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The myth of jobs growth

Turnbull’s “Jobs and Growth” campaign inspired many in Australia to vote for whom they believed were the better economic managers of our economy. Yet in the first quarter of their second term in office, Australia is showing declining growth in the economy and similar decline in full-time jobs, reports John Haly.

The slave trade

The Hebrews and Greeks regarded work as a curse because slaves and the underclass performed “work”. Placing a positive moral value on “work” is a relatively recent invention emerging out of the Protestant Reformation. Max Weber, a German economic sociologist, wrote the book, “The Protestant Ethic and the Spirit of Capitalism coining the term the “Protestant work ethic“. The concept of the religious work ethic became secularized to support the rising new industrial system which required workers who would accept long hours and poor working conditions.

The unionism of the 19th century reshaped much of the makeup of “work” as we know it today. Consider ‘fair and reasonable’ wages (the 1907 Harvester Decision), better wages for women (as high as 54% of male wages by 1930), weekend penalty rates (from 1947), shorter working hours (down to 40 hrs in 1948) and four-week holidays (from 1973). Work health and safety reforms (commencing in 1984) and more consultative supervisory styles & policies (Industrial Relations Reform Act 1993) continued to transform working relationships.

In 1996 Howard introduced the Workplace Relations Act, which was later amended in 2005 (known as Work Choices). Workplace industrial relations began to change, but not necessarily for the better.  Anti-union rhetoric accelerated despite as Greg Jericho noted the lack of “strong evidence that changes to the IR system will actually improve economic growth or productivity“.

Diminishing working day

Image from tradingeconomics.com

The problem for many Australians is having access to paid work in the first place. A full day’s work (38 hr/weeks established in 1981) for a full day’s pay is a diminishing luxury in Australia. Full-time worker numbers are diminishing in preference for part-time work. The “fair day’s pay” principle suffers as wages are increasingly stagnating.

Image from tradingeconomics.com

The economy’s poor performance has been reflected in the September Quarter GDP’s figures, contracting by .5%. Australia has not experienced a contraction in GDP that severe since the GFC of 2008. This result was predictable, despite the Treasurer’s rhetoric talking up the economy.  While there are a number of factors that affect failing economies, our poor employment record is one, as Victoria University Senior Research Fellow Janine Dixon said, “Fixing unemployment would boost production, incomes and living standards.” Into this environment came the Coalition mantra proclaiming they were the party of “Jobs and Growth” that we voted for at the beginning of this contracted quarter.

The measures of unemployment

So, are we putting our increasing army of eager workers, to good use to recharge our vitiated economy? The International Business Times claimed misleadingly, “From 5.7 percent in July, Australia’s unemployment rate further went down to 5.6 percent in August. It is the lowest joblessness rate since the Coalition government came to power in September 2013”. While some conservatives may claim we were back on track, it does not stand up to scrutiny. The workforce size when the LNP took power was smaller and of course percentages are relative to that size. Using percentages hides real numbers. These are:

In term of actual numbers unemployed 5.6% in 2013, is 8000 less than 5.6% in 2016.

Image from bloomberg.com

For the Australians that can acquire jobs, the makeup of that employment has changed. In September of 2013 full-time employment was increasing at a greater rate than part-time employment but this has been reversed. A trend, which has not escaped international attention. As Alan Austin has pointed out in November 2016, “Over the last three years, there has been a significant shift from full-time to part-time jobs“.

In order to keep this critique relevant to the GDP downturn the statistics herein are relevant to the September quarter unless otherwise stated. (October’s ABS stats for unemployment were the same and November’s worse).

September end of quarter stats

Image from lmip.gov.au

The Australia wide Dept of Employment IVI index for job vacancies for September was 161.5K. This was down from 163.5K in August. Ratio of vacancies to unemployed was 1:4.4. However ABS’s standard for measuring unemployment hides thousands of unemployed people as I’ve explained in a previous article. The more accurate Roy Morgan’s unemployed statistic is 1.101 million or 8.5%. The ratio is then 1:6.8! If you add their underemployment numbers, you reach 2.103 million or 16.2% and the ratio becomes 1:13.

How then do we consider the Australia residents, who are not significantly measured by ABS as part of our workforce because of the 12/16 month rule? For example, foreign citizens with reciprocal work rights (i.e. Canadian, British, New Zealanders and etc). On October 31, 2016, there were 1,472,640 potential temporary foreign workers in Australia, 660,000 of which New Zealanders, 486,700 of which were students. Then there is the much maligned 457 visas holders in Australia, which the Dept of Immigration September Statistics number at 172,178. (Primary & secondary applicants).

What else should be accounted for? Available vacancies were examined in a report by Anglicare’s Jobs Availability Snapshot. Leon Moulden reported on the nature of job vacancies showing that only 13.1% were for low skilled jobs. Applying the same maths Leon did to the vacancies available, this would represent only 21,000 vacancies Australia-wide are applicable to people without significant skill levels and education. The ACSF from the Board of Studies in NSW scores literacy and numeracy into 5 levels. The program for the International Assessment of Adult Competencies shows that 60% of people not in the labour force have competencies of less than Level 3. While people “not in the labour force” is a wider net than the unemployed, 60% of Roy Morgan’s evaluation of 1.101 million unemployed people is 660,000. While this is only a rough estimate with a significant error variant, 660K people competing for only 21K vacancies with low skill entry is a significant barrier to entry. Now to absorb any possible margin of error, I have not factored in under-employed and foreign workers.

Enough with the numbers!

Let’s now depart from the maths and discuss the sociological issues that prevent people from finding work. Some media love to amplify the perception that everyone who is unemployed is a dole bludger, or the latest putdown acronym, NEETS. It’s their predominant strategy to divide welfare from the working class without a single consideration of any other mitigating factors, such as:

  • location suitability (interstate travel, home locality, & costs/inconvenience of changing residence),
  • employer discrimination, (bigotry, racism & misogyny),
  • accessibility limitations, (limits of public transport, car, bus, train, disability ramps, etc),
  • limits of literacy, skill, experience, qualifications & education levels,
  • competition for jobs, (705K [smaller ABS nos. only] people writing 20 letters a month for 161.5K jobs = an average 87 applications a month per vacancy),
  • financial limitations (For many surviving off the dole puts you below the poverty line),
  • financial burdens (family, mortgage verses poor wage levels),
  • injury, health & pre-existing illness or disability issues,
  • occupational risks inherent in the job, (i.e. firemen, riggers)
  • your status as the principal carer of a child, (i.e. single parents or guardians)
  • security clearance issues (i.e. Defence Force, ASIO, child safety, commercial sensitivities),
  • illegal under award payment, shockingly poor wages or condition by employers.

In summary, there are not enough jobs and the majority of available jobs are only accessible to highly skilled, mobile, and versatile workers.

Back to the first principles – slavery?

This picture isn’t yet complete. The Australian workplace for low skilled work is notorious for underpayment of wages (see 7-Eleven convenience storesfood distributors, restaurants and cafes). These are just the ones we hear about when addressed in court. Consider also those where actions have not been taken, such as the Woolongong student’s vent on social media about employers paying far below award wages. But the apologists might cry, at least they are receiving some money!  If you’re still of that view, then you didn’t read the last link to the concluding line which said, “Not only are employers looking for free labour, young people are putting themselves forward for unpaid work trials in the desperate hope they lead to a job“. So what has been our government’s response? An institutionalization of the PaTH to slavery in a government underfunded internship program which I have criticised previously.

Christmas hopes

It is nearly Christmas, and we have just had the largest fall in our GDP since December 2008. What budgetary measures can our Treasurer possibly come up with to stimulate our economy and it’s employment to save us from the official possibility of a recession.  The next quarter ends on the 31st of this month. When 2.9903 million live below the poverty line, what real chances do people have to find a decent job with a decent wage, in the new year?

About the author: John Haly is a freelancer writer and multimedia specialist. A beneficiary of a more egalitarian and tolerant political landscape in which he grew up, his observations of the changing harsher political posturing have prompted him to write articles on social justice and political issues.

Educated initially with a Bachelor of  Business, he followed these later with Diplomas in multimedia and graphic design as well as film studies at the now defunct Metro Screen. When not writing, he manages a freelance business, “Halyucinations Studios” in Sydney, doing work for clients in photograph, video production, design, IT support and web development and management. He is also the secretary of the film collaborative, NAFA, and a founding member of the Australia Arts Party.

Formerly a long time IT contractor for commercial banks (including the Reserve Bank), mining, transport, computer companies, government, university and a number of outsourcing firms, his introduction to the media was in two separate project management roles for the ABC. This developed an awareness of the need for advocacy for public broadcasting as well as providing a background in a diverse range of commercial and public service organisations.

A fifth generation Australian born son of an English teacher and an AICD Gold Medal Award winning  businessman – whose contributions to the finance sector were recognised with an Order of Australia. John has lived and worked here and overseas, although mainly around Australia and lately in Sydney, NSW.

You can follow John on twitter @halyucinations or on his blog at http://auswakeup.info/.

 


18 comments

  1. Carol Taylor

    I would ask one question: if unemployment is so low then why are wages so flat? It simply does not compute. Low unemployment *should* equate with businesses competing for workers and having to provide renumeration in order to achieve this. A large pool of unemployed keeps growth in wages down. How is it that Australia has both?

  2. Terry2

    With the scrapping of the Green Army I thought it would be interesting to see what the coalition were saying just two years ago :

    Here’s Greg Hunt :

    ”It’s giving every young person in Australia the chance to do something for the environment, and it’s bizarre that anybody would oppose, at this time, a youth training program that helps the environment and increases, significantly, the youths’ wages.”

    Now those same young people that the government were so concerned about are thrown back on to the dole : what a massive cop out.

  3. Wayne Turner

    Carol: The official unemployment figures are crap.You work at least 1 day a week,and are NOT counted as unemployed.You don’t work,study or register for benefits you don’t count as unemployed.Australia has a massive problem of underemployment along with the unemployed.

    Jobs and growth was always an empty lying slogan.Funny coming from Turnbull,who had said “Advocacy and NOT slogans” BEFORE the empty slogans.Sadly the gullible and ignorant don’t understand economics properly,and think running a country is like your own household budget.Plus of course the LIE REPEATED that the Liberal party are superior economic managers,by BOTH the Libs and their MSM.And NOT helped by gutless Labor who do NOT try to ALWAYS challenge this LIE.

    The Liberal parties policy for jobs and growth is based on the non-workings of the discredited “trickle down economics” ie: Tax cuts for businesses – Laughably many pay little or no tax already.

    Finally,the sad fact the Libs LOVE this situation – They look after themselves and their big business bribers ONLY.They LOVE the working poor or non-workers,as long as the Libs and thier mates continue on their self serving gravy train.Plus they maintain power by distracting the gullible and ignorant with distractons egs: “boat people”, “unemployed”, “muslims”… Aided by their MSM. When the real people that are the enemy is this government,their MSM,and their big business bribers.

  4. Jaquix

    Great article and one that we should be reading about in mainstream media. Love the graphics, very clear and concise. All point to a great big fail for the “best economic managers” who clearly dont have a clue what to do. Nor the will to do anything either.

  5. John

    The Australian Unemployed Workers’ Union writes, “It is one of the worst kept secrets in Australia that the Australian Bureau Statistics (ABS) produces misleading unemployment statistics.
    Even the former head of the ABS Bill McLennan has stated that ABS unemployment data “is not worth the paper they are written on”. Glenn Stevens, while Governor of the Reserve Bank, had similar concerns about the quality of unemployment data.”
    According to the ABS, Australians who work more than one hour are considered to be employed. This has allowed the Government to hide the true nature of Australia’s growing employment crisis.
    If you are sick of the Government lies around unemployment data, join the AUWU’s Fight for Facts campaign.
    To be a part of this campaign, next time you get a letter from an employer stating that your application for the job has been unsuccessful, ask them how many other applicants for that job there were.
    Forward that email onto contact@unemployedworkersunion.com and we will collate that data and release it every time the ABS releases its shoddy unemployment figures.

  6. economicreform

    Are tax cuts for businesses the answer?

    Tax cuts will be counterproductive – that is, will destroy jobs and economic progress – if accompanied by federal spending cuts. Jobs and economic progress are created by DEFICIT SPENDING.

    If one does not understand that simple macroeconomic principle, then one understands nothing.

  7. jim

    Granny Herald lA, let’s share musing: Let the cat out of the bag on 04.02.15 -Another of Prime Minister Malcolm Turnbull’s investments is under scrutiny, with revelations he has a financial stake in the global parent company of the scandal-plagued 7-Eleven empire. Fairfax Media can reveal Mr Turnbull has shares in two international investment funds that invest in Japanese conglomerate Seven & I Holdings. Seven & I’s major subsidiary is Seven-Eleven Japan, which is the parent company of 7-Eleven in the United States. The US company in turn licences the billionaire Withers and Barlow family, who own Australia’s scandal-plagued stores. As a Senate committee prepares to probe the wages exploitation scandal on Friday, Labor has claimed the investment raises concerns Mr Turnbull must address

    According to the International Monetary Fund, the Howard/Costello government was the most profligate in Australia for the last 50 years. Indeed, while the mining boom was gathering pace they cut taxes so far and so fast that they forced the Reserve Bank of Australia to rapidly increase interest rates.

    While countries like Norway took the benefits of resource price booms and banked them in their sovereign wealth fund, Peter Costello chose to cut taxes for the wealthy instead. He knew at the time that his populist generosity to the highest income earners would force future treasurers to choose between budget deficits or cutting spending on the sick, the poor and elderly. No prizes for guessing which our former treasurer prefers. https://www.theguardian.com/commentisfree/2015/apr/15/peter-costellos-five-most-profligate-decisions-as-treasurer-cost-the-budget-56bn-a-year

  8. jim

    Hi John (above) Cuts made by the LNP in 2014 maybe more if the truth ever came out, have made our ABS useless just like the LNP useless ..”Surveys have been cut altogether, we’ve seen changes to the methodology for doing surveys that really aren’t working properly,” said the CPSU’s deputy national president Alistair Waters.

    “Moving to trying to collect data online, that’s just leading to an awful lot of workarounds being done and often that’s just leading to interviewers having to go back into the field and re-interview people,” he added.

    The CPSU says $68 million was cut from the institution in this year’s budget. It says that came on top of a $10 million reduction the previous year under Labor.

    Over the 2013-14 and 2014-15 financial years, the organisation has lost 350 staff and also been without a chief statistician, essentially a chief executive, for months. http://www.abc.net.au/news/2014-10-09/abs-staff-say-data-undermined-by-funding-cuts/5801844

  9. crypt0

    Thank you for an excellent article, John Haly.
    Jobs ‘n’growth
    Jobs ‘n’ growth
    And so the good ship Oz sails fearlessly into the unknown …

  10. MichaelW

    Jobson Grothe is a joke as is the present government.
    How about they produce the real unemployment figures? Instead of the bullshit figures they are feeding us.
    The real figures are available from Centrelink, just tell us how many people are receiving unemployment benefits, simple.
    But oh no we have to cook the books by including people doing volunteer work to receive the dole as being employed, work one hour a week paid or not, consider yourself employed.

    The Roy Morgan research figures would be closer to the truth, if the real figures were disclosed I think we would all be in for a shock.

  11. Zathras

    MichaelW – exactly right!

    If you’re unemployed but declare to Centrelink that you helped the little old lady next door weed her garden for over an hour during the previous week they classify you as being employed but still pay you your full benefit.

    That’s one of the reasons the unemployment rate appears steady but the budgetary cost of welfare seems to be increasing.

    As for those working part-time, most will tell you that underemployment is the real problem and the fall-out from the Howard years has been a permanent state of employment desperation with people underbidding each other for a chance at the same McJob.

    Whatever the case, we’re being conned and also creating a new social underclass.

  12. metadatalata

    Fizza would have had a sigh of relief that their outsourcing of the Census resulted in such a debacle that no-one will ever know exactly how bad the economy has got in the past 5 years. And the future doesn’t bode well with the waste produced by their slogans. “A more affordable NBN”, “Jobs and Growth”, “Continuity and Change”, “F*ck the working class” (while this last one is not advertised, it does in fact appear to be LNP/IPA policy).

  13. Carol Taylor

    Wayne Turner, my sentiments precisely..the job figures are crap. “A job” should be defined as earning enough money to sustain a person with the basics to live, and clearly 1 hour per week would never fulfil even the most basic of needs.

    Surely any government who wants to know what to do to encourage real jobs & growth would also want to know the true statistics so as to know where to focus their efforts. On the other hand a government who wants rubbery figures just to cover up how bad things really are would be quite happy with 1 hour a week counted as “a job”.

  14. Harquebus

    There are not the resources required to sustain the economy let alone grow it. High unemployment and economic depression are unavoidable and the massive global debt mountain will never be repaid. One positive is that it will reduce our impact on the environment.
    An economic depression is probably the natural world’s and subsequently our last best hope.

    Cheers.

  15. helvityni

    Martin Hirst writes on Independent Australia;

    “Three-headed Shark Attack is terrible. It has poor production values, but a high body count, which is de rigueur for a B-grade horror film.

    Turnbull’s 2016 also resembles a B-grade horror movie, the script is boring and repetitive – “It’s Labor’s fault”; “Jobson Groath”; “Debt and Deficit Disaster” – and it doesn’t make much sense to the audience .” 🙂

  16. Alan Baird

    Good article and replies. The annoyance of correspondents is understandable when certain key points are conspicuous in their absence in mainstream media. The point about Labor being lazy in the current situation by one writer is well made and adds further to the conclusion that when Labor does poorly in future elections by not advancing a progressive advocacy when they can, it will be thoroughly deserved. However, at least they HAVE stuck to their guns against the company-tax-cargo-cult-scheme whereby tax cuts cause jobs to shower upon the Oz populace. Many people already know that tax is (already) avoided NOW and it’s a bit rich advocating a CUT. This last point has NOT been made by Labor however and lends credence to cynicism toward their stance. They still aren’t game to call out companies on this matter!

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  18. Pingback: Right or Left - the invasion of the neo-liberal agenda. - Australia Awaken - ignite your torches

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