A cabbie told me the other night that it’s really difficult to get people to work as drivers at the moment because there are so many more pleasant and better paid jobs on offer. This, he claimed, was the reason so many recent Sudanese immigrants are driving cabs in Brissie. We probably differed as to whether this is a good thing – I find the Sudanese drivers pleasant and polite and I’ve long had a gripe about the typical middle-aged grizzley white guy cabbies who love Lawsie and who, when Joh was still around, would often open a conversation with “Lotsa cranes on the skyline, mate, whaddaya think about that Joh”? In fact I once got so sick of hearing an anti-Keating rant I told the bloke I was PJK’s son (it helped that I was wearing a double breasted suit – not Zegna of course but only coz I can’t afford them) and was treated to profuse apologies.
But I digress. The point is that the labour market’s tight. Talk to anyone in any industry and they’ll tell you that people will quit jobs they don’t like at the drop of a hat, that it’s hard to find good staff etc. This of course, has happened before, it’s a consequence of very buoyant employment, but not for a long time across the economy. In a semi-deregulated labour market – because it’s a “freer” market – skills shortages and a low unemployment rate will naturally lead to higher wages. The Government, which trumpeted everyone’s prosperity in October, seems to think this is a bad thing. I’ve made the argument before against a national IR system, and I won’t go over that ground again, except to draw your attention to this response by the Queensland Government to Reith’s discussion paper in 2000 advocating a more integrated IR regime, which is no doubt being dusted off as we speak. The points made there are still valid, and worth considering for anyone inclined (as the Democrats and Gough Whitlam apparently are) to supporting this move – at least in principle.
As George Williams points out, we won’t get the theory but the practice, and once the business agenda’s been pushed through the Senate, it’ll be hard to restore effective employment protections. Those calling for “certainty” and “efficiency” might get a shock of course if the Government legislates only for the High Court to find that it’s ultra vires. What I will say is that the politics of further labour market deregulation need to be emphasised. And I don’t mean the leadership politics for the Libs, which Michelle Grattan comments on (expect to hear more of this tune).
Ross Gittins makes an excellent case as to why labour market “reform” is far from being urgent or even likely to be effective as a macro-economic policy – the purported link with interest rates that Costello’s been championing. Gittins also talks about why more economists don’t point out that the Government is largely talking populist nonsense and failing to address the real issues for the economy. We need to hear more from economists or we’ll keep getting bollocks from commentators like Grattan who don’t subject the reasoning behind the Government’s articulation of labour market deregulation to any criticism or scrutiny whatever (and let’s face it, this is the reason for the Government’s desire to take over IR not purported inefficiencies). My advice? Get that new job or that pay rise while you can.
The “skills shortage” is a load of baloney while we have over 5% unemployment (with the underemployment rate previously estimated by the ABS to be around 12%).
What is really happening is that those who hold a job that requires a reasonable level of skill are enjoying higher returns. The BCA and others (including many adherents to the multicultural cause) are looking for a way to cut unit labour costs. I guess they figured out that ratcheting up the immigration rate will force the government to address the labour surplus through deregulation.
The so-called “skills shortage” campaign is a trojan horse for the mass-immigration lobby.
The govt must know by now that it faces a rise in inflation over the coming year and is rightly using a bit of moral suasion(read rhetoric)to try and cool expectations. Here you should recall the govts media chat to corporate CEOs recently, not to indulge in pay rise themselves which would send similar messages to workers. Also they probably won’t mind some scaremongering by Labor on their proposed IR legislation, if it cools some expectations as well. All a bit like the Reserve threatening to raise interest rates if the property investors don’t cool their enthusiasm. Auction clearance rates have picked up again in Jan, after dipping in Dec. It seems wage, inflation and interest rate rises are probably on the cards now, whatever the rhetoric.
precisely why I’m busting my arse at the moment to get back into paid work in the finance game. There’s not many peoiple out there like me, or so I’m told, so why am I still trying to get a look in? Ye Olde Labour Market ain’t all that tight, methinks.
Probably because it’s not an integrated or seamless market but rather a very segmented one given the different skillsets demanded by different occupations and also the presence of structural discrimination within various labour markets (gender, age etc.). Contra Steve, I think it’s pretty clear that a range of industries (for instance mining, chefs in hospitality, some trades) do have skills shortages. Immigration is one answer – and not necessarily the only or best one. But I doubt that what appears in the AFR for instance is driven by a push for immigration except perhaps selectively (business often supports increased immigration but I haven’t noticed too many noises in this area recently).
Also talk of a tight labour market also supports their argument for IR reform, otherwise those damn workers might get far too greedy and use the shortages to push for higher wages or.
Except I can’t see the logic – it obviously supports the business case for IR reform – since they don’t want to have to pay more for staff and lose bargaining power. But as Gittins argues, telling Joe and Joanne Punter the problem is wage rises seems politically odd. So Costello has to run the interest rate line again. But aren’t we all meant to be enjoying unprecedented prosperity according to the government? I think that having the Senate restrain IR reform over the past 8 years may turn out to have been a plus for the Government – they could still claim that if only this or that bill would pass, then wages would rise, evil unions would disappear, employment would boom etc. The risk they run now is twofold – they’re entirely responsible for what happens in the economy and the workplace (particularly if they can cut the states out of the picture), and getting too close to the big business agenda pure and simple is probably a political negative.
I’d also be really interested in Ken’s, or any other resident lawyer’s take on the possible success of the power grab. It seems to me rather quixotic – particularly if you were to try to use the corporations power or something else to legislate a minimum wage rather than leave it to the AIRC as the Fin was saying was mooted today. But I’m no constitutional lawyer.
How far can other powers be stretched when there’s a clear statement of intent in the constitution that workplace stuff be dealt with through conciliation and arbitration? Or am I on the wrong track here?
“There’s not many peoiple out there like me, or so I’m told, so why am I still trying to get a look in?” — Niall
Maybe prospective future employers don’t want you boasting on the Internet about how you “destroyed their ego”? Just a thought.
I’ve deleted Yobbo’s comment because it was well outside the bounds of civility in terms of unwarranted abuse of another commenter. EP’s just inside the same bounds.
“In Praise of Older Women” by Stephen Vizinczey was also an interesting discovery for a hard-reading teenager with a permanet stiffy.
Opps, wrong thread.
Latest on skills shortages and IR:
http://www.theage.com.au/articles/2005/02/14/1108229927466.html
Tight labor market?? I am a 30 yo transexual residing in Australia’s biggest labor market, the Sydney region. for most of my adult life I have been unable to obtain sustainable, ongoing work. I have been trained in several areas of administrative work, it basically opened up for me a cul-de-sac as my look wasn’t the right image for employers. In recent times, having tried out my options as a female in non-traditional trade vocations, I found the same degree of resistance and overt employer hostility. I am presently a disability pensioner struggling to recover from a long battle with depression inter alia.
I know that employer resistance to minorities is huge, even I’ve heard it from my father, Director of nationally based wire & hoist merchant, http://www.activelifting.com, incidentally ran out of his spare room in a neighborhood of bluestones just off Fullarton Road in Adelaide.
Give the employer an inch, he’ll take a yard. Employers already have it far too good. If a person like myself who’s been skilled, intelligent [others say] and willing, what’s gone wrong?
Shauna, as I said:
“Probably because it’s not an integrated or seamless market but rather a very segmented one given the different skillsets demanded by different occupations and also the presence of structural discrimination within various labour markets (gender, age etc.).”
Very little has actually been done over the last 8 years to reduce discrimination in the labour market. In fact, it’s getting worse.
In Praise of Sudanese Cab Drivers
Link: Troppo Armadillo: In Praise of Sudanese Cab Drivers.