Author: Andrew Norton

Literary dating

~ Andrew Norton ~ 9 Comments

In possibly the first ever book made of up of reprinted classified advertising, the London Review of Books is publishing a collection of its personals ads. Personals have long been a feature of The New York Review of Books, and over the last few months Australian Book Review has been trying to imitate the northern book magazines.

I can see why The New York Review of Books had such success with its personals classifieds. If books are your main interest in life, meeting possible partners can be hard. Not only is reading an inherently solitary activity, even reading the same book separately can be rare. Serious readers tend to take the bestseller lists as a guide to what not to read, on the grounds that what’s appealing to the masses can’t be much good. But this attitude sacrifices their opportunity to at least have something to talk about when they do meet other readers.

Personals columns in literary publications are an attempt to get around these problems. A friend of mine once considered putting an ad in The New York Review of Books even though he knew it sold few copies in Australia, because he thought it might help him find a girl with the right book collection. A NYRB ad would reach a small but well-targeted audience.

But as the examples from the London Review of Books James Button quotes in The Age this morning suggest, it’s not clear that its advertisers are always serious:

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Should politicians discuss Islam?

~ Andrew Norton ~ 5 Comments

It comes as no surprise that Malcolm Fraser is again criticising the Howard government. He wrote in The Age yesterday:

Today, for a variety of reasons, but not least because the Government has sought to set Muslims aside, discrimination and defamation against Muslims has been rising dramatically. Too many have taken the easy path and accepted the Government’s contentions that Muslims aren’t like us and therefore it doesn’t matter if discrimination occurs and if access to the law does not apply. We have forgotten that discrimination once it starts, spreads.

Fraser is so busy reading between the lines of what the PM says that he has forgotten to read what is actually on them. If you go to Howard’s website and do a search you can find his statements on the Sheik Hilali affair (and indeed on previous Sheik Hilali affairs), along with his statements on Islam in Australia. Howard’s views can be summarised as follows:

* it is important for Islamic Australians to be integrated into Australian society
* that integration is threatened by a minority of members of the Islamic community with repugnant beliefs and unacceptable behaviour (on the treatment of women, on terrorism)
* he stresses that these are minority views, but they colour general perceptions
* Australians should be tolerant of other religions (eg on women’s head covering, opposing violence, not the government’s job to decide who should head religious groups)
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John Howard, conservative social democrat #2

~ Andrew Norton ~ 26 Comments

Last month I suggested that John Howard was a conservative social democrat, redistributing income as a conventional social democrat would, but giving it a conservative twist by targeting families.

An interesting presentation by Ann Harding of NATSEM at today’s Melbourne Institute/The Australian conference spells out the distributional consequences of all the extra spending.

For a single and childless person earning between $1,000 and $1,250 a week, changes in the tax and welfare systems since 1996-97 leave them 4% better off in real terms. But a couple with one earner and two children on the same income is 15% better off from tax and welfare changes, and a couple of two earners and two children is 19% better off.

These figures ignore changes in private income – they are the effects of changes in government policy alone. If increases in private earnings are included, a single adult is 15% better off and and a couple with children is 29% better off. This suggests that the market alone has not changed household relativities much, but government policy has had a big effect.

Harding also finds that when we look at equivalised household income (ie, allowing for the number of people in the household) over the last decade households in the top 20% of the income distribution have had % increases in their income that are slightly below the average, though still a good improvement – 24%. The biggest winners have been those in the middle two income deciles on 32% and 29%. Decile 2 did the worst, on 14%. Harding says this group contains a lot of old-age pensioners without private resources, so they have not directly benefited from the rise in market income or the added concessions for ‘self-funded’ retirees.

Overall, though, it supports my argument that while Howard only occasionally talks like a social democrat, he has consistently behaved like one.

Why are men more likely to be sacked than women?

~ Andrew Norton ~ 10 Comments

Last week’s labour mobility data showed that men are more likely to be sacked than women. Admittedly, with overall retrenchment rates so low, it is not a huge difference in absolute terms – 2.4% compared to 1.9%. But relatively, men are noticeably more vulnerable. I haven’t gone back to calculate the differences over all the years of the job mobility survey, but the same pattern was there in the first survey in 1972 (3%/2.1%) and in 1984 (4.9%/4%).

The Melbourne Institute report on the HILDA survey saw this result in their data too and tried to work out why. After controlling for various factors including educational attainment, industry, and being casual or part-time they found that, while the gap narrowed, being female still conferred an employment security advantage. Women’s greater job security was also reflected in their subjective perceptions of how safe their jobs were. So women’s rising employment share over time could go some small way to explaining the good results on job security that we currently see.

But it still doesn’t explain why women are less likely to be fired than men. The Melbourne Institute report speculates that perhaps women are less likely to cause trouble at work than men. My experience is generally the opposite – they seem more likely to fight among themselves – but since my uni days I’ve only had office jobs, and perhaps the social skills (or lack thereof) of blue collar males land them in trouble.

Another suggestion in the Melbourne Institute report is that employers, who tend to be male, feel less comfortable sacking women than men. Perhaps there is some residual code of the gentleman at play. Or perhaps they fear the waterworks that may follow the giving of notice.

Their third suggestion, and the one I found most convincing, is that because more men than woman are in the labour force there is a selection effect, so that males of limited competence are more likely to be in the workforce than similarly competence-deprived women. With a larger pool of men than women likely to be sacked for stuffing up, it follows that more of them will in fact be shown the door.

These are not mutually exclusive possibilities. I will be interested to hear if readers (including lurkers) have any other ideas.

Doubtful calculations of doubtful debt

~ Andrew Norton ~ 10 Comments

The Department of Education’s annual report is out today, and with it more information on student loan doubtful debt. For 2005-06, they estimate that 19.3% of the debt is doubtful, down from the 20.6% estimate for 2004-05. It may not sound like a big change, but it is equivalent to more than $170 million.

I wish they would tell us more about how these figures are calculated. Since they started calculating the doubtful debt figure it has ranged from a low of 13.5% in 1996-97 to a high of 28.3% in 2003-04. All this suggests that there are going through some fairly major changes in actuarial assumptions, especially as the downward trend in estimates has occurred at the same time as the income threshold for making any repayment increased by more than $10,000, effectively excusing some lower-income people from their debt. My best guess for the cause is higher labour force participation rates, especially for women. But the variability suggests that all the estimates should be viewed sceptically.

Of course, if they took my advice and made more effort to collect from people living overseas and from deceased estates the financial position of the loans scheme would improve still further.

Debunking a higher education myth debunking

~ Andrew Norton ~ 13 Comments

There were two higher education research papers reported today. Most publicity went to Bob Birrell and Virginia Rapson’s Clearing the Myths Away: Higher Education’s Place in Meeting Workforce Demands, which Birrell summarises here. According to Birrell, attacking the ‘myth’ that too much attention has been placed on higher education and too little on trades:

Between 1996-97 and 2005-06, overall employment increased by 20 per cent but the number of professionals, associate professionals and managers grew at nearly double this rate. By 2005-06, 38 per cent of all employed were in one of these three occupational groups.

To meet this demand, however, there has only been a marginal increase in university commencements by domestic students over the past decade. The Federal Government has maintained an effective cap on the number of university places for domestic students since it came to office.

Certainly, employment growth in the occupations traditionally targeted by graduates has been strong. But what Birrell and Rapson never mention is the actual number of people completing university qualifications. In virtually every year, these numbers exceed, usually by a large margin, net job creation in the relevant occupations. Sure, there are more vacancies than the annual increase figure would indicate due to retirements, women going on maternity leave, people moving overseas, etc. But not enough to stop us having a large ‘reserve’ graduate workforce, of about 400,000 people with degrees working in occupations that are highly unlikely to require them such as clerical and sales (you can work it out from this ABS report).

What we have in Australia is not a general shortage of graduates, but shortages in particular fields. This in turn is a failing of the quota system – a topic that I am sure anyone who has read me regularly is by now thoroughly bored with. Though in recent years, as Birrell and Rapson acknowledge, the government has been busy creating new university places in areas of workforce shortage, there is at least a 3 year lead time, and in some disciplines (like medicine) much more, before these students enter the professional workforce. The policy failing of the second half of the 1990s wasn’t too few university students overall, it was not letting the system adjust to meet the demands placed on it.

Birrell and Rapson also say that ‘many’ potential students with modest academic records ‘are likely to have been discouraged from attending university by the HECS debt they will accumulate…’. This paper by Chris Ryan and Buly Cardak, reported on here today, certainly shows that there is a strong relationship between ENTER score and university participation. But it’s very hard to show that the prospect of a HECS debt has negative consequences. Many people, for instance, claim that low SES students are more debt averse than students from more affluent families. But this paper shows that for a given ENTER score low SES and high SES school leavers have nearly identical rates of university participation. Though potential students with modest academic records cannot be expected to know statistics on university progress or employment outcomes, perhaps they intuitively understand that they are likely to not do as well at their university studies as their peers with stronger academic records, and risk ending up in jobs that are little better than those they could get straight out of school?

Is Kevin Rudd trying to wedge the Liberals?

~ Andrew Norton ~ 13 Comments

It is no secret that the modern Liberal Party is – insofar as it can be characterised in ideological terms (always an important caveat, since few people’s views map neatly onto the organising ‘isms’ used by intellectuals) – an alliance of liberalism and conservativism. Interestingly, this is often an alliance within individuals as well as between individuals. There are social conservatives who hold essentially liberal (ie, pro-market) views on economic matters. There are social liberals who hold essentially conservative views on economic matters (ie, in favour of the old protectionist system). The Prime Minister has often discussed the liberal-conservative alliance, such as in this April 2006 speech:

The Liberal Party of Australia is the custodian of two traditions in Australian politics. It is the custodian of the classic liberal tradition, but it is also the custodian of the conservative tradition in Australian politics. You have frequently heard me use the expression the broad church. We are a broad church. We do have within our ranks people who would describe themselves as small-l liberals and we have people who would describe themselves as being more conservative. I am a small-l liberal on some issues, I am a conservative on others. I have frequently described myself unapologetically as being a social conservative and an economic liberal. Some would describe themselves as both socially conservative and economically conservative, although I think the second rung of that is a more dwindling group, but nonetheless some would regard themselves as both social and economic liberals.

In an article that is to be published in the November issue of The Monthly, but which was extracted in The Australian yesterday, Rudd trys to drive a wedge through this alliance. As Don Arthur has started to point out there is some innacurate characterisation of what ‘neoliberals’ believe, but this can be ignored as not essential to Rudd’s argument. The core of it is here:

There are no more corrosive agents at work today, on the so-called conservative institutions of family, community, church and country than the unforgiving forces of neo-liberalism, materialism and consumerism, which lay waste to anything in their way. This deep split within the Right provides new opportunities for the Labor Party to argue for a comprehensive set of values that intelligently harnesses the importance of the market and the importance of the family, community and society that markets ultimately serve.

Nowhere amid the triumphalism of Howard’s recent address on the 50th anniversary of the establishment of Quadrant was there any attempt at a philosophical framework for the reconciliation of the Right’s competing neo-liberal and conservative tendencies. That battle, it seems, has already been fought and the neo-liberals have won.

Rudd is asserting here that there is fundamental contradiction in the Liberal Party, and it is the conservatives who are being dudded in this alliance – with of course the implicit (and perhaps explicit, in the full article) argument that the conservative working and lower-middle class voters who have kept Howard in power should switch to Labor, the true conservative party. He is trying to wedge the Liberals.

While Howard did not try to reconcile the competing tendencies in the Quadrant speech (his most absurdly over-analysed comments of recent times; it was a feelgood talk for the magazine’s supporters, not a statement of his governing philosophy) he has done it elsewhere. For example:

Contemporary Australian society understands that we do live in a world of change, they understand that globalism is with us forever, they may not like some aspects of it but they know they can’t change it and they therefore want a government that delivers the benefits of globalisation and not one that foolishly pretends Canute-like it can hold back the tide. They accept and they understand that. But they also want within that change, sometimes that maelstrom of economic change, they want reassurance and they want to protect and defend those institutions that have given them a sense of security and a sense of purpose over the years.

In this, Howard’s basic analysis is similar to that of Hawke and Keating. We need a flexible and dynamic economy to deliver the living standards people want and expect. But alongside the change this produces, we need stabilising influences. Hawke and Keating delivered this through reform gradualism and via the ’social wage’. Howard has been much the same in his broad thrust, though there are many differences of detail. It is why Howard has massively increased spending on families, and why he is raining cash on rural Australia, to replace the water it is not getting. It is why he slowed tariff cuts and spent up big on assistance packages for declining industries to spread out and ease the process of change. It is why he regularly refers to social cohesion, to the point of even making social democratic statements about ‘fair’ wealth distribution. Arguably, his culture wars activities are part of all this too. He saw Keating’s cultural agenda as pushing unwanted and unnecessary changes on a people already suffering reform fatigue over necessary changes.

If anything, the people who should be aggrieved in all this are not conservatives or liberal conservatives, but liberals (’neo’ or otherwise). While Howard has made some modest progress on market reform, he has entrenched high government spending and taken conservative stances on gay equality and euthanasia. But Rudd isn’t trying to create a wedge with liberals, because there are too few to affect elections, and it doesn’t allow focus on industrial relations reform, a key Labor campaign strategy.

There are interesting issues here about whether the Hawke/Keating/Howard/Rudd analysis favouring state action to counteract market dynamism is correct. I think it is greatly exaggerated – but something for another post. But I don’t think there is much ground for Rudd’s wedge strategy. Howard has delivered much to the Liberal Party’s conservative and liberal conservative support base; far too much for us in the ‘neoliberal’ wing of the party.

Why has Sheik Hilali had such a roasting?

~ Andrew Norton ~ 18 Comments

Sheik Hilali’s media roasting provides a fascinating insight into contemporary Australian cultural politics. It’s pretty clear that there is a widespread view that Muslim attitudes on women – and particularly Arab Muslim attitudes – are very unsatisfactory. But it’s hard to say that in public. When someone like Marcus Kapitza decides that he’s tired of the behaviour toward women of young Lebanese men at Cronulla Beach and blames ‘Lebs’ for the problem this will get him labelled a racist. As was said in this blog’s comment this week about his case:

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Australia’s suprisingly secure workers, part 2

~ Andrew Norton ~ 4 Comments

Last month I pointed out that subjective job security, that is how likely people think they are to keep their jobs over the next twelve months, was at its highest level since surveys began (I expanded on this for ABC Radio’s Counterpoint last Monday).

With the release this morning of new labour market mobility data we can see that, on this at least, subjective and objective measure are moving in the same direction. The proportion of workers experiencing involuntary job loss is certainly the lowest since 1988, and quite possibly the lowest since records began, on 6% of people who worked during the year. If we take out those who were in temporary or seasonal jobs or had to quit due to ill health or injury, the retrenchment rate was 2.2%. In the first job mobility survey, back in 1972 before the 1970s economic crisis took hold, it was 2.7%, and it reached 6.4% during 1992.

Though objective and subjective measures of job security are moving in the same direction, there is a big gap between them. For example, if we average the Morgan job security survey results for the relevant years, about 17% of workers thought they had a chance of unemployment, though only 6% actually did lose their jobs. Using HILDA data (pdf, p.82) the Melbourne Institute has calculated that the correlation between a respondent’s own estimate of job loss and actual job loss was just .15. While this was a better predictor than anything else, people significantly over-estimate their chances of losing their job. There are a lot of people worrying about an event that won’t happen to them.

This is not to say that all is well in the labour market. Compared to the early 1970s, more men of working age have avoided being sacked by not holding any job at all during the year. But if you do have a job, the strong economy makes employment more secure than at any recent time.