Tony Abbott, previously a ’skeptic’ who argued that the opposition should nevertheless support the legislation to remove a political headache for the Liberals, has now turned tail, claiming “the politics have changed”.
In some quarters of the Coalition, the news that Copenhagen is unlikely to see a legally binding deal agreed has been seized on to claim that there is less political risk in voting against the legislation. Key here are the amendments Ian Macfarlane is negotiating with Penny Wong. If the shadow cabinet recommends acceptance of an amended bill, the legislation will likely pass despite masses of Liberal Senators and all the Nationals voting against it. So the Liberal right has been raising the bar for the negotiation process to ‘all or nothing’ – a position the government is hardly likely to adopt.
The open rumblings have now been spun to imply that opposition unity needs to be secured at all costs, and that it would be disastrous if the Nationals walked away from the Coalition entirely over the CPRS. (But would it?)
What are the implications of all this?
Continue reading ‘Road to nowhere’
My post last week on the decision to decrease the real wages of those reliant on awards for their pay by the so-called Fair Pay Commission sparked a somewhat heated thread, largely around the contention by some commenters that it was some sort of undisputed law that a rise in minimum wage rates leads to greater unemployment. Apparently, too, anyone who advocates anything other than a real wage cut for workers on low pay is morally bankrupt, and personally responsible for unemployment.
So, I was interested to read Ben Eltham’s piece in New Matilda today, which covers the FPC decision, and also segues into a valuable discussion of other aspects of employment in Australia. But what is key in the current context is Eltham’s citation of a study by John Quiggin and Steve Dowrick:
When John Quiggin and Steve Dowrick analysed the literature on minimum wages in 2003, they found little relationship between minimum wages and employment levels, but a very strong relationship between low minimum wages and increasing inequality.
Countries like the United States with low minimum wages had much greater levels of inequality than countries with higher minimum wages like Australia and the members of the European Union. The reason appears to be that holding minimum wages low doesn’t destroy many jobs, but it does have a broad impact on inequality by holding the wages of low-paid workers down across the board. “There is little reason to expect strong employment benefits from freezing minimum wages in nominal terms, that is, reducing minimum wages in real terms,” Quiggin and Dowrick concluded.
The Quiggin and Dowrick paper can be found here [link to pdf].
There’s surprisingly good news on the employment front for January, with unemployment only increasing by .3%, full time employment holding steady and female full time employment rising substantially:
ANZ economist Katie Dean said the stimulus package had worked to retain jobs in January in tandem with aggressive interest rate cuts. “The stimulus measures are having an impact,” she said.
Interesting news for the Liberals, you’d think. The Shadow Treasurer’s reaction?
The Coalition’s Julie Bishop said it showed the jobs market was strong enough not to need the “$42 billion spending spree” rejected by the Senate.
Right then.
Following on from one of the conclusions that can be drawn from the thread on Bernard Keane’s critique of the Rudd government’s involvement with bankers – that there’s a growing perception that the long term implications of “emergency” economic decisions haven’t been well considered – I was intrigued to read a report about a car parts supplier in Adelaide:
The Government is “actively considering” a joint submission from the Adelaide exhaust system and shock absorber manufacturer Tenneco and the Australian Manufacturing Workers Union that it provide accredited training and also pay the wages of the company’s 600 workers for days the company is forced to halt production.
I think we’re seeing an increasingly corporatist trend in economic policy, and what’s rather intriguing is that the usual voices of neo-liberal orthodoxy aren’t running around the shop demanding “let the free market rip!” (unless I’m missing something). Perhaps that’s because these sort of moves appear widely supported by big business.
If the Tenneco plan goes ahead, it puts some flesh on the government’s rhetoric about the need to preserve skills through a downturn due to the underlying shortages in the labour market. It might also be argued that directing wage subsidies to those already in skilled full time employment is preferable to targeting retraining and labour market measures to those same workers if and when they’re on the dole. Continue reading ‘Jobs, jobs, jobs (if you make car parts)’
The economic news of the day was a fall in the number of jobs advertised – as measured by ANZ – to “recession levels” – the eighth successive monthly drop. A number of economists extrapolated this to an unemployment rate of around 7% by year’s end. Of course, the trend may not be a straight line, but these things have a habit of being self-reinforcing. It’s interesting to note that the Federal Opposition could currently have their own favourite line of 2008 turned around on them – they’re arguably “talking up” unemployment at the moment. Julie Bishop might like to take a lesson from any number of Labor shadows from their decade plus in opposition – this doom and gloom isn’t necessarily smart, particularly when you’re briefing your mates in the press about how exciting it is that you might be back in power after only one term.
But of more moment, probably, is the response of those who actually make decisions about the labour market. Predictably, the Howard era Fair Pay Commission Chair, Ian Harper, warned that the low paid couldn’t expect much. This, despite the fact that the pay rises awarded by the FPC over the past two years failed to have the dire impact on employment predicted by business lobbies. It was interesting in this context to read a good piece by Mike Steketee in The Australian last week:
Some economists argue that cutting wages, particularly for the unskilled and low skilled, is the surest way of keeping more people in work. Quite apart from the fact that Labor’s ruling out such an option helped it win the last election, the main problem facing businesses is lack of demand for their products.
Cutting wages would reduce consumer demand further and it would run directly counter to the Government’s policy of putting more money into people’s pockets to try to put a floor under demand. In any case, the wages share of national income is the lowest for a generation, suggesting labour costs are less of a burden for business than in the past.
Continue reading ‘Unemployment and social responsibility’
Cross-posted at Event Mechanics.
Ross Gittins has an article in the SMH on the relative wealth of university students. It is interesting reading. I was helped out by my folks for the final year and a half of my PhD in a direct way. My mum also used to send me cash every now and then during my candidature so I could buy some broccoli.
Two things that Gittins does not discuss that are important to talk about.
Continue reading ‘Guest post by Glen Fuller: Gittins on student incomes’
Andrew Norton has posted on some interesting findings from Roy Morgan’s employment perceptions survey. Basically, there’s something of a disjunction – with 70% of respondents believing unemployment will rise over the next year (the highest since the last recession, and the third highest since the survey began in 1975) while 80% think their own job is secure (the same number as last year’s survey). 63% believe they could easily find another job.
These sorts of surveys demonstrate one of the weaknesses of opinion polling – we’re left to speculate on the reasons. It really would be extremely helpful if polling groups were to supplement such research with qualitative forms of enquiry such as focus groups, or qualitative aspects to the survey instrument.
But since we have to speculate, my guess would be that one or more of the following factors might be in operation:
Continue reading ‘Expectations about unemployment’
Recent comments
wilful, Jenny, Paul Norton, JohnL
Elise, Elise, Huggybunny, wilful, Elise, Fran Barlow [...]
David Irving (no relation), Deborah, Kim, Sam
Jenny, Sam, Kim, Doug, Paul Norton
Gummo Trotsky, Elise, Ken Lovell, David Irving (no relation), John D, Paul Norton [...]
David Irving (no relation), Mark, josh, joe2, Eat The Rich, Mark [...]
Kim, paul walter, Saint Furious of Ikea, Jacques de Molay, Fascinated, Deborah [...]
Helen, Kim, Helen, David Irving (no relation), Sam, Helen [...]
Roger Jones, David Irving (no relation), Elise, Paul Norton, Gummo Trotsky, Fran Barlow [...]
Mindy, Fyodor, conrad, Mindy, murph the surf., Lefty E [...]
nasking, Space Ghost, Vidar, senexx, nasking, Gummo Trotsky [...]
Mark, joe2, anthony nolan, joe2, anthony nolan, Mercurius [...]