Last week’s (August 2, 2019) release by the US Bureau of Labor Statistics (BLS) of their latest labour market data – Employment Situation Summary – August 2019 – reveals a labour market performance that is below the performance achieved in 2018 although there has been considerable month-to-month volatility. The US labour market is still adding jobs, albeit at a slower pace than last year. The Broad labour underutilisation ratio (U-6) remains high even though the official unemployment is plumbing new (recent) lows. And there has been a significant hollowing out of jobs in the median wage area (the so-called ‘middle-class’ jobs), which is reinforcing the polarisation in the income distribution and rising inequality.
I keep reading ridiculous articles about Brexit in the UK Guardian. The latest was comparing it to pre-WWI Britain and suggesting there were no signs of a “Damascene moment remainers hoped for”. I thought that reference was apposite – given the reference invokes St Paul’s conversion after he was struck blind. Good analogy – blind and remainer. The Brexit imbroglio is all the more puzzling because it seems to be a massive mismatch of scale – a currency-issuing nation and an organisation with no currency and no democratic legitimacy. And that is before one even contemplates the nature of that organisation. On August 20. 2019, the European Union provided us with a perfect example of why no responsible government would want to be part of it. In its – Daily News 20/08/2019 – there were three items. The last item told us that construction output in the EU28 had declined by 0.3 per cent in June 2019. The first item was a sort of cock-a-hoop boast about how great Greece is after the EU saved it from disaster. Parallel universe sort of stuff. Britain will thank its lucky stars after October 31, 2019 when it goes free from that madness. Even though the remainers remain ‘blind’ without their Damascene moment”
The Australian Bureau of Statistics released the latest data today – Labour Force, Australia, July 2019 – which reveals a labour market with where employment growth is not strong enough to absorb the increasing labour force as participation continues to creep up. As a result, unemployment rose again, albeit modestly. The disturbing trend in this rather weak environment is that underemployment rose by 0.2 points) to 8.4 per cent further and the total labour underutilisation rate (unemployment plus underemployment) rose as a consequence to 13.6 per cent. Both the unemployment and underemployment rates are persisting around these elevated levels of wastage making a mockery of claims by commentators that Australia is close to full employment. The unemployment rate is 7 percentage points above what even the central bank considers to the level where inflationary pressures might be sourced from the labour market. This persistence in labour wastage indicates that the policy settings are to tight (biased to austerity) and deliberately reducing growth and income generation. My overall assessment is the current situation can best be characterised as remaining in a fairly weak state.
I was coming through the streets of inner Melbourne the other night after playing in my band. I couldn’t believe how many little scooters with those big boxes on the back were buzzing around, in and out of traffic, turning here and there, presumably, delivering food to people who preferred to stay in from the cold weather. I had sort of noticed these ad hoc cavalcades of cheap scooters before but never really assessed the extent of the proliferation. It represents an amazing and highly disturbing trend in our labour market. Okay, that sounds like something someone from another (older) generation might say. He who grew up when there was secure employment and wages and conditions were more tightly regulated. And I have seen Tweets from young people telling us ‘oldies’ to step aside. But what the scooter riders don’t realise is that they will get old themselves one day. And secure, well-paid work coupled with a broad spectrum of high quality public services is what makes that transformation liveable. In mapping out what I think are the essential aspects of a social transformation that we might call a Green New Deal, eliminating precarious work is one of the priorities – it is intrinsic to creating a more equitable society in harmony with nature. This aspect also calls in question the role of a Job Guarantee. Note the capitals – there is only one Job Guarantee but many jobs guarantees. I will explain today why the Job Guarantee will be an intrinsic part of the Green New Deal but by far a minor player in terms of the job opportunities that will be created by the socio-economic shift. Many commentators seem to think the Job Guarantee is sufficient for a Green New Deal. It is not and we need to understand its role in a monetary system to understand why.
Last week’s (August 2, 2019) release by the US Bureau of Labor Statistics (BLS) of their latest labour market data – Employment Situation Summary – July 2019 – reveals a steady labour market with month-to-month volatility. The US labour market is still adding jobs, albeit at a slower pace than last year. The unemployment rate remains low (at 3.71 per cent) and the participation rate has moved up a tick, which is a good sign. It is also clear that there is still a substantial jobs deficit remaining and considerable scope for increased participation. Significantly, the bias toward jobs in below-average pay sectors being produced in the recovery has intensified during 2019.
At present, the Australian Parliament is debating whether the unemployment benefit (called Newstart) should be increased. The conservative government is refusing to budge claiming it prefers to create jobs and get people of benefits – arguing that it will generate 1.25 million jobs over the next 5 years. The Opposition Labor Party are attacking them for being mean but are just rehearsing the massive hypocrisy that has defined that party since it became a voice for the ‘neoliberal lite’ path. Every time the Labor Party spokespersons criticise the Government for not bringing unemployment benefits above the poverty line, Australians should remember that when they were in office the Labor Ministers ran the same line – they wanted to move people into jobs and would not compromise their obsessive pursuit of a fiscal surplus. Same logic. Disgusting and dishonest then. As it is now. The fact is that the successive governments have forced the unemployed to remain jobless (through austerity policies) and then increasingly plunge into deeper poverty (by refusing to increase the income support level in line with movements in poverty lines). In this blog post, I show that even if the 1.25 million pledge is achieved (and there are reasons why they might struggle to achieve it), there would be thousands of workers remaining in a jobless state by June 2024. This denies the Government’s claim that the pledge will eliminate the need to increase the unemployment benefit. Given that the current policy mix is likely to force thousands to remain in elevated levels of unemployment, the unemployment benefit should be increased, immediately, by more than $A200 per week, in the first instance, for a single adult. And then the government should introduce a Job Guarantee to allow workers to transit from joblessness to work at a decent, socially inclusive minimum wage (well above the revised unemployment benefit level). That would be the responsible thing for government to do in this regard. I am not holding my breath.
The Australian Bureau of Statistics released the latest data today – Labour Force, Australia, June 2019 – which reveals a stagnating labour market with only 500 net jobs created in the month. The only bright spot was that there were 21,100 full-time jobs created (net). But total employment lagged behind the growth in the working age population, which meant that unemployment rose by 6,600 to 711,500 persons with participation unchanged. Working hours fell for the third consecutive month. Underemployment fell slightly (0.4 points) to 8.2 per cent further, largely reflecting the shift away from part-time work in a weak overall situation. The total labour underutilisation rate (unemployment plus underemployment) fell as a consequence to 13.4 per cent but its persistence around these elevated levels of wastage makes a mockery of claims by commentators that Australia is close to full employment. My overall assessment is the current situation can best be characterised as remaining in a fairly weak state. Most of the dynamics over the last few months have been due to swings up and down in part-time employment.
Last week’s (July 5, 2019) release by the US Bureau of Labor Statistics (BLS) of their latest labour market data – Employment Situation Summary – June 2019 – reveals a steady labour market with month-to-month volatility. The US labour market is still adding jobs, albeit at a slower pace than last year. The unemployment rate remains low (at 3.67 per cent) and the participation rate has moved up a tick, which is a good sign. It is also clear that there is still a substantial jobs deficit remaining and considerable scope for increased participation.
The Australian Bureau of Statistics released the latest data today – Labour Force, Australia, May 2019 – which reveals a slightly improved labour market although full-time employment growth was weak and total hours worked declined. Underemployment rose slightly (0.1 points) to 8.6 per cent further accentuating the fairly weak overall situation. The total labour underutilisation rate (unemployment plus underemployment) remained steady at 13.7 per cent and the persistence of that level of wastage makes a mockery of claims by commentators that Australia is close to full employment. The other disturbing outcome was that full-time and total teenage employment also fell. My overall assessment is the current situation can best be characterised as remaining in a fairly weak state. Most of the dynamics over the last few months have been due to swings up and down in part-time employment.
Some years ago, I was a panel speaker at an event in Sydney covering the topic of wage developments. I shared the podium with a young woman who was something like NSW Youth of the Year. It was at a time that employer groups were lobbying the conservative government to abandon penalty rates for workers in low-wage industries (hospitality, tourism, etc) and strip powers from trade unions. I spoke about how that agenda was designed to advance their class interests and fitted squarely with the neoliberal intent to redistribute real income away from workers towards profits. The young woman followed and announced that class was dead and that there was no such thing as a worker anymore – she said “we are all entrepreneurs now!”. Prior to that, as our national government was privatising our public companies such as Qantas and Telstra, our prime minister announced “we are all capitalists now” referring to the idiocy of people buying shares in the companies that we collectively ‘owned’ anyway while they were in public hands. The more recent manifestation of this delusion that class is dead and we are all entrepreneurs is the so-called ‘gig economy’. It seems that we now have millions of people (first young but increasingly older) who think that entrepreneurship is about buying a cheap scooter and tearing around streets delivering pizzas in all weather to earn a few dollars while the companies that ’employ’ them (or rather contract them) walk away with millions. These workers, sorry, entrepreneurs, face a bleak future. When there are no pizzas being ordered they have no shifts. When they are sick they have no pay. When they go on holidays they have no pay. And when they get old they will have no superannuation. Sounds like a plan to make someone rich.