I also explained why labour markets do not work efficiently and pointed to three market failures which required government intervention (assuming it works and does not create efficiency costs of its own).

what interests me about your proposals is your skepticism in the market’s ability to provide the same incentives.

wage subsidies to employers and incentives to firms to introduce more family-friendly workplaces when most of them are already screaming out for workers? Isn’t that just a tad superfluous?

more effective relocation incentives when people are already flocking in droves to QLD and WA?

Sometimes, you have to let the market do its thing. It usually works quite well on its own.

As owner of a small blue collar business, I used to employ anybody who turned up including ex-cons, druggies and long term unemployed.
Unfair dismissal laws gave me pause.When the NSW government added to corrupt and expensive worker’s comp regime, the concept of absolute employer liability for accidents regarless of the cause, I changed policy. Inexperienced workers with problematic backgrounds are much more accident prone. The fines and (of course) legal costs are very high.
I now only employ experienced workers.

People like Argy are so locked in anti-employer attitudes that they can never be constructive.

As to his detail proposals, they all very rortable and bureaucratic. Employers are expected to do massive paper work for small handouts. Only the crooks can be bothered.
The whole public sector teacher/coucilor/social worker class is completely opposed to assessment or real accountability. Try to get public schools to teach basic literacy and numeracy to underpriveledged kids before you try anything more complex.

The traditional approach to wage subsidies in Australia has been to pay them directly to the employer (who then passes them on to the less-than-fully-productive employee by paying the same wage that the person would attract if they were fully productive. But I wonder if this might not be a bit counterproductive in that some employers may still view this employee as costing the same as any other, but more particularly the employee to think that their labour is worth as much as any other. REsearch in the US has also found that if you target subsidies tightly to people who really would be unemployable or only marginally employable without them, then employers interpret the availability of a subsidy as a message not to employ the person, rather than the other way around

Perhaps a more transparent way of going about this would be to allow wages to adjust downward to accommodate low-ability and/or low-skill (for example, by allowing employers to pay a lower ‘training’ wage for some initial period) and subsidise some workers directly through the income support system. We do already do this for people who have low productivity because of disability or who are part of a formal apprenticeship or traineeship – why not for people with low productivity for other reasons like just having been out of work for a long time?

One comment I have heard is that (from Peter Saunders of CIS) is that “once the subsidy finishes the job placement often disappears”. But what is “often”? And what happens to the job experience of these people over the medium term?

Has this existing scheme been fully evaluated?

In principle, wage subsidies offer a more socially acceptable approach to the kind of wage deregulation advocated by right wing critics (which the electorate has rejected). If deregulation works, so should wage subsidies – provided the revenue cost is small and does not generate undue efficiency costs.

That said, I accept that there are administrative complexities which might not make it cost-effective in Australia. Nothing is easy in this game. Kevin might be on the right track. I also concur with Stephen’s “alternative” to remdial programs.

The problem may be overcome if we allowed individuals to optin to a different tax and benefits scheme along the following lines.

If a person optsin to the scheme then they get a flat income no matter whether they are employed or not. They also give up their rights to some social security payments such as unemployment benefits (or whatever it is currently called). They also agree that all other income they earn is paid into a single bank account and that the income is taxed at a flat rate and is paid immediately to the tax department.

If they “cheat” the system then they go back to the existing system.

This may be used by many people as a way of getting out of “poverty traps”.

On “more effective relocation incentives…”, could not agree more: I have argued for some time that a large barrier to mobility is housing; makes the labour market much stickier when so much of a person’s wealth is tied up in their home, effectively anchors many of our workforce in place. Greater proportion of rental housing, lower transactions costs in house purchase and sale (costs that are mainly a function of house prices), would all make a difference. But to get there, someone needs to bite the bullet on reducing the incentives for over-investment in owner occupied housing in Australia, and be prepared to deal with a possible decline in real housing values over time: politically unlikely.

remedying early childhood disadvantage, education and training opportunities, better services in low income areas etc. all desirable and efficacy supported by the evidence. not so sure about the remedial measures for 14-19 year olds dropping out of school: isn’t there a case for developing school alternatives that lead to employment and develop work skills (such as better structured pathways to apprenticeships or trade training, or other areas that emphasise manual skills) rather than putting all the eggs in the school basket?