The ageing impact on Australian labour force participation rates

Labour force participation rates are falling around the world signalling the slack employment growth that has accompanied the aftermath of the Global Financial Crisis. It is clear that many workers are opting to stop searching for work while there are not enough jobs to go around. As a result, national statistics offices classify these workers as not being in the labour force, which had had the effect of attenuating the official estimates of unemployment and unemployment rates. These discouraged workers are considered to be hidden unemployment. But the participation rates are also influenced by compositional shifts (changing shares) of the different demographic age groups in the working age population. In most nations, the population is shifting towards older workers who have lower participation rates. Thus some of the decline in the total participation rate could simply being an averaging issue – more workers are the average who have a lower participation rate. This blog investigates that issue for Australia as part of a project aiming to get more accurate measures of hidden unemployment.

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Argentina versus the Vultures – simple solution but leave morality out of it

There are several petitions circulating around the Internet at present condeming the US Supreme Court’s decision on June 17, 2014 to reject the appeal by the Argentine government against a prior US court ruling in favour of NML Capital Ltd, which effectively denies the Government access to the US banking system until it repays the outstanding liabilities that NML holds. The implication of the decision is that the Government can no longer service any liabilities is has which require payments being made via the US banks. That means the vast majority of the so-called ‘exchange’ bond holders, who took settlements in 2005 and 2010 after Argentina defaulted on its public debt obligations, cannot be paid until NML, who has a small amount of so-called ‘hold out’ Argentine government debt, is paid in full. What can the Argentine government do in this situation, given it has been fully servicing the exchange liabilities but claims it cannot meet the original liabilities held by NML? The answer is simple and doesn’t involve putting advertisements in US newspapers pleading the fairness of the situation. There is no sense of fairness involved.

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A trail of misinformation and manipulation

Last week, the national broadcaster ABC’s Media Watch program – Up in Smoke – took aim at the Murdoch press (in particular, the Australian newspaper) for misleading reporting. The News Limited rag (it is barely that) has been running a campaign via headline claiming that Australia’s world leading laws on plain packaging of tobacco products have failed. Of-course, News Limited is just the conduit. Lying behind the headlines are rather secretive right-wing think tanks who pump out propaganda every day which aims to undermine government intervention and activity in favour of the industrial and other interests that just happen to fund the propaganda. These organisations hold themselves out as being non-partisan and independent – only offering an evidence-based viewpoint. The only problem is they clearly do jobs for bobs and manipulate ‘evidence’ to the point of absurdity.

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Saturday Quiz – June 21, 2014 – answers and discussion

Here are the answers with discussion for yesterday’s quiz. The information provided should help you understand the reasoning behind the answers. 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.

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A blog lay day

A few years ago I decided that I would not write a blog on Fridays unless something big was happening. Instead I was using it as my notes for the development of our textbook, which you will pleased (or not) to know is nearing completion and should be published before year’s end. This year I have been using the Friday spot for on-going development of my Europe book, which is in the final stages of editing. So today I decided that I could use all my time for that latter task and the product of that editing is not of ‘blog interest’. Therefore, a blog lay day. Although I have been studying all the documents surrounding the Argentinean debt saga, which would have made a nice story today. The Argies have the vultures licked and I hope they know that!

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German economics minister “austerity policies have failed”

There was a report in the papers this morning about a horrific beating in one of the poorest migrant areas north of Paris. The article – Roma teen attacked: the images that will shock France was really a repeat of a story in the UK Telegraph. I don’t want to go into the details because I don’t know them. But what is apparent in modern day Europe is the increasing breakdown of social stability and an emerging law of the jungle driven by unemployment, poverty and the inevitable social exclusion. I do not accept that migrants have to poor just because they start with nothing and cannot speak the local language with proficiency if at all. What is clear is that austerity is undermining the social fabric of Europe and this shocking incident is just one of many manifestations of that. And it will get worse.

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The Looters and Moochers are apparently back in Australia

Last week (June 11, 2014), the Australian Treasurer gave a speech at the right-wing Sydney Institute entitled – A Budget For Opportunity. The Treasurer was attempting to spin the impossible – that the May Fiscal Statement was fair (equitable) in that all Australians would be contributing to the deficit reduction. That is patently false. It is clear that the largest burden arising from the fiscal reduction will be borne by those with least income, including those reliant on public income support to scratch out the barest of existences. But in trying to make this impossible case, Hockey also invoked the classic divide and conquer strategy that conservatives use to segment and coopt certain sections of the population into agreeing with policy changes that will not only undermine their own prosperity but devastate the prosperity of other ‘segments’ who they manage to vilify. And while that is going on, the high income earners and wealthy, who are more likely to support the conservative political parties sit back sipping on their gins laughing their smug heads off. What a world it is.

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Not a wages breakout in sight

Australian readers will recall earlier in the year when the Federal Employment Minister Eric Abetz warned the public that there would be a wages breakout unless union power was curbed and they negotiated collective agreements with employers that were in the national interest. The ABC news report (January 14, 2014) – Eric Abetz warns of wages ‘explosion’ unless employers stop ‘caving in’ to unions – said that the Minister berated “weak-kneed employers” who caved into “unreasonable union demands” and then lobbied him to cut union power. The same scaremongering accompanied the decision by Fair Work Australia to lift the minimum wage by xx per cent on June, 2014. This was not only a wages explosion but would cause a catastrophic loss of low-paid jobs according to the right-wing anti-worker cheer squad, including leading figures in the Federal government. The problem is that these ‘beat ups’ are lies.

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Teenage employment decline in Australia reaching catastrophic proportions

Regular readers will know that for some years we have been documenting the parlous state of the youth labour market in Australia. In an environment where fiscal cuts are being justified as looking after the future as the population ages, the most glaring thing that will undermine our future prosperity is the lack of attention policy makers are giving to the youth unemployment problem. The media has only just started to register that our ‘future’ workers are growing into adults having never worked nor gained the requisite experience to deliver high productivity outcomes. The personal future of this cohort is bleak. Recently, the Brotherhood of St. Laurence as (finally) launched a national campaign My Chance, Our Future to “draw attention to the crisis of youth unemployment in Australia”. Better late than never I suppose but what took them so long.

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