Posts in this category analyse trends in labour costs published by various statistical agencies

When labour shortages just signal management caprice – case study

I have been researching the so-called labour shortage that business types are talking about relentlessly as part of their on-going strategy to undermine the conditions of work and make more profit. In the course of that enquiry, I came across an interesting juxtaposition between two US companies that illustrate a lot of what we have known about for years but have allowed this relentless, neoliberal, race-to-the-bottom to obscure. Well-paid workers with job security, work better and are happy workers. Companies that pursue the ‘race-to-the-bottom’ strategy and seek to build profits by trashing the conditions they offer workers eventually struggle to prosper because their bad reputation undermines their ability to attract productive workers. In the case we discuss today, the so-called ‘labour shortage’ is really just a signal of management caprice. Rather than being a shortage of workers, there is a shortage of workers who will tolerate the indignity of low wages, onerous conditions and capricious management. It is also a union versus non-union type of discussion where the unionised work places generate high productivity and worker attachment, while the non-unionised workplaces find it hard to attract reliable staff and blame it all on ‘labour shortages’.

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Job vacancies rising in Britain in mostly below-average pay sectors

Part of my working day is spent updating databases and studying the additional observations. I learn a lot that way about trends and how far off the mark my expectations of a particular phenomenon might be. Today I updated various labour market datasets from Britain and did some digging into the relationship between vacancies and pay. It is clear that as the British economy opens up again, that unfilled job vacancies have grown very strongly over the Northern summer. While that is a good thing because it means there are opportunities for workers to gain employment, shift employment to better paying jobs etc, the message is no unambiguous. If the vacancy growth is biased towards low-pay work then the chances for upward mobility might be stifled. Such a trend might also reflect the fact that employers are now finding that their old practices of accessing vast pools of EU labour willing to work at low wages are being constrained and that will signal the need for a change in strategy, including restructuring, capital investment and better paid jobs. It is too early to discern which way that will go. But what I found while looking at this new data is that while job vacancies are booming, the majority of them are in below-average pay sectors. More analysis is needed to fully assess the implications. Here is where I started on this path …

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NSW fails to control Covid (incompetence) and the labour market contracts sharply across the nation

There were two significant data releases from the Australian Bureau of Statistics this week that provide information about the state of the labour market – both in the short-term and also in terms of longer-term trends. The first release (September 8, 2021) – Labour Account Australia – June 2021 – is a quarterly dataset that allows us to tie together information about employment, persons, hours and payments. The second release today (September 9, 2021) is the – Weekly Payroll Jobs and Wages in Australia – Week ending August 14, 2021 – which is Australian Tax Office data that provides a much more current view of how the labour market is performing. That snapshot is especially valuable given the on-going tight lockdowns in Sydney and Melbourne and the impact they are having on employment and wages.

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Brexit is delivering better pay for British workers (on average)

I find it amusing when some self-styled ‘progressive’ commentator, usually writing in the UK Guardian newspaper, bemoans Brexit and points to claims by business that there is a shortage of workers. The ‘shortage’, of course, is results from not being able to access unlimited supplies of cheap foreign workers as easily as before. When I see a shortage of workers, I celebrate, because it means employers will have to break out of their keep wages growth low mentality to attract labour; that they will have to offer adequate skills training to ensure the workers can do the work required; and, that unemployment will be driven as low as can be. What is not good about that? Brexit has done a lot of things, one of them being to provide the British working class to arrest the degradation in their labour market conditions that neoliberalism has wrought in a context of plenty of low wage labour always being in surplus. A similar thing will come from the pandemic in Australia where our external border has been shut for nearly 18 months now.

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Australia – parlous wages growth signals loss of worker purchasing power

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.

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Staggered minimum wage increases in Australia further punish the most vulnerable workers

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.

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The working poor are still poor in Australia

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 …

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New Australian inflation measures help us dig deeper into distributional consequences

On November 11, 2020, the Australian Bureau of Statistics published a very interesting new experimental dataset – Non-Discretionary and Discretionary Inflation – which was derived from the standard Consumer Price Index data. It provided us with new insights and a richer knowledge of the impacts of inflation, particularly in distributional terms. Last month (May 25, 2021), the ABS published a followup article – Measuring Non-discretionary and Discretionary Inflation – which summarised some of the key findings. After receiving feedback, the ABS has refined the data series and will publish them on an on-going basis from the September-quarter 2021 as part of the “regular quarterly CPI release”. This new approach to measuring inflation will help us considerably assess the implication of wage movements on the real living standards of Australian workers.

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Culture of austerity distorts business decision-making and we all lose

It is Wednesday and so a few snippets and some Afrobeat. Today, I briefly discuss a rather extraordinary claim by the Governor of the Reserve Bank of Australia that Australian employers refuse to pay higher wages in an environment where the federal government is biases aggregate policy towards surplus creation, even though that strategy was temporarily disabled during the first year of the pandemic. The overall austerity environment has distorted business decision-making to such an extent that firms are now obsessed with cost control and have forgotten that spending equals income and by encouraging a high wage, high productivity culture, their profits rise as well. Win-Win. At present it is lose-lose.

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Rising prices equal an inflation outbreak (apparently) but then the prices start falling again

In my daily data life, I check out movements in commodity prices just to see what is going on. As I wrote recently in my UK Guardian article (June 7, 2021) – Price rises should be short-lived – so let’s not resurrect inflation as a bogeyman – the inflation hysteria has really set in. I provided more detail in this blog post – Price rises should be short-lived – so let’s not resurrect inflation as a bogeyman (June 9, 2021). Yes, I stole the title of my article for the blog post if you are confused. The inflation hysteria really reflects the fact that mainstream economists are ‘lost at sea’ at present given the dissonance between the real world data and the errant predictions from their economic framework. They cannot really understand what is happening so when they see a graph rising it must be inflation and that soothes them because rising deficits and central bank bond purchases have to be inflationary according to their perverted theoretical logic. The financial market press then just repeats the nonsense with very little scrutiny. But given many graphs are falling again, this Pavlovian-type response behaviour must be really doing their heads in. I have no sympathy.

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