Stagnating Summit’s Shortfalls
By John Haly
Labor is seeking to have business and unions cooperate in spurring wages forward. This is despite decades of companies benefitting from increased productivity gains that have not resulted in increased wages for workers. This begs the question, what does Anthony Albanese think will improve wages, if productivity gains haven’t been doing that? More Visas, better skills training and fairer wage bargaining are considerations, but even Ross Gittins worries we won’t get it all from Labor’s Job Summit.
Strong Economy?
Wage stagnation coupled with the rabid supply-side inflation emanating from the war in Ukraine and the pandemic has meant real wages are falling, and solutions are thin on the ground. The economic inheritance left to the Labor party was described by the outgoing Liberal Party Prime minister as “strong”, despite:
- rising inflation,
- unrevealed reports about the pending rising cost of living issues,
- rising variants of Covid-19 worse than in previous years,
- impending tax rises for most Australians and $243B in tax cuts for the wealthy,
- diminished public service to handle the mixed successes and failures of the pandemic.
- Hiding a damning environmental report indicating the environment was in unsustainable decline.
So the Job summit has potential, but only if we correctly measure Australia’s problems. To quote my accountant father’s frequent refrain: “What gets measured, gets managed” conversely, “if you’re not measuring it correctly, you will not manage it appropriately”.
The only significant “success” the Liberals could point to was, the lowest unemployment figures from the ABS we have seen in decades.
“But while Labor will focus on wages and inflation, Mr Morrison will hope two sets of employment data due between now and election day – April 14 and May 19 – deliver him the lowest jobless rate since 1974”, reported by the Financial Review in April.
Productivity is booming so why aren’t wages?
International vs Domestic
On the surface, there is no word of a lie that ABS has reported lower unemployment figures since. The question is, are the ABS figures worth the paper they are written on (or perhaps, in this day and age – worth the hosting cost of the website they are published on)? ABS estimates its unemployment figures based on the ILO standards for a methodology of measurement that are internationally accepted to facilitate international comparative analysis.
For that purpose, each nation must conform to a standard everyone follows. The standard facilitates a common and verifiable point of comparison. For example, the US Bureau of Labor Statistics reported that the unemployment rate decreased to 3.5% in July 2022. In England, the Office of National Statistics UK unemployment rate was estimated at 3.8%. Whereas in Australia, it decreased to 3.4%, according to the ABS. Therefore we can conclude that Australia is doing better than our fellow western allies in the USA and UK. However, we need to ask whether, despite the comparative issue, do any of these numbers reflect the actual unemployment status inside the nation? It turns out the methodology of measurement that distinguished between international and domestic measures excludes hundreds of thousands of people who struggle with real unemployment inside each country.
As an Australian writer, I wish to focus on why it is the ABS does not, and certainly not in decades, measure real domestic unemployment in Australia. The fact that both media and political pundits represent that the ABS’s figures convey the domestic/internal measure of unemployment, as opposed to an internationally competitive figure, does the public a disservice and misrepresents the truth.
ABS a small subset of every other unemployment measure
To a limited extent, the public is not unfamiliar with the ABS’s methodology’s shortcomings. One has only to look to any social media posting about unemployment and find someone who angrily points out that “people are ‘employed’ if they work one hour a week”. The problem with this “shortcoming” is that it is easy and unnuanced to understand for the statistically illiterate. It is not entirely accurate or as significant as people think. I have previously dealt with the “one hour a week” misrepresentation in my article “Unemployment numbers likely worse than projected”, so I don’t want to rehash that. Instead, there is also the significance of the impact compared with people who have a “job attachment”, to use ABS’s terminology, but – because of their uncertain status in the GIG economy – have zero work and pay (90,600 in July – see graph). It isn’t folks who get a few hours on a shift once a month but people who get nothing and are still registered as “employed” by the ABS because of their “job attachment”. During the pandemic, the numbers in this class were significant (higher than one million – see graph), but they have dropped to the level of people working the equivalent of a single shift for a month.
Zero to nine hours of work with job Attachments all still “employed”
For example, in July 2022, there were only 54,900 people who worked between 1 and 9hrs in a month as a standard work arrangement. In addition, 66,200 worked similar hours because there was either “no work, not enough work, or stood down”. On top of that, in July, another 41,600 people had their working hours reduced to as few as 1-9hrs for “other” reasons that did not involve any form of leave (annual or otherwise), sickness, injury, maternity, plant breakdown or bad weather. These are all accordingly counted as “employed” by the ABS. Considering them as “employed” is technically accurate, although significantly underemployed. One certainly can’t be earning a living on less than nine hours of work a month.
Irrespective of where you put your cutoff point on working hours for registering someone as unemployed (and surprisingly zero, isn’t it), numerous other exclusions preclude people from being counted as unemployed. This fails the “so-called pub test”. I have listed these in my article “Frydenberg’s Maths problem”. The result is that, even if you added people who had a “job attachments” – but zero hours of work – the ABS estimate is smaller than, people receiving Job Seeker (let alone adding Youth Allowance – 15 to 22yrs – into the equation). There was a three-month period last year when that wasn’t true, which tells you that not all unemployed people register for JobSeeker. (Explained in “Josh’s Jobless Jargon”).
Real Domestic Unemployment
The real job gap for the under & unemployed vs job vacancies
These statistical anomalies leave Roy Morgan’s estimate as the best likely accurate reflection of domestic unemployment in Australia at 8.5% (or 1.2 million people). But of course, the Job Summit is unlikely to admit real unemployment is more than twice what ABS’s international comparative measurement standard, claims. As such, the Job Summit only acknowledges a subset of the genuinely unemployed, as the problem area. In that case, it is no wonder they are grooming us to believe that Job vacancies are rising to the point where there are close enough to absorb most of the unemployed. One supposes you have already read these “excited” claims in the media. In that case, the unacknowledged aspect is that they’re admitting there have never been enough jobs previously to absorb the subset of the unemployed that ABS claims. This renders all the previous admonitions to the unemployed to “just get a job”, pretty hollow.
Job vacancy breakdowns into industry & job type according to ABS & Dept of Emp’
That raises two questions:
- What is the actual gap between job vacancies and the under and unemployed
- How compatible are the job vacancies with the skills available in the community for the unemployed to be absorbed?
Zooming in on the industries with job vacancies
Now there are two measures of vacancies available. The Department of Employment’s internet vacancy index (IVI), and ABS’s quarterly survey of vacancies claimed by businesses. The IVI was more significant in previous decades than the ABS’s claim (see Roy Morgan graph). This discrepancy has changed in recent years, which I explained in “Vacant Claimants”. The fact is that even taking the largest count, the gap between job vacancies and Roy Morgan’s realistic unemployed figures is enormous. The opportunities for people with limited skills (lacking expensive university education) are just as limited now as when I wrote “The myth of Jobs Growth”. As you can see from the graph of divisions of jobs and industries where vacancies exist, most of them are still only available for the professional/educated market.
Farmer’s Plight
Instead, we still focus on the smallest unskilled end of employment opportunities, as depicted by the article this week, “Nobody wants to work: Fruit left to rot leaves, farmers feeling sour” page 8 of Tuesday’s (30th Aug) SMH. I long ago addressed this in “Low hanging Fruit”. Alternatively, the government could develop a comprehensive agricultural industry labour market policy. This policy should include government means-tested subsidisation of core wages at an adequate level, paying members of the agricultural workforce, with less profitable (but still essential) farmers providing monetary incentives to promote performance. This should include government coordination with Tafes and Universities and agricultural employers to provide a clear career path spanning entry-level agricultural roles to agriculture science and management qualifications at degree and post-grad levels. The package should include the government providing business coaching and mentoring to agricultural employers to build their capacity to be “employers of choice”. Adding offerings such as a cafeteria-style remuneration package of transport, accommodation, meals, training, on-the-job components of vocational credentialing and performance-based pay.
The contemporary issue, as usual, is poor pay and conditions, which the Job Summit needs to handle. The solution on offer is more migrants who will work for a pittance. This is in the face of over a million people unemployed in Australia and over another million underemployed. This statement is largely true of any month in the previous decade, with minor exceptions for underemployment before 2017 when it fell as low as 917,000.
Full Employment Summit?
The long-term perspective on employment and unemployment
Interestingly Albanese’s claim of the Job Summit was to seek a “Full Employment Summit”. But unfortunately, the neo-liberals adhere to the conservative myth of the NAIRU instead of a NABIER, which suggests we are already “fully employed”. A goal that has been achieved if you conclude ABS measures domestic unemployment. This is why “what gets measured” is essential. But, of course, if you want more realistic “full employment” policies, look at that instigated by the Curtin Government from 1945 to 1974. During which unemployment was dominantly measured at 2%. Then we would have the beginnings of a proven policy that survived decades until the introduction of neo-liberal policies under Whitlam, Hawke and Keating. For an informative reading on that, get a hold of Elizabeth Humphrey’s 2020 book, “How Labour Built Neoliberalism”.
The framework of a Federal Jobs Guarantee and what it could achieve for wages and workers has evolved from Curtin’s conception to a far more robust framework than that of the 1940s. Dr Steven Hail’s paper on a Job Guarantee is among the architects of alternatives. However, given that 30% of the attendees of the Job Summit are from the Business community and 30% from Unions, I very much expect such solutions will not even get a hearing in a barely two-day conference.
Given the minor target nature of political reforms exhibited by Labor to date where:
- they raise the minimum wage but not Jobseeker,
- send one family of refugees home but don’t address the rest,
- talk about addressing climate change but allow further gas mining,
- limit debt-related deductions for multinationals but refuses to concede an end to stage three tax cuts,
it is evident that state capture by industry donors is still a problem.
Hence we should expect far more modest recommendations from the Job Summit, which will involve more migrants, claims about needing even more productivity and further capitulation to vested business interests.
Real solutions
I don’t doubt that concessions will be generated from the Job Summit, but they will be bandages rather than solutions. But what would serious reform of the jobs market include?
- Restoration and widening the scope of the public service/taxation/health/education/industrial relations departments.
- Reviewing agricultural policy that subsidises agricultural employment – subject to annual review of employee conditions – to maintain viable, essential food security and attract Australians to farms. (As outlined above).
- Nationalising private employment agencies and implementing ambitious public sector-driven active labour market programs comparable to what exists in Scandinavia.
- An end to TAFE & university education fees to facilitate a more highly educated public that can reduce the growing professional job vacancies.
- Establishment of technically based career paths from entry-level positions to professional and senior executive roles.
- A return to centralised wage-fixing such as what existed in the 1970s.
- A decrease in the exploitation of migrant labour by increasing random fair work inspections of workplaces backed by substantial legal penalties.
- Expansion of cadetships and apprenticeships, and graduate programs in public service departments.
- End costly Public Private Partnerships infrastructure projects to staff public sector expertise for infrastructure development fully.
- A Federal Job Guarantee linked to career paths.
- Implementing a Green New Deal where energy and transport infrastructure is wholly returned to the public sector.
I am confident I can predict none of these, especially the re-conceptions of the public sector, will come out of this week end’s Jobs Summit. The reason is necessary, and fair reform isn’t on the agenda. Besides this, the way they measure Australia’s unemployment and the issues and focus on what job vacancies matter is misdirected.
This article was originally published on AUSTRALIA AWAKEN – IGNITE YOUR TORCHES.
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21 comments
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New England Cocky
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Sully of Tuross Head
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len
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Terence Mills
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Sully of Tuross Head
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John Haly
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andy56
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andy56
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andy56
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Sully of Tuross Head
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New England Cocky
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andy56
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andy56
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Terence Mills
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Return to home pageThank you for an excellent explanation as to why, unfortunately, the Albanese LABOR government has tied its political hands behind its back in an attempt to stay in political power for more than one term of government.
The Howard Disaster Years since 1996 have sapped the vision of LABOR pollies representing and improving the best interests of workers. Too much has been decided by focus groups of city cellar dwellers out of touch with reality and influenced by News Corpse propaganda. Fear of offending foreign owned multinational corporations and the American government foreign policies advantaging American interests has replaced thinking about growing Australian industry.
Globalism has failed because it moves American jobs away to Asia, especially PRC China, which somehow now has been morphed into the ”big bad economic wolf” wanting to consume the few industries remaining in America that American executives have not sent off-shore to reduce labour costs & increase corporate profits to benefit the executives …. at the expense of the now unemployed American workers.
Perhaps the correct government policies for Australia are to re-build manufacturing capacity on-shore, increase training and education to expand R&D because without R&D there is no economic future.
At least Labor is governing and attempting to correct the disaster that was the LNP years.
Negative 2nd guessers, like John Haly, permanent residents of the nay-sayers club and who never make it onto the those who matter list will knock them every week of their Government, for not doing exactly what they demand.
I note John does not mention he is an active member of a Political Party opposed to major Parties like Labor.
A quick Google reveals this as he did not see fit to disclose it.
Farmer’s plight – I doubt if fruit pickers need to go to TAFE to learn how to pick fruit. The shortfalls in the system are really long-term aspirations coming to fruiition. The plan is to destroy small & medium tier farmers and replace with Big Ag conglomerates – eg https://www.sbs.com.au/ondemand/video/2017484355934/the-feed-sold-the-farm
Sussan Ley blew it again this morning !
She was in the Channel Seven studio and being interviewed along with Jason Clare who was at the Summit in Canberra .
She was slamming the Summit as a talkfest and a stunt while : “I’m in Lismore talking to the real people (the flood victims)”………at which point Jason Clare jumped in and said “you’re not in Lismore, you’re in Sydney, I can see the Sydney CBD through the window behind you” (in the Channel Seven Sydney studio)
This woman is a walking disaster !
TerrenceMills, awesome, the only time in my life I have regretted not watching Channel 7.
What was her reply to that zinger of a putdown?
A couple of early replies to the above.
New England Cocky: It is their increasing adherence to neoliberalism, beginning with Whitlam’s small concessions to diminish wages (despite the many marvellous policies he enacted) to be followed by Hawk’s Accord and Keating’s privatisations, that have led us to this point. By the time we got to Howard, the door to neo-liberalism was wide enough open for Howard to wedge it and swing it open. Interestingly if you look at the shift to right-wing policies, a lot of it occurred while Labor was in power, and they backed away when the Liberals were in power. Interestingly, the pandemic and Ukrainian war have deleterious effects on globalisation, and nations realise their need for self-sufficiency. The future may not be so global, and rebuilding our manufacturing from a position as the lowest employment provider and the least economically complex economy in the OECD might be necessitated by global circumstances.
Sully: Attacking the messenger of bad news instead of the message is just so passé. Really? All you have to do is read my last article published here in AIMN at https://theaimn.com/partying-in-2022/ to get the full disclosure of my political affiliations and ideological positions. I have been completely transparent about it. There is a reference to my Blog, which is equally transparent. As for being an “active” member of a political party (which, incidentally since you didn’t mention it, is the Arts Party) beyond being very active in founding it, I can’t honestly say I have been very “active” in the last few years at all. In fact, if you read my previous article, I confess to having worked on the executive of a different but sadly failed political reform effort from early 2017 to mid-2019. As for the Arts party being “opposed to major political parties like Labor”, the Arts Party was very pro-Labor and was formed in resistance to Abbott’s reign, as the Liberal party had no Arts policies. People in the arts (journalists, media creators and actors, like myself) formed the party to get representation in politics which Labor accommodated. So your reading of the situation is wrong on a number of levels. Declaring my political affiliations in every article I write, is a huge waste of word space. As you have rightly observed, I have declared political affiliations found via google, in my profile both in AIMN and Independent Australia (where you most likely found it). Given I wrote that profile, saying that I did not declare it, is nonsense on numerous levels. Also, your misunderstanding of the Arts Parties’ relationship with the Labor Party reflects the fact that you never bothered to look up who they were. Please, if you are going to comment here, you are welcome to do so, but at least do a modicum of homework. What I wrote took weeks of research and preparation, so by all means, be critical, but do so about the message, not the messenger.
Len: Your right that fruit pickers don’t need to go to TAFE before picking, but the point was to provide fruit pickers with a path to TAFE or the agricultural industry built on their work experiences on a farm. So the other way around. Yes, it is about providing opportunities for “long-term aspirations”.
Terrence: To be fair to Sussan Ley (and I am not really that inclined to want to be), I assume she was talking about some past event rather than where she was contemporaneous with the interview. And (god help me) I sort-of agree the Summit will be an ineffective talkfest. Still, I am also aware the Liberals are terrified something good may come out of it that will affect their donors and the people who will offer them lucrative jobs when they exit politics. Other than that, yes, she is a “walking disaster”.
As I have said many times, the neo con agenda has been absorbed by the ALP too. Super was an attempt to work around the ideology of small government. How is that working out for those on the bottom rungs? How is it working out for the government? They have created another industry that acts like a parasite that has no growth limitations. I heard there are calls for the super industry to support housing. Fuck me, talk about going around the block to walk across the street. Thats 10% of my income that now goes to dead assets when the economy is crying for reform. The number one killer for average workers is the cost of housing. How can inflation be around 6% when rentals have jumped $150/week? Who has had a salary increase like that? Who would have thought the western disease would also hit china? See how their housing industry is taking down the whole economy. Obvious lessons to be learnt.
imagine if negative gearing, capital gains tax and $20,000 gifts were handed out to those going solar instead of housing. Imagine the abundant cheap energy we would have. Imagine the low cost of housing if those incentives were directed to where they are most productive.
Now wake up and see where we pissed our good fortune up a wall. Until the ALP is prepared to face up to the task at hand, they will always be LNP LITE.
Len, “Farmer’s plight – I doubt if fruit pickers need to go to TAFE to learn how to pick fruit.” Spot on.
How many other industries have been tied to this idiocy? Cleaners? Food handlers? Cable techs? The gatekeepers want a hand out. In 3rd world countries its called corruption. In australia its dressed up as bureaucracy.
Living in Thailand ( due to being shut out of the penal colony) has opened my eyes to the stupidity of gatekeeping. Give me the corruption here over your stupid practices. To run fibre cable to my home over 1.2km took 2hrs and cost 2000bht, about $50. I can walk down the street and buy some food for $1.50 from any street vendor. In Australia to set up a street vending truck would cost $50,000 plus the cost of the truck to set up. And then your paying $15 plus for a burger. Who gains from this madness?
John Haley, appointing yourself as the “Messenger” is just so passe, and expecting people to have read earlier your earlier articles gives you a sense of importance you just don’t deserve.
The last self-appointed “Messenger” I encountered was Scott Morrison.
Your views are your views, they are not the Gospel according to John Haley, and you give your opinion, not a message of fact.
Reacting to every post that does not treat you with the respect you think you deserve shows a very touchy, shall I say, arrogant personality.
I was not aware you had any official role here, apart from someone posting their opinion, it is not up to you to say who is welcome to post and who is not.
How pompous of you to say I am welcome to post here and under what conditions my welcome stands.
@andy56: I am liking your sensible suggestions regarding abolishing negative gearing to allocate that spending to residential solar panel installation. That would be a community building exercise producing jobs and economic benefits to householders.
Sadly, the Albanese LABOR government appears to have forgotten the workers of Australia.
New England Cocky, its about having policies that actual force the economy into action instead of stagnation. I will keep saying it till I am blue in the face, steering the economy into stagnant assets is fucked. Look at all civilisations that have thrived. They all had large government investments. Look at how they then died, governments retreated from the economy . What has propped up the USA? First NASA and now the military machine. What propped up the Roman empire? The Romans invested in their army. Now I am not saying we need to invest in our army but we need to break out of the stupidity of investing in holes in the ground and property. Its time we got rid of the dutch disease from our necks. We need to invest in high tech. We still have opportunities if we act now.
I was right. Didnt i say labor was LNP lite?
So pensioners can work an extra 1/2 day a week. well woopy doo. Why the fuck would you put road blocks? No news on the unemployed or disabled getting the same treatment. If your already working one day a week, thats $160 minimum wage. Would you rather work another day or half a day? If you want pensioners to work, why the fucking roadblock? We got the rational that it will cost $55m. How the fuck did they come up with this shit figure? They cant get any other statistic thats accurate, why this? And i would add, if it really is only $55m impost thats brilliant value for money. So then the obvious question is who came up with the ludicrous extra $70/week. Its so plainly inadequate. iF YOU WANT US TO WORK, 1,2 3, 4 DAYS A WEEK THATS FINE ,1/2 a day extra, fuck off.
There was some talk about re-establishing something similar to the Commonwealth Employment Service (CES) which Howard privatised.
Now, having seen these private operators at work – they tick boxes – I think a modern day CES would be a very good idea.
To those who have decried the two day summit as a talkfest just let me say that in my career I always found it productive to bring people together to talk, exchange ideas and sound each other out : it removes the them and us stigma that can stifle co-operation and mutual understanding.
We really need another summit on housing affordability !
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