Tag Archive for 'jobs data'

Unemployment and social responsibility

Published
by
Mark
1 year, 1 month ago
in Economics, Industrial Relations, International, Poverty and Sociology
. 59 Comments

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.

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