MEDIA RELEASE: Unemployment Up – But Employment Increases

The unemployment rate of 6.3% (s adj) has reached a 12-year high, increasing slightly from the previous month.

However, data reveals a modest improvement in the labour market as employment rose by 42,700 (0.4%) in November 2014. Despite this, the growth of 1.5% in demand for labour over the past 12 months is still failing to keep pace with the growth in the working age population of 1.8%.

Youth unemployment has also continued to increase significantly. In November 2013 the unemployment rate for persons aged 15 to 19 years was 16.5%. The latest figures show the rate to have risen considerably to 20.1%. February 1997 was the last time that youth unemployment was greater than what it is today. Such a record high level indicates poor employment prospects for first-time job seekers.

Additionally, the Australian labour market is also faced with the issue of growing underemployment. The labour force underutilisation rate for November 2014 is 15.0%, the highest rate since November 1997. This increase is largely due to the growth in part-time employment in comparison to full-time employment. The latest figures show that while part time employment increased by 40,900 in November whereas full time employment increased by 1,800.

These developments in the labour market emphasise the need for deregulation of workplace relations and the establishment of a much more flexible market.

Publicity Officer: Des Moore (9867 1235)

 

Royal Commission Submission

The HR Nicholls Society Submission to the Royal Commission into Union Corruption is now availiable for download, together with a cover letter by Publicity Officer Des Moore HERE:The Effect of Regulation on Union Governance and Corruption (covering letter by Des Moore) and you may click here for the media release.

Des Moore wishes to note that:

Firstly, the HR Nicholls submission is to an extent limited by the terms of reference which do not refer specifically to the economic effects of existing arrangements. As the Abbott government has indicated that the Productivity Commission will at some stage be asked to undertake a comprehensive economic review, our submission does not attempt to cover all the adverse economic effects of the regulations, such as the minimum wage. That will be for another day. But there are both legal and economic implications in the Commission’s identification of “criminal conduct which includes widespread instances of physical and verbal violence, cartel conduct, secondary boycotts, contempt of court and other institutional orders, and the encouragement of others to commit these contempts”.

 

Second, my covering letter argues that the absence of any specific mention of economic implications in the terms of reference should not stop the Commission referring to them in its report(s). There is in a sense an interconnection between the legal and economic effects. The importance of having regulatory arrangements which stop or markedly reduce secondary boycotts is but one example.

 

Accordingly, it is suggested that the Commission should in fact give more attention than appears so far to be the case to the adverse economic implications of the existing regulatory arrangements. The provision in the terms of reference to “the adequacy and effectiveness of existing systems of regulation” seems relevant and the identification of restrictive practices in the labour market indicates that adverse economic effects occur. Hence it is recommended that the Royal Commission draw attention to the likelihood of such effects in its report.

 

Media Release: Royal Commission Submission Calls for Minimal Regulation

MEDIA RELEASE
3 November 2014
Royal Commission Submission Calls for Minimal Regulation

The HR Nicholls Society submission to the Royal Commission on Trade Union Governance & Corruption calls for existing regulatory arrangements under the Fair Work legislation and the Fair Work Commission (FWC) to be replaced with minimal regulation of employer/employee relations.

The submission, acknowledged by Commissioner Heydon, particularly addresses the reference on ‘the adequacy and effectiveness of existing systems of regulation and law enforcement’ (a)(j)

Analyses in the submission by two prominent lawyers show advantages conferred on trade unions which are unnecessary and unjustified. These include entry to work premises, ability to disrupt work performance, engagement in protected industrial action and forcing parties into regulated bargaining. Read more

ABOUT RAY EVANS

The following is a recent address given by Des Moore, Publicity Officer of the HR Nicholls Society, to Turk’s Head (one of the organisations created by Ray Evans) on October 8, 2014″:

Although I am a bit concerned about talking to a “prickly” group,  I feel honoured to be invited by Patrick Morgan to offer a few words on our good friend, the late Ray Evans. I welcome the opportunity to do so in the presence of his wife, Jill.

I say only a few words because the importance of Ray’s contribution to our society really warrants a book. Yet despite the enormous number of PhDs being written are any of them offering to do what would be a fascinating one on Ray? Ray himself would doubtless be saying from his grave – that is exactly what you would expect from our universities!

However his death did produce extensive praise from certain quarters on his enormous contribution to the debate on a wide range of public policies spread over about 25 years. It is almost sufficient to simply recall that he played major roles in establishing and developing the HR Nicholls Society, The Samuel Griffith Society, The Lavoisier Society, The Bennelong Society and The Galatians Group. It is quite remarkable that he had the capacity to run these groups with only limited financial and other help.

Importantly, he did however receive help from the courageous decision of Hugh Morgan to take him on board at Western Mining as a speech writer and from Chairman Arvi Parbo for agreeing that he should continue framing the 200 speeches he drafted for Hugh. One of those – titled “Yellow Cake Bob” after the Hawke government banned uranium mining – probably cost Hugh his position on the board of the Reserve Bank. Needless to say it was a serious risk for shareholders and a Chief Executive Officer to  agree in 1982 to employ Ray when he wrote in his job application  “The culture wars I now believe to be embedded deep in Western Civilisation … are fought out in every institution. We see them in the churches, within political parties, in the media, in the universities and in corporations”. Read more

Employment News is All Bad

Using the unadjusted labour force data, the September figures show an unchanged unemployment rate of 6.1%. But this apparent “stability” disguises the deterioration in the labour market.

Not only did employment fall by 30,000 but those not working or seeking to work increased by 45,000. In effect, those who lost their jobs did not even try to get back into the work force.

This is not a one off development. While over the past 12 months employment did increase by 46,000 or 0.4%, those not working or seeking to work increased by 242,000 or no less than 3.7%.

In short, the demand for labour has not kept pace with the growth in the working age population (15 years and over) and retirees and the youngees with no work prospect have increased. This is reflected in the fall to 64.5%  in the participation rate from 65.2% a year ago.

How has Australia got to this parlous situation?

While the end of the mining boom has contributed, the main reason is that Australia has a highly regulated labour market which will not allow temporary downwards adjustments in employees’ conditions in other industries. These conditions deter employers from risking additions to investment and jobs.

Unless early action is taken to remove the Fair Work arrangements, the Abbott government will not only fail by a long way to achieve the employment growth of 1.5% in the 2014-15 budget, but also the election jobs target of one million over 5 years.

Publicity Officer: Des Moore (9867 1235)

Media Release: Unemployed up by 15%, Employment Falls Too

The increase in July unemployment to 6.4% seasonally adjusted rate (from 5.6% in July last year), and the accompanying small fall in employment since last month, highlight the need for reduced regulation of workplace relations in circumstances where the economy is growing below trend.

Unless regulations are reduced the Abbott government’s budget forecast of a 1.5% increase in employment in 2014-15 will not be achieved and productivity growth will remain sluggish.

The regulatory problem is highlighted by the fact that the growth in the working age population (WAP) is twice as fast as the growth in employment over the past 12 months – employment up by only 0.9% while the WAP increased at double that rate (1.8%).

Before the Fair Work legislation employment was growing faster than the WAP and the participation rate was growing. Over the past three years that rate has fallen from 65.4% to 64.8%.

On top of the twelve months increase of about 15% in numbers unemployed, this indicates continued large increases in those who have given up actively looking for work – the so-called drop outs

Labour Force – Increases Since July 2013 (Original Data)

000s               Percent

Employment                                1,041                0.9

Working Age Population              3,421                1.8

Unemployed                                   96                14.9

WAP is civilian population aged 15 years and over

It is now abundantly clear that urgent changes must be made to the existing regulatory legislation, and the administration of it, just to reach the “sensible centre” and remove the bias evident in the existing arrangements.

Sufficient evidence of the monopoly position of unions has already been given to the Heydon Royal Commission to warrant immediate reforms and allow employers much greater freedom to determine employment conditions. It is anomalous, for example, that the MUA has to be taken to the Federal Court in an attempt to reduce its monopoly powers.

The proposals to reform the ABBC and other minor reforms are welcome but have yet to be implemented and will not themselves change the behaviour of militant unions.

Publicity Officer: Des Moore (9867 1235)

 

Employment Grows –But Faster Growth in Drop Outs

The June ABS Labour Force figures show  employment continuing to grow but at a much slower rate than the growth in the working age population (WAP) – over the past 12 months employment rose by only 0.9% while the WAP increased at double that rate (1.8%).

This indicates further large increases in those who have given up actively looking for work. And these partly reflect the adverse effects of the regulatory system.

Labour Force – Increases Since June 2013

000s             Percent

Employment                                           1,042                0.9

Working Age Population                        3,774                1.8

Unemployed                                            51                    7.5

Although the unemployment rate is up only 0.1 percentage point to 6.0% (S Adj), the labour market is much weaker than this suggests. The failure of the growth in employment to keep up with the working age population increase means continuing high drop outs of the labour force. Before the Fair Work legislation employment was growing faster than the WAP.

Unless there is a major improvement in labour demand the Abbott Government will not achieve the budget forecast employment growth of 1.5% in 2014-15. And Abbott’s pre-election jobs target of a one million increase within five years will fall well short.

The revelations at the Royal Commission show that urgent changes must be made to the existing regulatory legislation, and the administration of it,  to remove the bias evident in the existing arrangements and stop  militant unionism. The proposals to reform the ABBC and other minor reforms are welcome but have yet to be implemented and will not themselves change union behaviour.

Publicity Officer: Des Moore (9867 1235)

 

IR Reform key to easing unemployment

The development of this trend does not mean higher unemployment but a much greater increase in those who have given up actively looking for work (you can’t be counted as unemployed unless you are actively looking).

You say that Kent mainly attributes this  development to an increased desire to retire and that only about 25 per cent are discouraged workers. But the sudden increase in drop outs coincides with the introduction of the greatly increased regulation of workplace relations and the accompanying employment deterrent effects experienced by employers, such as the absurd penalty rates.

The marked slowing in the  growth in employment to only 0.9 per cent over the past 12 months suggests that the budget forecast for 2014-15 of 1.5% growth will be very difficult to achieve unless major changes are made to existing regulations which markedly reduce deterrent effects. Read more

Media Release: Employment Grows –But Faster Growth in Drop Outs

Media Release: Employment Grows –But Faster Growth in Drop Outs

The May ABS Labour Force figures show growth in employment continuing but at a much slower rate than the growth in the working age population (WAP) – over the past 12 months employment rose by only 0.9% while the WAP increased at double that rate (1.8%).

This indicates further large increases in those who have given up actively looking for work.

Labour Force – Increases Since May 2013

000s             Percent

Employment                                 994                0.9

Working Age Population           3,398               1.8

Unemployed                                   43                6.4

Although the unemployment rate is unchanged at 5.8% (S Adj), this does not provide an accurate indication of the weakness of the labour market. A much more important test is whether the growth in employment is keeping up with the working age population increase. Before the Fair Work legislation employment was growing faster than the WAP.

Unless there is a major improvement in labour demand the Abbott Government will not achieve the budget forecast employment growth of 1.5% in 2014-15. And Abbott’s pre-election jobs target of a one million increase within five years will fall well short. Read more

Employment Growth and IR

I have previously suggested that one way of drawing attention to the need for reform of workplace relations would be to draw attention to the trend in employment growth and compare that with Abbott’s promise to create one million jobs over the next five years. Abbott’s press release made in late November 2012 may be seen here. You may also read an article from the SMH commenting on the jobs “promise” here. 

As to the actual figures, if it is assumed that the starting point for the additional one million jobs is September 2013 the additional million would not have to be achieved until Sept 2018, well after the next election. To achieve that would require an increase in employment of 8.7%, or an annual average of 1.7%.

This is considerably higher than the actual growth rate over the year ended April 2014, which was 0.9%, and well below the 1.8% growth rate in the population aged over 15 years. The following shows what happened to the increase in the over 15years:

Incr from April 2013 to April 2014 (000s)

Population 15 yrs & over     337.0

 

Employment                      106.5

Unemployed                        32.2

Drop Outs                          198.3

Last week’s press reports that the Chairman of the Minerals Council, Michelmore, called for a “root and branch” industrial relations overhaul and  that even the new head of Rio complained about union claims.

Des Moore is a member of the HR Nicholls Society Board of Management.