Labour market now tanking!

Today CofFEE released our latest quarterly labour market indicators (CLMI) which are hours-based measures (see below) that I have developed to more accurately measure the state of the labour market. The data shows that the impact of the global economic crisis is now manifesting in the Australian labour market with a marked deterioration in conditions in the February 2009 quarter. Total labour underutilisation in February has jumped to 11.2 per cent, up from 9.7 per cent in the November 2008 quarter. Things are heading south.

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Budget surpluses are not national saving

This morning I was reading the Sydney Morning Herald and Economics writer Ross Gittins was talking about the fact that the ALP election victory in Queensland over the weekend violates the dogma that Treasury officials (federal and state) like to put around. Of-course, Gittins is in his own words “has great sympathy for treasuries” so I never expect him to tell his readers how the modern monetary system actually operates. But at one point, he advances without any critical scrutiny one of the greatest myths propogated by neo-liberals (including treasuries) about the way federal government budgets work. The myth: budget surpluses increase national saving. The truth is they do not. Its that time again. Time to debrief.

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Size of deficit 101

I rode my bike 80 kms early this morning (usual Sunday) in the beautiful Autumn weather that Newcastle (NSW) enjoys this time of year. The Pacific Ocean looks superb (although there is nothing surfable in sight – maybe tomorrow morning). The sun was out and we were heading for 26-27 degrees. Then it had to happen. When I returned home I opened this morning’s newspaper and came across an authoritative headline: US faces huge deficit blow-out, with the sub-line “Program cuts, tax hikes likely.” The journalist (added to my bogan list) probably got 0 out of 5 on last night’s quiz. Well the truth is that almost everything the journalist wrote is wrong if he is talking about the real world. Anyway, I thought so. Its that time again. Time to debrief.

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ABS staff cutbacks

A document was leaked from the Australian Bureau of Statistics which showed it is planning to sack around 200 staff to pursue efficiency dividends to allow a pay rise to occur. I was interviewed by ABC economics commentator Stephen Long as part of a segment he put together on the national ABC current affairs show PM tonight which examined this issue.

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Public infrastructure 101 – Part 1

I read a headline in the Australian newspaper yesterday (March 19) – Nation building funding crisis as private sector fails to find cash. What? Nation building requires significant budget deficits. When was it dependent on the private sector having to trump up cash? I soon recalled that we have been living in the Public Private Partnership (PPP) era where governments have relinquished their responsibilities to build essential public infrastructure that not only supports a sense of public good but also underpins the prosperity of the private market economy. Its that time again. Time to debrief.

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Bernanke on financial constraints

The US program 60 Minutes interviewed Fed Reserve Chairman Ben Bernanke at the weekend. The interview is largely a litany of mainstream statements but at one point the Chairman gives the game away to the interviewer Scott Pelley. Apart from Bernanke’s very clear statement about how governments actually spend, the interview reveals the confusion that the top banker has with the way the modern monetary economy operates.

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The CofFEE/URP Employment Vulnerability Index – with updates

Today I released a major new research report Red alert suburbs: An employment vulnerability index for Australia’s major urban regions which was the result of a collaboration with Scott Baum (URP, Griffith University) who I share a large ARC Discovery Grant with. The Report and its findings has already received front page coverage in the large Australian dailies – The Age and the Sydney Morning Herald.

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Population policy – cyclical or long-term?

The Australian government announced that as a result of the rising unemployment it would cut the skilled migrant intake by nearly 20,000 to 115,000 this financial year. It also removed some key industries (construction and manufacturing) from the critical skills list which will prevent firms from sourcing tradepersons from abroad unless they can prove local labour is not available. The announcement while seemingly a sensible statement of the jobs equation – less jobs require less workers – once again raises the question of how population policy should be formulated.

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