Category: Employment & work

Will the minimum wage decision help the government?

~ Andrew Norton ~ 20 Comments

The industrial relations scare campaign isn’t going so well. Not only are jobs being created at a surprisingly fast rate, but now the Australian Fair Pay Commission has delivered a pay increase for minimum wage workers that nearly equalled what was, presumably, the union ambit claim. ACTU Secretary Greg Combet is describing it as a

a slap in the face for the government and the business community, which had wanted a smaller increase.

It’s certainly bad news for business, which must pay the higher rates, and perhaps some unemployed people who will be priced out of the labour market. But politically it is good news for the government, in the face of persistently negative polling on their reforms

As I noted in several Catallaxy posts, public opinion on the IR reforms has been remarkably stable – people made up their minds very early on, and nothing either side said seems to have produced any real net change. The interesting question now is whether as information contradicting union/ALP scare campaigns mounts it will start to reduce the proportion of voters opposing the reforms.

Norton vs the Arts lobby, again

~ Andrew Norton ~ 4 Comments

University of Sydney Dean of Arts Stephen Garton is again spruiking his courses under the guise of news. A story in the SMH, without giving a source or actual statistics, claims that that ‘classical studies – and the humanities in general – are booming’. Garton is reported as saying that:

students had returned to general degrees as they realised the changing nature of the job market. The dotcom boom had helped the humanities, he said, as when it ended it taught students a narrow expertise could be redundant by the time they graduated.

It’s true that commencing enrolments in ‘society and culture’ (which includes arts, but also law) were up between 2004 and 2005, though three vocational fields (architecture, health, and education) were up by more in percentage terms. But claims that student perceptions have greatly changed should be treated with scepticism. In reality, the ‘market share’ amongst disciplines is quite stable over time. Since 2001, arts share has fluctuated over the range 25.46% to 26.48%, with the latest share at 25.82%. In absolute numbers, they are down more than 4,000 on the peak year of 2003. It’s possible that particular universities are seeing an upsurge in applications, but there is no general change in thinking apparent in these figures.

Nor is there any evidence that acquring an arts degree, as opposed to some other degree, gives you generic skills that enable you to adapt better to the ‘changing nature of the labour market’ – though having an arts degree is more likely to mean that you will have to rely on generic skills rather than on the specific content of your course. The book How College Affects Students surveys the American higher education research literature, and struggles to find consistent differences between student majors in development of generic skills, except that quantitative courses tend to increase quantitative competencies (as one would hope). But the book says that the ‘evidence is less clear-cut for the acquisition of verbal skills’, with one study finding that social science courses improved them, but five others not replicating the finding (p.91). Similarly, the evidence on acquiring critical thinking skills is also inconsistent (p.175). It’s not that there aren’t usually improvements in these skills during the university years; it’s just that there aren’t reliable differences between disciplines.

When asked at the end of their course about their acquisition of generic skills, with questions about analytic, problem-solving and written communication skills, ‘society and culture’ graduates don’t stand out as having acquired unusually high confidence in their abilities. As reported in Graduate Course Experience 2005, 67.2% of bachelor degree graduates agreed that their generic skills had been improved (that is, on average they picked one of the top two points on a five-point scale). However, graduates in the sciences, engineering, and agricultural and environmental courses all showed slightly higher agreement. The lowest agreement was among architecture students, on 59.2%.

I have raised issues like this before, to which the Arts lobby has replied with rebuttals of arguments I did not make, anecdotes and methodological points: anything but social scientific evidence for their case. To make it clear – I am not arguing against arts degrees as such, though students need to be very careful in choosing their subjects. But I do think that universities should not make unsubstantiated claims about their services, and if they do newspapers should not simply report them without contrary comment.

Are Australians more job mobile than in the past?

~ Andrew Norton ~ 2 Comments

According to Yobbo in comments yesterday:

The modern workforce is a lot more flexible and a lot of people change jobs every 2-3 years.

It’s certainly true, as the labour mobility statistics show, that lots of people change jobs – in 2004, more than 40% of workers had been in their jobs for three years or less. But to imply that this is a trend, as Yobbo’s remark does, is yet another example of our poor ability to compare over time. In an article labour market economist Mark Wooden wrote in 1999, he has a table showing that in 1975 36.1% of workers had been in their jobs for two years or less. In 2004, 34.5% of workers had been in their jobs for two years or less, a slight decline in short-term job holding.

Another curious – because it does not conform with our perceptions – feature of the 1975 statistics is that the ‘jobs for life’ that we supposedly use to have are rather hard to find. 8% of the workforce had been in their jobs for 20 years or more, slightly less than the 8.6% in that category in 2004. In the same period, the proportion of workers in their jobs for 10-20 years grew from 12.4% to 15%.

One likely explanation is the ageing of the workforce, with the average worker nearly three years older than 20 years ago. As people get older they tend to stay in their jobs for longer periods of time. Having turned 40 I’m noticing this in my peer group (and saving time in updating my contacts) and myself, having now spent 6.5 years with the same employers. And with young people a shrinking proportion of the total population, and delaying their entry to the workforce by studying, the proportion of workers with a propensity to be job fickle has decreased.

Australia’s surprisingly secure workers

~ Andrew Norton ~ 14 Comments

Writing in the SMH this morning, Labor MP Tanya Plibersek says:

…job insecurity is bad for workers’ health. Fran Baum from Flinders University followed the fate of Mitsubishi Motors workers who faced losing their jobs. Their health was clearly affected by the insecurity. These new work laws, which make it easier to sack workers, may contribute to worse health in companies that threaten to make use of the new provisions. Employees in companies with fewer than 100 employees can now be sacked for any reason, or no reason; and companies with more than 100 employees can be sacked for anything as long as it’s called an “operational reason”.

I’ve no doubt that the prospect of losing one’s job is stressful (I remember election night in 1998…), and sustained stress can contribute to poor health. The issue that interests me here is whether the new industrial relations laws will contribute to job insecurity in any significant way. One of the curious things about the modern labour market is that the rise of a large, easily sackable casual workforce has not had the effects on job security that many people suppose.

Indeed, despite casualisation, and despite the impending WorkChoices legislation, when Roy Morgan Research did its survey on job security late last year it found the highest level of perceived job safety since it started asking the question back in 1975 – 83%. Morgan doesn’t disaggregate its data by employment type (its strength is a 30 year time series) but other surveys have, and consistent with Morgan’s aggregate result they find that the difference in job security perceptions between casual and permanent workers is much lower than we might have anticipated.

For example, in the 2005 Australian Survey of Social Attitudes, 46% of casual workers and 49% of permanent workers said that they did not worry at all about losing their job. Taking those who worried ‘a little’ as reasonably secure, overall 73% of casuals and 83% of permanent workers felt secure in their jobs. In the HILDA survey (pdf) respondents were asked to give a percentage chance of losing their jobs in the next 12 months. On average, permanent workers thought they had an 8.5% chance of losing their jobs, and casual workers 13.2%.

It’s not obvious that official work contract status in itself produces even these modest differences in job security perceptions, given that casuals are disproportionately represented in occupations where labour demand fluctuates. That is, they are employed as casuals because they are in jobs that are inherently less viable, rather than casual status itself producing a significant amount of additional insecurity. If your employer is losing money your job is at risk regardless of your permanent status, as the Mitsibushi workers were; if your employer is doing well and you are performing OK you will be reasonably secure, even if you are a casual.

It follows from this that WorkChoices in itself probably won’t add much to job insecurity, which is primarily a product of the laws of supply of demand, and not the laws of the nation.