The chance of an unemployed Australia getting employment now is nearly at highest level since the early 1990s

I was going to comment on the Spring Statement delivered by the British Chancellor yesterday, but Spring is meant to be a happy, sunny time and the Statement missed the mark on that score. I also need to do some more calculations before I really know the full depth of despair that the British government is delivering on its people. So next week. Maybe. But in the spirit of calculation, I wanted to check how easy it is to get a job in Australia at present after hearing some character on the radio yesterday say that it has never been easier. I thought with unemployment getting lower as the external border has been largely shut for 2 years, there might be some credibility in that claim. But one has to check these things and I was interested in whether the border closures have materially altered the transitions between the labour force states. So I updated my databases and went to it. There was some jazz playing in the background to ease the strain! Result: the claim is partially true.

Read more

Single-payer health care should be funded by the federal government

Here is my Wednesday news blog post which ends as usual with some music – today some consummate guitar playing. Today, I discuss the dispute about M4A in the US and clear up some misconceptions. Many think that Medicare for All is defunct in the US because the ruling party – the Democrats have essentially rejected the lobbying attempts. Some people who have associated themselves with Modern Monetary Theory have, it seems, been advocating a state-based campaign to get single-payer schemes installed at that level. Is this a violation of MMT principles? Some think so. I do not. It might reflect ignorance of the nature of the sector but it doesn’t amount to a rejection of MMT. Anyway, I am a federalist and I explain why. I also bring attention to some anti-colonial struggles in the Caribbean.

Read more

Advanced countries should invest in fair trade ventures (without ownership claims)

According to the International Coffee Organization (ICO), the price of coffee has risen for 17 consecutive months and the sector is being hit with sequential shocks, the latest being the Ukrainian conflict, which is having impacts on both the demand and supply sides. I was talking with a friend over the weekend just gone and they were complaining that a cup of coffee had risen to $A7 or thereabouts, which was really squeezing people’s incomes. As a disclaimer, I have never had a cup of coffee in my life – just the aroma is enough to turn my stomach. But I was thinking about coffee over the last few weeks for another reason. I am currently doing some research on Timor Leste in anticipation of a change in the Presidency. The first round of the elections were held last weekend and it looks like Ramos-Horta will win the second round run-off in April. One of the things I am working on is a plan to diversify the nation’s exports as the inevitable decline in oil revenue starts to impact. I am also in developing models of fair trade that allow for sustainable agriculture (that is, not cash crop mania that wrecks subsistence farming and ends in farmers being locked up in international debt) but also allow the nation to diversify their export portfolio. Fairness and sustainability are good ideals to have. There is an opportunity here for a nation such as Australia to reform its ways and break out of the dog-eat-dog ‘free trade’ mantra and actually start doing some good in our region. That is what this blog post is about.

Read more

Cash machine capitalism – it is getting uglier by the day

The current period is really exposing what is wrong with the world order based on Capitalism. Those in the know have always understood that the system is not designed to advance human prosperity generally. At times in history, it has required the general improvement in material living standards to accomplish its aims – which are different from that improvement. So, it has tolerated a more equitable distribution of income and access to consumption purchasing power. But while the masses became complacement as they polished their big (oversized) SUVs, which sit in their driveways next to their big (oversized) motor boat and out the front of their big (oversized) house that is ill-designed for a carbon-neutral future, the bosses have been beavering away working out how to continue to meet their aims independent of us.

Read more

The Weekend Quiz – March 19-20, 2022 – answers and discussion

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.

Read more

Australian labour market rebounds from Omicron (perhaps) – but it is not as good as the media is claiming

The Australian Bureau of Statistics released the latest labour force data today (March 17, 2022) – Labour Force, Australia – for February 2022. Last month the labour market took a dive as workers became increasingly sick from Omicron and the relaxation of the lockdowns and restrictions. This month a rebound. Next month? Floods and a new variant – stay tuned. Employment growth was very strong this month but it won’t last. Unemployment is down to the pre-GFC levels which is good as employers continue to face a restricted labour supply. When they get around to offering higher wages given their booming profits is another question. Participation is at peak levels which is good and underemployment is falling. All these are signs of an improving situation for workers but only within this weird bubble we are in – not much external migration yet and a Covid roller coaster of sickness, new variants, not to mention the floods. The flat population growth as external borders remain largely closed (or there is a slow take-up of international travel opportunities from foreign tourists) has helped keep the unemployment rate low. But it is a temporary reprieve I think. My ‘What-if’ unemployment rate of 6.4 per cent is closer to the mark of where we are at present once things normalise (whatever that means).

Read more

UK unemployment rate is more like 5.6 per cent rather than 3.9 per cent

I have very little time today but there was one question I get asked on a regular basis that I thought I would this space to quickly answer. People wonder who the participation rate affects the official measure of unemployment. For example, the UK Office of National Statistics released data yesterday (March 15, 2022) – Labour market overview, UK: March 2022 – which showed the official unemployment rate had fallen to 3.9 per cent – a decline of 0.2 points. They said this was the result of employment rising by 275,000 in February (the employment to population ratio rose by 0.1 points). They also said that the inactivity rate for those between 16 and 64) had risen by 0.1 points to 21.3 points and was 1.1 points above the pre-pandemic level. So the question I get asked is whether things are really getting better? So here is how it works.

Read more

Inflation is not exploding out of control and interest rate rises will not help

It is hard work being an economist. Especially when about 90 per cent of what one reads each day is fiction masquerading as truth. That wouldn’t be so bad because fiction is good when it is in the right place. But in this context, the fiction that comes out from economists and their lackeys in the financial media causes massive damage to innocent citizens who lose their jobs, have their pay aspirations stifled, enter poverty, lose their homes and commit suicide out of sheer hopelessness with the situations that are forced upon them. When you dig into some of the media coverage you realise that it is really just a self-serving promotion for speculators in financial and share markets and has very little foundation in a deeper understanding of economics. This so-called Op Ed piece in The Age (March 14, 2022) – No-win situation: The Fed is paying the price for dragging its feet – is representative of the nonsense that parades as economic commentary. It reflects a sad state of affairs.

Read more

We are not going back to the 1970s

With Russia now invading Ukraine and adding to the already highly disrupted supply chains linking products and nations, and the price fixers in OPEC and OPEC+ having a picnic on the uncertainty, inflationary pressures will continue to rise for the time being. Many commentators keep falling into the trap of saying that history is repeating itself – meaning that it is the 1970s over again. I maintain my position that this is not akin to what was going on in the 1970s although there are similarities – energy price rises accompanying war, etc. And if we make the same mistakes that were made in the 1970s now, then not only will the inflation persist but millions of workers will lose their jobs and their incomes.

Read more
Back To Top