Having said that, I agree with you that Workchoices does nothing to address the issues of concern to me (apart from adding a little more downward wage cost flexibility and making things tougher for welfare recipients).

Clearly there is a structural imbalance in the labour market – occupational, skill-wise and spatial – and it requires an active government role to fix it. I believe the Howard Government is starting to recognise this and has taken many useful initiatives recently.

Initatives like what? Workchoices certainly doesn’t address any of those issues.

For the most part, the low participation rate is a result of (a) structural imbalance and (b) personal characteristics on the supply side (such as mental, drug or alcohol problems) which do not respond well to the welfare stick.

I don’t think any of us argued that the unemployed weren’t responding to getting beaten with sticks to make them work. What I find most interesting about the situation is that skilled workers are getting pulled into the mining boom (skilled in this case not necessarily formally qualified, but with years of experience i.e. stockhands, shearing teams etc.) Perhaps these workers are far more comfortable with travelling for work and as a result have far fewer ties into their communities.

I’d like to see some statistics on the growth of the service economy vs. the long term unemployed. I would have thought people with mental or drug and alcohol problems were uniquely unsuited to any customer facing position. Anybody who presents poorly to an interview (and especially older men) are not going to be welcomed into this fold. Is this what you mean by structural problems i.e. we are creating jobs in areas that simply don’t suit the unemployed we have available? I’m not sure how we’re going to magically create (say) manufacturing jobs that might suit them better. Those semi-skilled positions where you used to learn on the job and never spoke to a customer have all been exported to China.

How many people are going to give up their $40 DVD players so we can have a go at finding meaningful employment for these guys? I suspect we’re all a bit selfish to do it, especially if we’re able to take advantage of the employment situtation at the moment.

This is the overall picture. Of course I am well aware that there are many areas such as inner Sydney, Canberra, mining towns etc. where there is excess demand for unskilled workers. But most of the unskilled workers do not live in these areas and generally cannot afford to move to them (especially if the jobs are potentially insecure). Where they live (in outer suburban, regional and remote areas) they find it hard to get as much work as they want.

Clearly there is a structural imbalance in the labour market – occupational, skill-wise and spatial – and it requires an active government role to fix it. I believe the Howard Government is starting to recognise this and has taken many useful initiatives recently.

I am not denying that there are many jobless or under-employed unskilled workers who lack motivation or a work ethic. But please let us not generalise from the particular to the general.

For the most part, the low participation rate is a result of (a) structural imbalance and (b) personal characteristics on the supply side (such as mental, drug or alcohol problems) which do not respond well to the welfare stick.

I am sorry but we must agree to disagree.

1) turn up on time
2) don’t steal from the till
3) ring in if they’re sick
4) don’t tell the customers to get stuffed or act like they think they should.

Workers who meet these criteria exist – but they’re mixed in with a substantial portion of those who don’t. Then think how much hiring one who doesn’t meet these four prerequisites costs you if you get it wrong – the work tests that you say are so onerous have workers who don’t want jobs hurtling round the job market at high velocity. You give them three months training, and then one day they don’t turn up.

You start figuring you’ll do something else.

Yet if my estimates are right you are only looking at 30% of the poor and ignoring the rest

and

(a) there an overall shortage of unskilled jobs relative to the numbers of unskilled under-employed (b) this imbalance is particularly acute in some regions and towns and (c) you will never get perfect labour mobility (occupational and geographical).

Fred, how do you account for the massive numbers of missing shearers and roustabouts on the farms of Western Australia? Every cocky says the same thing: “gone mining, can’t get shearers, can’t get workers”. That to me is labour mobility. There are towns in western NSW that are practically dead that 10 years ago were full of station hands. There is a shortage of skilled trainers for those kinds of jobs, that I would agree with. But getting workers is proving very difficult for some sectors of the economy (it would help if they payed more, but droughts tend to knock even the richest cockies around). We can’t discount the drought for some of the losses of opportunity, but there are plenty of jobs going begging even in drought affected NSW.

Occupational mobility – well, we need to start giving employers a kick up the backside instead of them relying on poaching workers from more generous firms, or relying on workers supplying their own qualifications. Trade unions could play an important role in this area in the same way that they supply health and safety training. Cost recovery could come from placement services.

As to the nature versus nurture debate, it is rather meaningless.

I’m not sure I agree with that at all. I think it’s important to avoid situations where we are categorising people by their genetics (for example) but to avoid studying it we may miss an important opportunity. I think it’s very important in the quest to “help those who cannot help themselves” – currently we don’t know what the help is we should be providing, and I’m damned if we should give up just because it’s hard.

I am a little bemused by the discussion between David Rubie and Andrew Norton. Both of you seem to be focused on the people who are poor ‘by choice’ and in the case of Andrew (but not David), implying that a bit more stick will help fix the poverty problem (“It’s long overdue to try something different”

I think that worrying about whether people are deserving or undeserving doesn’t really get us clarity on what to do about poverty. As Hamlet pointed out, if we all got our just deserts, no one would escape whipping.

I suppose that I think – without much in the way of direct supporting evidence – that most of what gets defined as poverty in Australia and other rich countries is obviously relative (but this doesn’t mean that it isn’t real), and that there is some subset (size unmeasured but potentially knowable) who have really significant problems who may need different forms of assistance – but who also still need money.

Maybe it’s just telling us that “sin”

The link to genetics was only brought in to show that there might be some other factors at work.

Well, yes, I understand that, and I happen to agree with you, as I said earlier. It’s the causality that’s difficult.

Why does the graph in ABS 4831.0.55.001 show what it does? I don’t know. I don’t believe it shows that low SES groups are undeserving of assistance because of what they spend money on. Maybe it’s just telling us that “sin” taxes don’t work.

David, I think it is indeed possible that there is some genetic component to the problems experienced by low SES groups. But people from your side of politics are normally very anxious to reject this possibility, fearing that it will be used as an excuse to do nothing to help them.

I don’t know that’s entirely true about the left (it’s an easy generalisation though). What I do think is that we’ve had many years of progress in the west, and we’ve seen most of the standard approaches in rich societies to poverty all fail. I’m in no way suggesting that we genetically profile people or write them off, but we should ultimately come to the understanding that the mixed market model we are using simply doesn’t suit a small minority of people. That is inevitably going to include a lot of different causes. I know the attitude is out of step with the traditional left, but I don’t think it’s out of step with the ideals of the left either.

Both sides of politics need to recognise that we don’t know how to help them. Part of this is our ignorance, the educated and successful have little idea what it’s like not to be in a society that puts few barriers in this path. We all seem to have a general understanding that there will always be criminals, why not poverty? Overall, I think the socially left ended up accomplishing just about everything they set out to do, and now we have edge tinkering. It’s long overdue to let a few of the failed policies wither and try something different.

SJ,

The whole nicotine/smoking thing was one of the examples raised to show that all those nasty poor people do is waste their overly generous welfare on bad habits and sloth. The link to genetics was only brought in to show that there might be some other factors at work. We all have our prejudices (why do rich stockbrokers waste all their money on cocaine instead of charity? etc.)

Obviously some of the behaviours we see in the inter-generational poor in rich countries are learned, but at this stage of our development, some are inevitably going to be inherited and it’s an area which hasn’t been fully investigated.

This I’d agree with, but it’s nowhere near as simple as a genetic predisposition to smoking.

Note that I’m no expert in this field, I just want to go over a few things I remember from reading bits and pieces on the subject a couple of years ago.

- There appears to be a genetic component to some affective disorders: depression, bipolar disorder, anxiety (“panic attacks”)

- Nicotine appears to be effective in controlling, up to a point, the symptoms of these disorders

- It usually requires environmental stress to induce the symptoms, e.g. bullying at school, parental abuse, death of a parent, trouble with the legal system, or later in life, things like pressure at work, loss of a job, death of a child or spouse.

The combination of genetic predisposition and stress can perhaps bring on the addiction.

But where’s the link between smoking and income? Through a link between genetics and income or through a link between income and stress? The later seems more likely to me.

The assumption is everybody wants to be out of poverty, and having seen a bit of it, I don’t think that’s true. I wouldn’t say they are lazy or unskilled in the derogatory sense it is usually applied, I would say that they mind it a lot less than you or I would. In the same way, quitting cigarettes for somebody genetically wired to have an addiction to nicotine could be an unbearable agony compared to not having the gene.

Obviously some of the behaviours we see in the inter-generational poor in rich countries are learned, but at this stage of our development, some are inevitably going to be inherited and it’s an area which hasn’t been fully investigated.

The blithe dismissal of the poor as unskilled and lazy is a mis-characterisation. Perhaps some prefer to live that way, some don’t know any better and a few of them are getting enough comforts to not bother trying to improve. I know this is usually used as an argument against social security schemes, but I think it proves we need at least some safety net if we are to continue using the market and property ownership as the basis of society. Some people won’t fit, will never fit, and lavishing them with gifts or beating them with sticks won’t change it. Somebody else will suggest we abandon social security and drop the minimum wage and these people will have to work, but they’ll be stealing your silverware or just begging in the street instead, which is something I would prefer not to see in a country this rich. I’d prefer to keep buying them off to stay at home.

I think we ought to give enough chances to people to allow them to improve if they want to, and make sure their kids are getting schooled and not starving in the meantime so they present less of an on-going cost in public health. I don’t think we should be actively punishing their kids for their parents behaviours (i.e. public schooling and universally available education are important).

A rare case in which Peter is wrong. The lowest SES group is more than twice as likely to smoke as the highest.

Family effects feature strongly in this correlation. Addiction to nicotine has been linked to genetics (see this.)

derrida derrider wrote:

In eight years in a welfare office I only ever saw dumb and/or honest people have their unemployment benefit sanctioned. It converted me to a lifelong supporter of an unconditional basic income.

It appears that in our social democracy, we’ve hit a point where there is a rump of people who quite literally can’t respond to either gifts or cajoling to lift them out of poverty. It isn’t that they don’t want help, just that they cannot use it. Berating them seems completely counter productive, especially where there are children involved. Attempting to sort people into “deserving” and “undeserving” will be so fraught with subjectivity that it requires a lot of caution before we implemented a policy around it.

compassion

responsibility

financial literacy

communication

history

NB that only one of these areas is a traditionally scholastic area, the first four are amongst those things that might reasonably have been expected to be taught/instilled/absorbed by osmosis at home (with the appropriate caveats re communication). Today they are probably, in my humble opinion, significant contributors to ‘class’ immobility and some of the competency problems you guys have identified.

This might help increase ‘capacity’ or general competence without decreasing (much) the scope for individual choice (and the scope for individual harm from individual choice).

Backroom girl, you ask which of my three categories is most likely to be associated with relative deprivation. I don’t do hard new research these days (perhaps someone from Family and Community Services can help) but let me have a go at breaking up the numbers of working age Australians who suffer deprivation of one sort or another (I leave out students living away from home and carers, who find it hard to live on their various allowances).

1. People with low earning capacity.

Unlike their counterparts in the USA, adult Australians who can work full-time or close to it but have low earning capacity are protected by a decent minimum wage and should not suffer greatly from deprivation. These people are doing it very tough (and feature among NATSEM’s ‘relative poor’) and need better education but real deprivation seems unlikely if they manage their budgets properly.

The exception is where they are being illegally under-paid by employers (and we know this happens with many newly arrived migrants). And there are some teenagers who are being paid trainee or youth wages and living away from home who may also occasionally suffer from deprivation even if they work a full week.

But, having said that, I accept that probably less that 10% of the people suffering from deprivation might fall into the category of people working full-time but with low-earning capacity. The numbers may increase if employers gradually reduce effective take-home pay for vulnerable workers (as seems to be happening).

2. People who are structurally under-employed

The big category is the under-employed who are jobless or only work intermittently over the year. We can safely say that those on Parenting Payments and Disability Pensions should be able to avoid deprivation (although not ‘relative poverty’ as usually defined) as the benefits they receive are reasonable. But there are many Australians forced to rely on New Start allowance (and these numbers seem set to increase because of the recent welfare measures) who are keen to work but live in the places where there are few jobs they can fill because they are devoid of skills and aptitudes required .

This is my ‘employment opportunities’ category and my guess is these people account for another 60% of the people suffering from deprivation. The answer is to invest more resources into bringing them into the job market and in the meantime (especially if they are renting and ineligible for family payments) beef up New Start allowance, which has been steadily falling relative to median earnings and is below the Melbourne Institute poverty line.

Deprivation by choice

This leaves 30% of people who suffer deprivation ‘by choice’. But let’s be careful here. There may be a few bludgers or loafers among them but they can’t survive for long under our very tough work tests and in any case all the surveys show that people on the dole are very unhappy (don’t like their work exclusion).

The 30% is made up mostly of people with mental, drug or personality problems who feel they are not able to work but are adjudged differently by Centrelink and are often penalized (with payments cut off for eight weeks). They need personal counseling and while there should be disciplinary measures they need to be less harsh.

So there you are: 10, 60 and 30%. It’s all very judgmental of course. But someone in the Public Service should be trying to sort them out.

I used to be a bit of a fan of “relative deprivation”

Human are perverse and by and large in the west, unhappy and more often than not, rich or poor, disatisfied with all that we have. We are spoilt rotten–literally. Unhappiness leads to all sorts of otherwise irrational behaviours, like smoking, taking drugs and frittering away limited resources on the acquisition of things we do not need or even more stupidly but understandably, trying to make more moeny through gambling in the vain and grim hope of a short-term happines fix and the approval of society.

There are many, many, people in Australian society who like me, have gone and are going without meals living a hand-to-mouth existance but most of these peole would never, never admit to it as there is a growing band of aspirational people these days have who simply have no respect for people with little or no money.

In my case to live like this, or to have lived like this, didn’t actually make me feel poverty-stricken as in many ways I am rich without compare and I am eternally grateful for that and for the experiences I have had because I have been poor.

It doesn’t matter how much fucking money you have, ‘normal human functioning’ is hard to sustain. Education is the key.

So from that point of view, if only one in eight report regularly missing meals that might be quite a good outcome. It also suggests that if such a relative deprivation study were rolled out to the whole population, we might observe quite low levels of deprivation as long as the list of essentials is not too long and all-encompassing (and as long as people were not considered deprived if they missed out on only one thing on the list).

Which brings me your point, Fred, about where all this takes us in policy terms. Taking your three different causes of ‘poverty’ (employment opportunities, earning capacity and behavioural problems), I would be interested to see whether the researchers are game to test which of these is most likely to be associated with relative deprivation. (I think you could probably guess which one I would be betting on, but we will never know if people choose not to ask the question because they are afraid of the answer.)

In your case, Crikey refrained from explaining the options to be paid, and also pretended that a marketing gimmick a – free 3 month subscription – was payment. Since Crikey is now a managed investment, that behaviour would have resulted from deliberate decisions aimed at reducing labour cost. That’s what’s obnoxius about it, by the way.

In the same way your naivity about media was exploited, the naivity of low-income people about money management is deliberately exploited by a range of nasty and big credit providers, with the results you apparently saw. Their meagre income is squandered on irrelevant goods and exorbitant fees to smartarses in nice suits.

Proper management of credit provision would be a useful tool in managing poverty, along with restrictions on poker machines.