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.