Australia's unemployment rate is 51%

[MJRomeo81]

http://www.theaustralian.com.au/business/opinion/remove-hurdles-to-employment/story-fnc2jivw-1226826592326#

Interesting article. Text is below for those who can't access the page.

ADAM CREIGHTON THE AUSTRALIAN FEBRUARY 14, 2014 12:00AM

AUSTRALIA'S unemployment rate is now just shy of 51 per cent. That is not a misprint.

While the official rate rose to 6 per cent yesterday, the Australian Bureau of Statistics' definition excludes loads of "economically inactive" people who either don't want to or need to look for work. It counts as employed anyone who worked for a little as one hour a week with or without pay.

In a country of 23.38 million people only 7.95 million have a full-time job, with another 3.51 million in part-time jobs — whose share of the total has more than doubled to more than 30 per cent since the late 1970s. Over the same period, the ABS reckons the portion of workers who are "underemployed" — or want to work more hours — has tripled to 8 per cent, and risen fivefold to 15 per cent among 15 to 24-year-olds.

Whatever the official statistics say, the workforces of the developed world have been progressively crumbling for decades, a phenomenon papered over by public schemes that keep people out of the official "labour force" and hence out of the unemployment statistics. The plethora of feckless "education and training" programs and growing army of people on pensions are the biggest culprits.

Even among people in work, a sizeable share isn't doing much inherently useful. Most bureaucrats could go on permanent strike without any impact on national production. Meanwhile the corporate world is teeming with overpaid staff whose contribution to their employers' tangible, saleable output is approximately zero. Some entire "private" industries, automotive springs to mind, have been kept afloat entirely by government subsidy.

The depressing accretion of government regulation and taxation over the course of the 20th century is partly responsible for this growing dearth of jobs. Economists say higher rates of tax, mountains of regulation and excessive minimum employment conditions stifle enterprise, the desire to work, and condemn many to the dole queue.

In one respect this triumph of mass leisure is a tribute to our prosperity and technical achievement, and one the brilliant Keynes expected us to embrace. The vast accumulation of physical and intellectual capital since the early 1800s has made it possible for the vast bulk of the population in rich countries to enjoy a standard of living Middle Age kings would have envied.

Writing in 1930s, Keynes predicted living standards for ordinary people in the advanced countries would rise by between four and eight times by 2030 — Australia's GDP per capita is up seven times since then — leading to what he called widespread "technological unemployment".

"This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour," he said. In the midst of the Depression, he pointed out "the increase of technical efficiency has been taking place faster than we can deal with the problem of labour absorption".

While politicians have no control over these powerful historical factors, they remain obsessed with boosting workforce "participation", especially women's and older people's.

Yet seeking full employment for its own sake is bizarre. Man's economic problem since the dawn of time has been how to avoid scarcity and produce more with less. However dignified work might be, as the former prime minister Julia Gillard said, humans have spent their existence coming up with ways to avoid it.

"We have been expressly evolved by nature --with all our impulses and deepest instincts — for the purpose of solving this economic problem," Keynes said. Leisure, for almost everyone, is preferable.

Primitive, stone-age societies had a 100 per cent employment rate — anyone not fit enough to work would die, and children would be dragooned into labour as soon as they could. Modern jails have full employment and Nazi Germany prompted full employment around the world as nations prepared for total war. The decrepit centrally planned Soviet Union achieved full employment too.

It is better to have less than full employment and produce more output efficiently. Artificial schemes to try to keep parts of the population employed in jobs that are not ultimately viable only distorts the labour market and even damages the prospects of workers themselves, as the demise of our car industry has reminded us.

The focus for governments should be on removing impediments to employment and production. Prospects for job generation would be improved dramatically if the federal government simplified minimum conditions and abolished "unfair dismissal" regulations and various affirmative action clauses. The massive rate of under and unemployment among younger people is a direct consequence.

Australia's participation rate — the share of the working-age population in or looking for work — is now at the lowest point in eight years. But this is not a concern to the extent this reflects older Australians choosing to retire earlier because of their own savings

This trend is likely to continue. While real incomes rise, the basic requirements for living a long healthy life (good food and comfortable shelter) are as fixed as the human condition itself.

"If the economic problem is solved, mankind will be deprived of its traditional purpose," Keynes noted.

[Professor Polonsky]

The article is quite meh. Aside from a passing mention, it completely ignores that the main reason for a lower rate of people in the labour force is that our population is aging, and that it can be a serious burden on our economy in the long-term future.

The depressing accretion of government regulation and taxation over the course of the 20th century is partly responsible for this growing dearth of jobs. Economists say higher rates of tax, mountains of regulation and excessive minimum employment conditions stifle enterprise, the desire to work, and condemn many to the dole queue.

lolwut, that's not the issue. Deregulation and privatisation have been the norm for ages now, tax rates haven't gone up for decades, and adjusted for inflation, our minimum wage is no higher than it was at most points in history. I don't doubt that Australian workers enjoy benefits at work that are the envy of even the developed world, but there is no evidence that suggests this is a serious burden on our economy. And it raises the question - even if rolling those back improves the economy, would it really benefit most people? Studies suggest that when you raise the minimum wage, the median wage also rises. It'd just increase the concentration of wealth at the top.

[slothpomba]

That title is very misleading 

There are segments of the population that will always be unable to work for whatever reason, legal, compassionate, age, disability, etc. For example, no one expects children to work or someone who is 80, that is part of that 51% figure. It's a very crude and dodgy calculation just dividing the workers vs the population and making a percentage of it. We could lower that 51% a whole lot of we sent children to work in the coal mines!

whose share of the total has more than doubled to more than 30 per cent since the late 1970s.

This increase in part time is either good or bad, someone who knows more about economics can probably shed light on it. It honestly just could represent a want for increasing flexibility on behalf of the employee. We have a lot more people in education and training than say 50 years ago, those people have to dedicate a significant portion of their time to education but they might want to work on the side. It's a reasonable explanation but doesn't mean its right (til we have evidence of course).

Even among people in work, a sizeable share isn't doing much inherently useful. Most bureaucrats could go on permanent strike without any impact on national production. Meanwhile the corporate world is teeming with overpaid staff whose contribution to their employers' tangible, saleable output is approximately zero. Some entire "private" industries, automotive springs to mind, have been kept afloat entirely by government subsidy.

That is an absolutely huge judgment to make right there.  How does he define whats useful or not? Does he have any data to back it up beyond the old tired anecdote that public servants just sit on their ass? The automotive industry generated much more than we spent subsidising it. Sure, the subsidies were large but so were the benefits. Every nation on earth subsidises their industries to a degree, we have to compete in a subsidised world.

The depressing accretion of government regulation and taxation over the course of the 20th century is partly responsible for this growing dearth of jobs. Economists say higher rates of tax, mountains of regulation and excessive minimum employment conditions stifle enterprise, the desire to work, and condemn many to the dole queue.

This is just ridiculous, stuff like this peaked around the mid to mid-late end of the decade and has been declining ever since. He says "Economists say", which economists? Who? Like his entire article, a lot of it is just the conventional wisdom people believe or is totally unsourced. Out of all the rich, western, developed nations, we're one of the lowest taxed of the lot. People can complain about taxes all they like but they don't realise just how much worse it could be (and conversely, just how good we have it).





Might come back to the rest later (10mins of internet left) but its dubious whether technology is causing massive unemployment (http://www.slate.com/blogs/future_tense/2013/09/30/technology_isn_t_taking_all_of_our_jobs.html). A lot of the jobs around in 20-30 years wouldn't have been heard of today. In the 70s few people could imagine computer programmer was a job, IT replaced a lot of jobs for sure but it also created a lot of jobs. Even machines in places like car factories need engineers to design them, maintenance technicians, programmers. More demand for machines means they need people to work on manufacturing them and obtaining the raw materials too. It isn't such a zero sum game as he might imagine. Let's also keep in mind there are so many jobs that are simply unpleasant to do and in an ideal (almost marxist utopia i guess) no one should be doing. Firefighting is dangerous as hell, its not really a job humans should be doing. Cleaning, picking up trash, even stuff like mining even though its become comparatively technological, the isolation is usually pretty big (in particular FIFO jobs).

[chasej]

What is the author of this article suggesting? We get 5 yr old kids working below the poverty line just to decrease the "unofficial unemployment rate" and remove "high taxation/regulation"?

[JellyDonut]

i know this is a necrobump but that title (and the article) is fucking lol