Here are the answers with discussion for this Weekend’s Quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of Modern Monetary Theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.
Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained.
The US Bureau of Labor Statistics published the latest JOLTs data yesterday (July 7, 2021) – Job Openings and Labor Turnover Summary – May 2021 – which provides some interesting insights into labour market dynamics that run against the mainstream narrative. It allows me to calculate broader measures of labour demand and supply to achieve a more accurate indication of how tight or otherwise the US labour market is. Currently there is still considerable slack in the US labour market, some of it, outside the official labour force, and some of it in underemployment, as well as the official unemployment number. My estimates of the gap between labour supply (employment plus unemployment plus part-time for economic reasons plus not in the labour force but want to work) and labour demand (employment plus job openings) comes to 12,465 thousand or 7.75 per cent of the labour force. In February 2020, this gap stood at 8,076 thousand or 4.9 per cent of the labour force. So there has been improvement but there is still a lot of slack in the US labour market.
It’s Wednesday, and I have been filming most of the day some of the material that will appear in the next set of course material offered by – MMTed. We hope to offer some new courses later in September. But progress is slow (see below). Today, I provide some brief comments on my response to the Federal government’s latest – 2021 Intergenerational Report – which is one of the ridiculous, smokescreen-creating exercises that allow the government to avoid political responsibility for its fiscal surplus obsession. They come out every five years and are usually jam-packed with scaremongering about unsustainable fiscal deficits and the need for spending cuts. The only difference this time is that the damage caused by the years of following the austerity path – to health care, to aged care, to skills development, etc, have changed our attitudes. We have also seen that the government can spend what it likes without taxes going up and without bond markets declaring the government insolvent. We have now lived with large deficits as a result of the pandemic and the game is up on the deficits are bad and the sky will crash down story line. Our changing view on what we now demand from the Government is reflected in this latest effort.
Last Thursday, guest blogger Scott Baum analysed the recent decision by the Fair work Commission – Annual Wage Review 2020-21 – on June 16, 2021, which raised the National minimum Wage in Australia to $772.60 per week or $20.33 per hour. See his blog post at – The working poor are still poor in Australia (July, 2021). Today, I also review that decision as part of my annual surveillance on minimum wage trends in Australia. The Fair Work Commission, is Australia’s wage setting tribunal, and as part of that task conducts an annual wage review which sets minimum wages across the nation. The minimum wage determination then flows on to other wage rates (these are the wage awards linked to the NMW). The decision is poor because it will further undermine the real living standards of tens of thousands of low paid workers. In particular, the decision to phase in the pay increases (November 2021 for Group 2 Awards and February 2022 for Group 3 Awards) is a disaster for low-paid workers in the hospitality, retail and tourism sectors. Meanwhile the major employer groups argued for zero or mimimal nominal rise while enjoying growth in profits with rising productivity growth. A scandalous indictment of our system.
Last Friday (July 2, 2021), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – June 2021 – which showed that the recovery since the catastrophic labour market collapse in March and April 2020, continues with payroll employment rising by 850,000 in June 2021. The unemployment rate rose by 0.1 points to 5.9. However, the broader labour wastage captured by the BLS U6 measure fell by 0.4 points to 9.8 per cent. The US labour market is still 6,76 thousand jobs short from where it was at the end of February 2020, which helps to explain why there are no fundamental wage pressures emerging. The other notable point is that long-term unemployment now dominates among the duration categories published by the BLS.
Here are the answers with discussion for this Weekend’s Quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of modern monetary theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.
Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained.
Today, we have a guest blogger in the guise of Professor Scott Baum from Griffith University who has been one of my regular research colleagues over a long period of time. Today, he is writing about the impact the recent decision by the Fair work Commission – Annual Wage Review 2020-21 – on June 16, 2021, which raised the National minimum Wage in Australia to $772.60 per week or $20.33 per hour. I am travelling most of today and so it is over, once again, to Scott …
It’s Wednesday and I have been tied up most of the day with commitments. So we will have to be content today with a couple of snippets. The first about the on-going inflation mania and the way in which the ECB seems oblivious to it. The second about the gross incompetence of the Australia government, who has put the health of the nation at risk and forced state governments to invoke rolling lockdowns as only a small number of us are vaccinated and cases keep seeping out of a flawed quarantine system (the latter being the federal responsibility). And once the anger subsides from that little discussion, we have the usual Wednesday music offering to restore peace.