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 (August 19, 2021), the Australian Bureau of Statistics put out the latest – Labour Force, Australia – for July 2021. The background is that the entire East Coast is in or has been in lockdown over the last few months and for the two largest labour markets (NSW and Victoria) that lockdown has been very tight, although not tight enough in NSW. The July 2021 data reveals that employment growth has come to a stop, although the negative impacts of the lockdowns are mainly showing up as reduced working hours and falling participation rates at present. But the job losses will get worse next month given the extended disaster that is now unfolding in NSW. The impact of the slower population growth is showing up in the continued drop in the unemployment rate, but the major fall in unemployment in July 2021, was due to the decline in the participation rate. So the official unemployed are becoming hidden unemployment, which means there is no improvement in the falling jobless numbers. Further, underemployment rose sharply again (0.4 points) to 8.3 per cent which is consistent with the drop in working hours. The labour market is still 255.7 thousand jobs of where it would have been if employment had continued to grow according to the average growth rate between 2015 and February 2020. This month is the calm before the storm. The extended lockdowns will show up in deteriorating data next month. What is preventing a worse outcome is the fact that the lower population growth due to the external border closures, means that employers are now having to absorb the unemployed more quickly to maintain their operations. There is now definite evidence that further fiscal support is required.
Today (August 18, 2021), the ABS released the latest – Wage Price Index, Australia – for the June-quarter 2021. The WPI data shows that nominal wages growth remains suppressed, and, as a result of the transitory spikes in inflation recently, workers in all sectors experienced sharp drops in their real wages (purchasing power). The behaviour of nominal wages in Australia gives us a clear signal that there is little prospect of sustained inflationary pressures emerging from the labour market any time soon. Wages in the public sector grew by only 1.3 per cent over the 12 months as a result of the ridiculous wage freezes and wage caps that the federal and state governments are imposing. This is not leadership at all.
The article in the Socialist Worker Review (No. 89, July/August 1986, pp. 19-21), by Eammon McCann – The protestant working class – has kept me thinking for some years. I recalled it the other day when I was updating my Northern Ireland labour market data and working on some text. As a result of reading this article many years ago, I became very interested in the labour market dynamics in Northern Ireland, in particular, as they impact on the debate about unification and EU membership (yes, I have always been anti-EU). In that vein, I have been following the trends over time rather closely. More recently, the central place of the North Ireland Protocol in the Brexit discussions has increased the relevance of this research. I also benefitted from some very interesting conversations a few years ago with my host in Galway (forever thankful Niall), while I was visiting the Republic of Ireland on a speaking trip. These conversations filled in many gaps in my understanding of some of nuances of the issues involved. These trends provide some good background to what has been happening in a region that is undergoing significant change and how we might assess the Northern Ireland Protocol in a post-Brexit world. It also helps us understand the demise of the DUP as a relevant political force. They represent a different era. From my understanding, it is also the major economic changes that have been taking place in Northern Ireland that are more likely to influence the trend away from identifying as either unionist or nationalist or proceeding along ‘religious’ lines. A working class impoverished by austerity is a powerful solidifying force. The labour market has changed dramatically over the last several decades. In this multi-part series, I provide some reflections on these issues. This is part of a book project I am working on (more about which later).
In the wake of further Covid angst in Australia, the airlines are once again laying off thousands of workers. One of the airlines, Qantas, formerly the publicly-owned national carrier announced last week major job cuts soon after it secured a rather substantial rescue package from the Federal government. Qantas makes a habit of crying poor despite paying its executives slavishly large salaries and aggressively using its market power to undermine smaller regional airlines that have served Australia for years. Mainstream economists, who were cheer boys for the privatisation in the first place, continue to extol the virtues of selling off the airline at bargain prices to private interests. The reality is however different. The airline provides an overpriced service and can no longer be considered the ‘national carrier’, even though it continues to trade on that reputation. So, today, Scott from Griffith University, who has been one of my regular research colleagues over a long period of time, reexamines the case in the light of recent evidence to bring the airline back into public ownership. Over to Scott …
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.
There are calls for the Reserve Bank of Australia to be forced to undergo a major review of its operations, given that it has failed to achieve its own stated inflation targets for many years now. The RBA is resisting that call. The Australian Labor Party, which is in opposition at present, is trying to politicise the issue by claiming it will review the RBA once it becomes government. The problem is that the call to review the RBA is being made by those who would make the worst aspects of the central bank worse. Further, the legislative structure that defines the RBA and its charter already allows the RBA to pursue employment as a goal with equal priority to inflation. The fact that it hasn’t done that is because it adopted the NAIRU myth and used the unemployed as a tool to discipline inflation rather than a policy target to be maximised. That occurred in the 1980s and beyond as neoliberalism became dominant. The problem is not the legislative structure that the RBA operates within. The problem is that it is part of a broader ideology that has demonised discretionary use of fiscal policy and prioritised interest rate changes, which has reduced our growth rates, undermined employment, suppressed wages and more. The Labor Party has echoed that same ideology and is just being hypocritical now. That ideology is what needs a ‘review’. And urgently.
It is Wednesday and I have been busy on other writing projects. But today I offer some data analysis on the Greek fire tragedy as well as a short video promoting a very important festival that is coming up. Then I offer some personal insights on the accusation by the right-wing press that on-line learning is just a ruse for lazy “work-shy” professors. And to calm us after all that – we have some fine jazz from 1960.
It has been a while since I updated my commentary on the new bi-weekly dataset using Australian Tax Office payroll data that the Australian Bureau of Statistics started publishing in March 2020, in order to provide more updated information on the state of the labour market during the pandemic. The Monthly Labour Force survey comes out in the third week of each month and relates to data collected around the second week of the previous month. With ongoing state government lockdowns being imposed with little warning having a significant impact on employment, this more frequent dataset was welcome. We are now in a situation where around 13 millions Australians are in tight lockdowns (over half the population), principally in Melbourne and Sydney. The latter, due to the incompetence of the conservative state government in NSW, has been in lockdown for weeks now and as the largest state, the reverberations are clearly going to be felt across the nation. Last week (August 5, 2021), the ABS released the – Weekly Payroll Jobs and Wages in Australia, Week ending 17 July 2021 – which provides the first glimpse of what the impact of the extended lockdown in Sydney (in particular) is having on the labour market. Employment in NSW shrunk by 5.1 per cent in the 3 weeks since June 26, 2021 (the start of the restrictions). Overall, employment has slumped by 2.4 per cent nationally. And the virus is spreading into regional NSW and things will get worse. The damage is being borne largely by our youth, given the occupation segregation in the ‘closed down’ sectors. The Federal government is demanding we all get vaccinated but due to its trying to ‘save money’ last year, there is insufficient vaccine available to supply the demand. Both the NSW and Federal governments have demonstrated their incompetence in the decisions they have taken in the name of ‘freedom’ and ‘fiscal surpluses’.