Author: Andrew Norton

Some perestroika in higher education

~ Andrew Norton ~ 17 Comments

On Monday in the AFR I was calling (again) for a more market-driven higher education system. In the Budget tonight the government is taking some very messy first steps in that direction.

Under the current system, each public university (plus a few private institutions) signs a funding agreement (read, ‘agreement’) with the Commonwealth. This sets out the number of Commonwealth-supported student places the university must provide, and in which disciplines. If universities enrol up to 5% more than the target number, they get to keep the student contribution, but get no Commonwealth money. If they enrol more than 5%, for the excess they must pay the student contributions to the Commonwealth. Clearly, this has been a strong disincentive to expand – even if student demand is high. Once all Commonwealth places in a course have been filled, universities are allowed to offer full-fee places up to 35% of domestic enrolments. In a small number of courses, this too has represented an artificial restraint on university expansion.

These restraints are now going to be relaxed. It sounds like the funding agreements will be more genuine negotiations – I infer this from the statement that the Commonwealth will continue to require universities to take Commonwealth-supported places in some fields, such as nursing, teaching and medicine, implying that they will not be forced to accept them in other areas. Universities will now be able to enrol 5% more than their target number and get full Commonwealth (and student, as before) funding for them. Beyond the 5%, they will get the student contribution amount only. This is an incentive to expand, for those universities that want to – a good thing.
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Are workers stranded in pre-backflip AWA jobs?

~ Andrew Norton ~ 8 Comments

The media will, naturally, find the bad news in every WorkChoices story. On the weekend, both the Fairfax broadsheets began their AWA back-flip stories with the losers that fit the narrative on the story – not employers whose bargaining options had been reduced, but the workers who had already signed AWAs. According to the SMH

HUNDREDS of thousands of workers will be left behind by the reintroduction of the “no disadvantage test” by the Federal Government.

And according to The Age

Tens of thousands of workers will be left stranded on work contracts that strip them of penalty rates, overtime and public holiday pay with no compensation, despite Prime Minister John Howard’s move to soften his controversial WorkChoices laws.

But there is more in this than just the journalist’s sense that the negative aspect is the news and that the seemingly weakest party must be in the right. It reflects the powerful legacy of the old IR system on the way people think about the issue, that the law alone protects wages and conditions. Little consideration is given to the way that employees take things into their own hands to improve their lot.
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Why ‘penalty’ rates?

~ Andrew Norton ~ 60 Comments

The government’s back-flip on AWAs, which will prevent ‘unfair’ loss of penalty rates, led to stories in the media about those who think they were hard-done-by under the previous WorkChoices rules, such as this one in The Age about about four schoolgirls who:

have worked for franchised food retailers in shopping malls, and all were signed up to WorkChoices agreements that stripped away penalty rates in return for small hourly pay increases

Politically, it no doubt makes sense to minimise the number of ‘losers’ in a reform. But as a matter of policy, it is far from clear why there should be mandated higher rates for particular hours of the day or days of the week. Google hasn’t been able to find me a history of penalty rates in Australia, but the standard argument for them is summarised in this speech to the NSW Parliament:

Shift loadings and penalty rates for work in ordinary time on weekends and work outside the normal span of hours are intended to compensate for the inconvenience associated with working unsociable hours. Work after 5.30 p.m. is generally regarded as being in unsociable hours, and has a negative impact on both personal and family wellbeing. …

Employees are less inclined to work on Saturdays and Sundays because they are dominant days for sport, leisure, community activities and religious celebrations. Time off during the week does not compensate for time lost on Saturdays and Sundays. This is the reason workplace arrangements have always recognised and endorsed penalty rates in the form of higher hourly payments for these days.

The very term ‘penalty rates’ is revealing. The higher wages are not to reward the employee for turning up at an inconvenient time, but to punish the employer for transgressing a prescriptive form of familism, which sets out what families must do at which times. This is an old-fashioned view of the family, the one found in the (in)famous Harvester Judgment of a man working full-time, with a wife at home to do all the cooking and shopping, minimising the need for paid workers to offer those services at ‘unsociable’ hours. It makes John Howard’s black and white TV era ideas seem modern.
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How satisfied are people with their jobs?

~ Andrew Norton ~ Leave a comment

The youth survey released this week found that 84% of full-time workers and 78% of part-time workers aged 18 to 24 were satisfied with their jobs. 41% said that they were very satisfied (though unfortunately there was no option just to be ‘satisfied’, just ‘very satisfied’ or ‘somewhat satisfied’). How does this compare with workers in general?

Surveys have consistently found high levels of work satisfaction. In the Changing Australian survey of 1983, 49% of respondents said that they were very satisfied with their work and a further 38% were moderately satisfied, with 86% satisfied overall. 14% were a little or very dissatisfied. The National Social Science Survey of 1987-88 asked respondents to rate their work satisfaction on a 1 to 10 scale. If we class 6 or more as moderately satisfied or above then 85% were satisfied, almost exactly the same as the 1983 survey. If 1 to 4 are ‘dissatisfied’ then 9% fell into that category, but if we count those circling ‘5’ as a little dissatisfied again we can get a near exact match with 1983.

In a Saulwick Poll conducted before the 2001 election, 86% were satisfied – again, a very similar number to the other surveys. They separately identified casuals, 21% of whom were dissatisfied compared to 13% of the sample overall. This is quite similar to the division the Newspoll youth survey finds, though whether the problem is the casual work status or the nature of the employment is not clear (many casuals are students, who may find the low-level service jobs they do while studying unstimulating compared to the studies and low-status compared to their aspirations).
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Shock, horror – young people satisfied with their lives

~ Andrew Norton ~ 14 Comments

A Newspoll survey of 18 to 24 year olds, commissioned by the Dusseldorp Skills Forum and reported in today’s Age, would have provided useful extra information for Cassandra Wilkinson’s new book Don’t Panic: Nearly everything is better than you think, a rebuttal of misery merchants like Richard Eckersley and Simon Castles (the Australian Literary Review has an extract from Wilkinson’s book).

Overall, 95% of those Newspoll surveyed regarded themselves as satisfied with their life overall, with nearly half ‘very satisfied’ – not quite in Danish life satisfaction territory, but up there with the Dutch and the Swedes. 88% are confident that things will work out ok in their working lives and careers, and 86% are confident that they will be financially secure. Of those currently in the workforce, 84% of full-timers and 78% of part-timers are satisfied with their job overall. Of those at university, 46% say it is better than they expected, while 15% say they are disappointed. About a third think that their standard of living will be better than that of their parents; most think it will be the same while 9% think that it will be not as good.
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Tax and don’t spend

~ Andrew Norton ~ 41 Comments

Last week we had an extensive debate on whether tax cuts would be inflationary or not. Over the weekend Newspoll was finding out how many voters buy this line, and the answer seems to be at least 30%. Though both ACNielsen last week and Newspoll this week find 66% of their respondents want a tax cut, Newspoll followed up with this question:

Some economists believe that giving personal income tax cuts in the budget may lead to a rise in interest rates. Given this possibility, would you personally be in favour or against income tax cuts being given in the federal budget?

At which point support for tax cuts dropped to 36%. It seems that Australian public opinion has moved from tax and spend to tax and don’t spend, which is possibly even worse. Winning obscure macroeconomic disputes may be important to attempts to stall Australia’s ever-expanding state.

Labor and same-sex relationships

~ Andrew Norton ~ 21 Comments

At its conference last week, the ALP endorsed national legislation

which [would] allow same-sex couples to register their relationship and secure legal recognition of their relationship in areas such as property rights and superannuation benefits.

As usual, the idea did not please everyone:

The national secretary of the Shop, Distributive and Allied Employees Association, Joe de Bruyn, said the Tasmanian scheme [on which the policy is modelled] gave same-sex couples the same status as married couples, which would demean and undermine marriage. …

He said the policy would be poorly received in suburban Australia and would make it harder for the Opposition Leader, Kevin Rudd, to win the 16 seats that Labor needed to defeat the Howard Government.

We’ve discussed the rather difficult-to-detect logic of the first claim before, and some newly unembargoed questions from the Australian Survey of Social Attitudes 2005 enable us to consider the second, at least if we consider it a near-equivalent to civil unions.

The overall result, with 48% of respondents being in favour of civil unions, was consistent with two other polls on the issue, which registered 45% and 52% support. As is common with questions on this subject, there was a big ‘neither agree nor disagree’ response of 19%, suggesting that this is still an open debate for many people. A third are opposed to civil unions.
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Does the ‘fairness’ of Fairtrade coffee matter?

~ Andrew Norton ~ 113 Comments

According to The Weekend Australian, regular commenter Sinclair Davidson and Tim Wilson of the Institute of Public Affairs are going to the Australian Competition and Consumer Commission, alleging that Oxfam has engaged in misleading or deceptive conduct over its Fairtrade coffee. According to Oxfam:

The term Fairtrade refers to an independently audited product certification and labelling system that ensures those who grow and produce coffee get a fair go. It does this by:

Paying farmers and workers a fair price for their work
Helping them gain skills and knowledge to develop their businesses in the global economy
Providing a certification and labelling system to ensure Fairtrade standards are met and that the benefits of Fairtrade get back to the farmer who produced the product

But according to Tim, drawing in part on this Cato article:

there was evidence that Fairtrade products could do more harm than good for coffee producers in undeveloped nations. He cited reports alleging producers had been charged thousands of dollars to become certified Fairtrade providers and some labourers received as little as $3 a day.

I know nothing about how much Fairtrade affects coffee producers, but if we were to be a little cynical about Fairtrade consumers it perhaps doesn’t matter much whether it is good for producers or not. As I have long argued (eg here and here) there is a market for political gestures, and how effective the gesture is likely to be doesn’t seem to be a huge part of the calculation.
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The problems low ‘unmet demand’ conceal

~ Andrew Norton ~ 7 Comments

The latest report on unmet demand for university places shows that the number of ‘unsuccessful eligible applicants after discounting’ is down for the third year running, to 13,200. Among school leavers who did OK in their exams unmet demand is very low. Of the 68,916 home state school leaver applicants with an ENTER of 70 or above, just 964, or 1.4%, did not get an offer.

It’s fair to say that at the aggregate level unmet demand isn’t now much of a problem – especially when we consider that some of those considered academically ‘eligible’ in the discounting process, those with an ENTER of 53 or above and all those applying on another basis, probably would not be offered a place even if there were no quotas holding down the number of places universities could offer (a point I expand on in my recent CIS paper).

It’s when the applications, offers and acceptances data is examined in more detail that we begin to see problems. As I argued in my CIS paper, and which the 2007 statistics show again, there are persistent patterns of over-supply relative to first-preference applications in some fields (agriculture and science) and under-supply in others (eg in medicine, dentistry and veterinary science 50-60% of applicants with ENTERs of 90+ do not get offers).
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Same story, different headline

~ Andrew Norton ~ 5 Comments

Me first, family later, says rich Sydney

Sydney Morning Herald, 27 April 2007, reporting that:

SYDNEY’S most affluent citizens may be the most shallow and selfish people in the Asian region, placing lifestyle and real estate acquisition over family wellbeing in their list of priorities.


You guessed it, Sydney the most selfish, shallow

The Age, 27 April 2007, reporting that:

SYDNEY’S most affluent citizens are the most shallow and selfish people in the Asian region, placing lifestyle and real estate before family wellbeing on their list of priorities.