Category: Employment & work

What’s missing in Working Lives

~ Andrew Norton ~ Leave a comment

Unlike last year, the release of the 2008 Australia at Work report was unaccompanied by claims that rude Ministerial words amounted to threats to accademic freedom. By contrast, the welcoming of the Working Lives report by Julia Gillard was part of the generally uncritical response that the authors must have been hoping for last year.

Though like last year there is some interesting material in the report, the mix of data and advocacy – and the bills being partly picked up by the union movement – inevitably raises suspicions, not about the veracity of what is there, but about what has been omitted.

In Clive Hamilton mode, the Working Lives authors are keen to send the regulators in to make us go home earlier from work. But ABS reports showing that average full-time working hours and the proportions of workers spending more than 50 hours at week have been declining since 2003 are brushed off:

Despite claims of a downward trend, since the ABS has been collecting usual hours data in 2001, average usual hours have remained between 44 and 45 hours per week.

Continue reading “What’s missing in Working Lives” →

Australia’s surprisingly secure workers, part 5

~ Andrew Norton ~ 4 Comments

The ACTU made much of their claim that WorkChoices reduced job security, as part of their fight against weakened “unfair” dismissal laws. But it is surprisingly hard to find evidence that the legal arrangements surrounding employment security have any significant effect on either subjective job security (how highly people rate their chances of keeping their job) or objective job security (the actual rate of retrenchment).

The ABS labour mobility survey, released yesterday and covering the 12 months to February 2008 (ie, all under WorkChoices dismissal law), reinforces this point. Were there mass sackings as employers unfairly took advantage of additional rights to do so? To the contrary, the proportion of people who left their last job involuntarily through redundancy, dismissal or lack of work fell to 1.8% of all people who held a job in that 12 months, certainly the lowest since 1990, and quite probably the lowest ever recorded.* (I don’t have the 1980s surveys, but this is better than the 2.7% in 1972, at the tail end of the long post-war boom).
Continue reading “Australia’s surprisingly secure workers, part 5” →

Will Australian universities be hit by an employment domino effect?

~ Andrew Norton ~ 13 Comments

For the last decade or so, Australian universities have been funded by what has been called a reverse Colombo plan – a reference to the post-war scheme that brought thousands of Asian students to Australia on scholarships. Back then, Australians funded Asian education. Now, Asian students fund Australian education through the fees they pay. Without them, the Australian higher education system would collapse.

Obviously, students from much poorer countries than Australia like India and China – our two largest markets – are not doing this because they altruistically want to fund the human capital of middle class Australians. Many of them come here as students because they want to migrate. A 2006 survey of international students by Australian Education International found that about two-thirds of them planned to apply for permanent residence.

The ease with which international students have been able to migrate has owed much to the growth in skilled migration quotas during the Howard years (and continuing in Rudd’s first year), combined with rule changes favouring former international students. Historically, migration levels rise with employment levels, and the Howard government was no exception to this pattern.
Continue reading “Will Australian universities be hit by an employment domino effect?” →

Lower HECS for law?

~ Andrew Norton ~ 14 Comments

The idea of the government forgoing HECS payments for graduates who do things it wants seems to be growing in popularity. Maths and science graduates who become teachers will have half their HECS repayments refunded. Then there was the 2020 Summit proposal for a community corps funded by discounting HECS repayments. And in The Australian this morning a Law Council suggestion that the federal government pay all or part of law graduates’ HECS debts in return for agreeing to work in regional centres.

What this means, in effect, is that the Law Council wants the federal government to subsidise legal services in regional areas. But it is hard to see why legal services should be subsidised on a regional/city basis, rather than as at present through legal aid on an assessment of the client’s financial situation.

I’d have thought that there is a fairly simple market solution to this problem: if there are too few lawyers in country towns, then the price of legal services in those places will rise and attract more lawyers to them.
Continue reading “Lower HECS for law?” →

Higher education narratives

~ Andrew Norton ~ 40 Comments

According to the SMH report of the latest ANU Poll:

UNIVERSITIES are no longer seen primarily as centres of learning but as corporations most concerned about the bottom line.

And indeed 48% of respondents agreed with universities ‘mainly care about the bottom line’ compared to 39% who agreed that ‘universities mainly care about education’.

Yet 71% say universities are doing an excellent or good job (compared to 46% saying the same of public schools). Perhaps the bottom line/education question was a dumb one, since the two are interdependent – no education, no money; no money, no education. Yet it appeals to the narrative of the public education lobby, a narrative faithfully reinforced by the SMH over many years.

The public education narrative was also reflected in other answers. 70% of respondents thought that it had become more difficult for students from poorer families to get into university over the last ten years.
Continue reading “Higher education narratives” →

WorkChoices and work-life balance

~ Andrew Norton ~ 21 Comments

I am copping some flak for suggesting that falling divorce rates are inconsistent with left-familist complaints that WorkChoices undermine the family. It is certainly true that divorce rates are the most extreme indicator of family stresses, and would not pick up lesser harms to families. But are any indicators at all matching left-familist claims?

Commenter Michael Kalecki suggests that:

Work can be bad for families without divorce coming into it. An obligation to work longer hours for example.

That is true, but are people working longer hours since WorkChoices came into effect? Australian Social Trends 2008, published by the ABS, reports that they are not.

In 2005, the year before WorkChoices started, the average full-time employee spent 40.6 hours per week at work. By 2007 it had dropped to 39.4 hours – the lowest it has been since 1986, back in the days before any significant labour market deregulation. Part-timers also worked less, on average – though the drop for them was only small, from 16.2 hours to 16.1 hours.

What about full-time employees working more than 50 hours per week? This number is also trending down, from 23.8% in 2005 to 21.6% in 2007. I can only find trend data going back to 1994, but this is the lowest number since then.

The left-familists assume that employees are powerless in the face of employers indifferent to their other obligations, and that only regulation and unions can protect employees. In reality, the market functions much more effectively than that. As the HILDA data shows, employees rarely experience long-term dissatisfaction with work-life balance. Their job changes or they change their job.

Divorce politics #2

~ Andrew Norton ~ 15 Comments

A postscript to last year’s post on divorce statistics.

A common argument of left-familists is that WorkChoices is/was bad for families. I argued last year that this was not showing in the divorce statsitics; that these were continuing a downwards trend.

The divorce statistics for 2007, released today, confirm that this trend continued through WorkChoices’ first – and only – full year of operation.

It is only possible to calculate high-quality statistics in census years, ie divorces as a percentage of marriages, but in 2007 the crude divorce rate dropped from 2.5 per 1,000 persons to 2.3, with a nearly 7% decline in the absolute number of divorces.

Arguably only next year will we get a true marriage test of WorkChoices, because of the need for a year of separation before a divorce, but I doubt this trend will stop. It’s likely to be at least in part a prosperity dividend, and therefore the good economic conditions in 2007 will help produce another low divorce rate for 2008.

Does staff turnover cost 10% of GDP?

~ Andrew Norton ~ 7 Comments

According to reports in today’s Fairfax papers

STAFF turnover is costing Australian businesses $100 billion a year in lost productivity, training and recruitment costs – and generation Y is copping much of the blame. …

A new study shows staff turnover for workers in their 20s is running at 40 per cent a year. The rate for all workers is 18 per cent.

$100 billion is about 10% of GDP, and more than double all of education’s contribution to GDP. It doesn’t seem very likely that staff turnover has such a negative effect on the economy, particularly as there is also a balancing positive effect in achieving a better match between jobs and workers.

And if 18% of all workers are replaced each year at a cost of $100 billion it means that every job change costs about $52,000. Maybe some high-level job turnover has costs at that level, but in the industries where staff churn is greatest, accommodation, restuarants, cafes and retail, I’m sure it is a very small fraction of that, given the relatively low levels of skill typically required and the fact that employees will bring skills from previous jobs to new jobs.

Gen Y is being unfairly blamed too. Continue reading “Does staff turnover cost 10% of GDP?” →

Do law students outnumber lawyers?

~ Andrew Norton ~ 2 Comments

“I was under the impression that there were as many people in law schools as there are lawyers.”

– commenter Conrad, 14 August 2008.

This factoid has been around for a long time. As long ago as 1996 an article (pdf) could open by saying that

we are often reminded of the startling fact that there are more students currently studying to be lawyers than there are lawyers practising law,

though it did not actually examine whether that assumption was true.

Working out how many law students we have is not straightforward. The published student statistics report for law only in ‘load’, which means units of study coded as law. People who are not enrolled in law degrees do law subjects, eg commerce students take business law units. But with this caveat, in 2007 law units were equivalent to 24,979 full-time undergraduate students. Another way of estimating numbers is through the offers and acceptance data. In 2008, 5,672 persons accepted a place in a law course. But none of these numbers can account for JD programs, which are professional entry qualifications taught as postgraduate degrees (for which universities can charge full fees – expect to see these expand as the government’s ban on undergraduate full-fee places starts to bite).
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The work-life balance paradox

~ Andrew Norton ~ 6 Comments

The second work and life index report, written up at great length in this morning’s Fairfax broadsheets, has the usual left-familist calls for ‘firmer employee rights around controlling their working time’.

But it also has the same paradox as the first report: though most people say that they often or always feel rushed for time, and a quarter say work often or always interferes with enough time for friends and family, only 13% say that they are ‘not satisfied’ with their work-life balance, and nearly 70% say they are satisfied.

As I suggested last year, this study is missing a sense of the trade-offs people make. They should ask a lot more about how people feel about the work they do, not just in its personal rewards (money etc), but in how people see it contributing to something worthwhile.

In the 2005 Australian Survey of Social Attitudes, for example, about two-thirds of respondents agree or strongly agree with the statement that ‘my job is useful to society’, and nearly three-quarters agree or strongly agree with the statement that ‘in my job I can help other people’. 70% say they are proud to work for the firm or organisation that they do, and 60% say they are prepared to work harder than they have to for it to succeed. Continue reading “The work-life balance paradox” →