I’d be very sad to see Possum become a less regular blogger, but I have oodles of respect for his insistence on quality control, and the amazing amount of effort and time he puts into his psephological writing.

I think there’s a bigger point here about being a writer outside the mainstream media – some people make significant sacrifices elsewhere in their life to do it, and even if you see a few ads on a page, you shouldn’t make any assumption that anyone’s making a living wage from it.

It’s a big ask to do day in day out for years.

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?

The first is that it would effectively make Nick Minchin the de facto leader of the Liberal Party. Turnbull would probably survive, but greatly weakened, and boxed in to advocacy of a series of electorally unpopular positions (above and beyond climate change). Abbott’s spruiking “differentiation”. Whether Turnbull, in good conscience, could take a hard right line to the election – and almost certainly lose anyway – is an interesting question.

It may not be evident to all Liberals that this is their plight. The media circus over asylum seekers has probably convinced them that there is political traction in reviving the whole box and dice of Howard era rhetoric and policy, xenophobia included.

But, as Rob implies in reporting on Possum’s analysis of the CPRS polling, all they would be achieving would be shoring up a base which is a small and declining portion of the electorate. Minchin, Abbott and co. seem to forget that Howard also had a strategy for reaching out to the centre ground – until the right wing dogs of war were loosed with WorkChoices and other craziness in his last term.

The shenanigans about CPRS amendments also vitiate the one half decent line Turnbull had to run with on emissions trading. (The business about Copenhagen reflects a lot more about the Liberals’ own past obsessions and divisions than anything significant in the public mind.) He’ll be unable to claim, if shadow cabinet does not support amendments which have emerged from the negotiations, that the Libs are about protecting jobs.

Ironically, that’s the line of attack which – had it been consistently prosecuted – might have cut through. The government has not really made its case on ‘Green jobs’, having been diverted by the politics of industry greed, and reluctant to fight in any case on the ground of employment. But, in America and elsewhere, many Green jobs which have replaced Brown ones are the typical jobs of new industries – less well paid and more insecure. That’s not inevitable, to be sure, but in the absence of an explicit counter policy, it’s almost the default outcome in Australia too.

So what will the Liberals be left with?

A fight over their own soul – “standing for something”, the mantra of the Liberal right, is actually code for more power within the carcass of the opposition ranks. Standing for the sorts of things Nick Minchin and Tony Abbott want the Liberals to will bring electoral disaster, but will enhance their own position – and future prospects in the next term. None of this has much to do with any sensible politics rather than the contest over the spoils of opposition and the nature of the Liberal party. It’s got nothing much to do, either, with good public policy or climate change.

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].

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.

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.

But it’s also legitimate to raise a number of questions – about the viability of such businesses, and the bouyancy or otherwise of labour markets for workers with such skills, and probably more close to the actual point – whether these sort of schemes would only be available in manufacturing. I think that’s probably the case, and I think this has more to do with the Rudd government’s strong preference for support of the manufacturing industry than anything else.

I’m not sure it’s just about the unionised nature of such firms, either. I don’t think anything similar would be contemplated for unionised cleaners for instance, or child care workers, at the lower end of the private sector income food chain. It may be that a case could be made for this sort of program in the public interest, but ought it not to be made according to the actual reasons for selectivity, and the equity (as well as efficiency) justifications and implications set out?

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.

In short, it’s aggregate demand, stupid.

There’s some anecdotal evidence around that some employers are looking at other means of addressing costs than shedding labour. At issue here is also the skills shortage – it’s precisely the less skilled and lower paid who are at more risk in an economic downturn which widens inequality, as Steketee points out. So disinvestment in skills is also a false economy. But it’ll be interesting to see whether an understanding of the nexus between consumer spending and employment and employment expectations actually cuts through. Harper’s tired nostrums suggest that certain orthodoxies have survived the global financial crisis.

After a decade or so when we heard so much blah about corporate social responsibility, it’d be nice to see some recognition from business that the economy is part of that responsibility. That’s actually in the collective self-interest of business, but as Keynes and others showed, that’s precisely what the incentive structure of capitalist economics has difficulty incorporating. There may well be some room here for some creative thinking from government, going beyond pump priming. Fingers crossed.

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.

1) ‘Student’ is a structural subject position within the labour market. There are ‘student’ jobs. ‘Students’ get a discount on a lot of things from movies to public transport. The character of the labour of a ‘student’ is primarily based in the service industry and organised around affective labour. The economy (and hence capitalists) need students to carry out ‘student’ labour. I worked in a servo the four years of my undergraduate honours degree, only moving home for my final honours year to make sure I did well.

2) The nature of being a student has shifted from my parents’ generation to my generation. My mum got paid to go to teachers’ college and she was there fulltime (like 9 to 5 fulltime, not 20 hours a week ‘fulltime’). Given the option to go to uni for 2 years and get paid to do it compared to going to uni for up to 4 years and stuff around trying to balance study, work and the rest of life, I don’t know, but I think many students would take the two year option.

Why has this shift occurred? Two reasons.

Firstly, see point 1. Gittens does not mention this. Students don’t have much money sure, and ‘living like a student’ is probably a life enriching, if not humbling experience for many sons and daughters of privilege, but studying also ‘costs’ them at least two years of life and four years of bullshit labour that is required for the service-based economy to function.

Secondly, ‘fulltime’ students don’t show up on unemployment stats. Here is the ‘international standard’ definition of unemployment from this report:

[P]eople are unemployed if they did not work for at least one (paid) hour in the previous week, were actively seeking work and were able to accept a job in the next week if it were available.

Therefore, there is a governmental incentive to make unemployment figures look lower than the real employment problem in Australia, and most developed countries worldwide, under-employment.

My point is a simple one. Gittins sets up the problem for students in the economy as a lack of disposable and necessary income. This is wrong. The real problem is the structural position of students as having to become ‘student labour’ and hence a large proportion of the surplus labour used to control the casualised service industry workplace.

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:

(a) “The economy” itself is something of an abstraction in most people’s minds, and unless they can feel the impact of economic stats directly or by anecdote then it remains an abstraction. This is exactly the dynamic that explained the failure of various “beautiful sets of numbers” to give John Howard and Peter Costello any traction last year, and for that matter, vitiated the arguments in favour of WorkChoices. So, if there’s something of a lag beween the financial aspects of the crisis and their impact on “the real economy”, then it may be that expectations also show something of a lag;

(b) Relatedly, people tend to extrapolate to the future from the recent past, and more powerfully from their own experience than from history or meta narratives. So we would expect attitudes to employment and the labour market to reflect the most recent patterns, particularly among younger and more skilled workers. It may also be a realistic (at this point) implicit understanding of the fact that “the economy” is a much more disaggregated creature than it once was, with different sectors both occupationally/industrially and geographically more weakly correlated with overall trends. In that sense, if people are aware of continuing tightness in the market for particular jobs in their field, there’s a reasonably rational belief that the underlying skills picture may continue, and/or that their sector may be somewhat insulated from broader nationwide and global developments.

(c) “Unemployment” itself has a different subjective meaning due to the casualisation of the labour market and the increase in contracting. It may be that a recession no longer poses the threat of a non-existent secure permanent job disappearing just like that for many people, but rather a shift in hours or longer gaps between contracts. “Unemployment” as a lived category means something different from both its statistical and legal meanings.