Category: Employment & work

Are graduates earning less compared to other workers?

~ Andrew Norton ~ 10 Comments

The people who write Graduate Careers Australia’s starting salaries report must love their time series of graduate salaries as a percentage of average weekly earnings, because they keep highlighting it in their report and in their media release, even though they are coming close to admitting is is meaningless statistical junk.

I can see why they want to keep it – it goes back nearly 30 years, to 1977 (the data in the report released yesterday is for people employed in early 2006). On surprisingly few topics do we have consistent data going back that far. And for people considering the costs and benefits of university study, it is useful to know their likely earnings compared to the alternatives. But as the Graduate Salaries 2006 report says:

…it is important to note that average weekly earnings may be positively affected over time as more and more graduates enter the workforce. As their careers progress their salaries grow, overall average weekly earnings are pushed up.

The only thing wrong with that is the ‘may’. They have a table showing full-time workers with a diploma and above going from 19.7% in 1998 to 27.8% in 2006. Using only bachelor and above and all workers, ABS Education and Work shows an increase from 14.5% in 1994 to 23.9% in 2006. I’m not sure what proportion of workers had degrees in 1977, but we’ve gone from graduates having a small impact on male average weekly earnings to a large impact – nearly a quarter of all earners. As bachelor degree graduates typically earn half as much again as people with Year 12 qualifications only, the statistical effect is not trivial.

This isn’t the only problem. Continue reading “Are graduates earning less compared to other workers?” →

Are there too few university students? (Again)

~ Andrew Norton ~ 10 Comments

In the latest issue of People and Place, as reported in this morning’s papers, Monash University academic Bob Birrell and his colleagues Daniel Edwards and Ian Dobson argue that there is a widening gap between the demand for and supply of university graduates.

In doing so, they disagree in part with the analysis in my paper (pdf) on graduate mismatch. One explanation they offer for the number of graduates in non-graduate jobs I explored and decided was probably not major – the possibility that it is driven by women framing work around family. Female overqualification (20%) is only slightly higher than male (18%), and there are other possible explanations such as the over-representation of women in Arts courses.

They do however raise one point that I should have explored more, which is what role migration of graduates has played in boosting numbers of university-qualified people in jobs that don’t require degrees. There is, as they say, a history of migrants having trouble finding jobs matching their formal education.

Nevertheless, I don’t think they deal with central argument: that there is no evidence anywhere in the labour market data of an aggregate shortage of graduates. In 2006, there were more than 500,000 graduates in jobs that don’t require degrees or unemployed. Continue reading “Are there too few university students? (Again)” →

The familist redistribution of time

~ Andrew Norton ~ 114 Comments

Australia’s leading left-familist academics are at it again today, with a 39 point list of more taxes and regulations, which they call ‘Benchmarks: Work and Family Poilcies in Election 2007’, to enforce their view on family life on the rest of us.

I have criticised much of the underlying analysis in previous posts (eg here, here, and here).

While I have objected to the way familists want to redistribute money to people with children (or to people with children on behalf of children, as backroom girl would insist), I have not emphasised they way they propose to redistribute time.

Given that most taxpayers earn their income via personal labour, some redistribution of time is implicit in the tax system. To get a given amount of after-tax income, the higher the taxes levied to support families the more pre-tax income a worker has to earn, and that means longer hours. Most men prefer to work full-time anyway, so while familist policies appropriate the results of their labour, they probably don’t actually significantly increase male hours. Women, however, are often more sensistive to the financial rewards from working (hence the complaints in ‘Benchmarks’ about high EMTRs) and their part-time work is used to bring household income up to a desired level.

But also important is the redistribution of hours within the workplace. Continue reading “The familist redistribution of time” →

Does union power still frighten voters #2?

~ Andrew Norton ~ 14 Comments

According to The Australian‘s take on a Newspoll on unions and political parties on Friday:

…the Coalition’s campaign [on union power] is not resonating with middle Australia as 55 per cent of voters rate Mr Rudd’s handling of unions as good and only 27 per cent rate his performance poorly – including 10 per cent of Labor supporters – while 50 per cent say Mr Howard is not doing a good job. …. while the Coalition claims it is on an election winner with its plans to demonise the unions, the Newspoll suggests voters will be more discerning.

This is a different conclusion to the one I came to a couple of weeks ago, when I argued that though improved union behaviour has been rewarded with significantly fewer people thinking that they have too much power, there was life yet in this issue for the Coalition.

I see two problems with the Newspoll. The first, as I noted in several posts about issue polling, stances on issues and party preferences are often closely tied together, so it is hard to know whether a person supports party X because of their stance on issue Y, or holds their opinion on issue Y because of their support for party X. Mentioning the party in the same question as the issue, as Newspoll does in this case, increases the chance that underlying party preference will drive opinions on issues.
Continue reading “Does union power still frighten voters #2?” →

Why are people satisfied with their work-life balance?

~ Andrew Norton ~ 9 Comments

According to The Age‘s report of the first Australian Work and Life Index

…work follows most people beyond the office with men especially reporting more “spillover” than women. Yet, in a seemingly contradictory finding, three-quarters of those surveyed said they were satisfied with the bargain struck between work and life. (emphasis added)

The seemingly contradictory statistics run like this: around half of workers say that work interferes with ‘activities outside work’ (combining ‘sometimes’ and ‘often/almost always’) and with ‘community connections’. Sixty percent think that it ‘interferes with ‘enough time for family and friends’. Only 16% say that they ‘never/rarely’ feel rushed for time. Yet 75% say that they are satisfied with their work-life balance.

The missing concept that leads journalists to think these results are contradictory – and a concept that is missing rather too often from labour market analysis – is trade-off. There are more worthwhile things that most of us would like to do than we can fit in a day, a week, or even a life, and this means that we cannot maximise them all in the same time period. Yet we can be satisfied with our overall work-life balance because given the objectives we have we are content with the trade-offs we have made.

This is evident in the statistics provided in Work and Life Index report. Continue reading “Why are people satisfied with their work-life balance?” →

Does union power still frighten voters?

~ Andrew Norton ~ 9 Comments

Over at LP, Mark Bahnisch asks whether the government’s attack on union power under Rudd will work:

There’s an unexamined premise in commentary about this tactic of the Government – that unions are wildly unpopular. But how true is that? Unfortunately, there is no time series data on union sympathy. But there are three large-scale surveys conducted this decade that reveal some fascinating results.

Actually, there is time series data on union sympathy – I reported on nearly twenty years of fairly consistent questions in this 2005 article. On the the issues of whether unions have too much power and whether there should be stricter regulations of trade unions there is a clear decline in hositility towards unions. All the polls prior to 1990 (including earlier polls with different questions that I did not show in that article) showed between two-thirds and three-quarters of respondents thought that unions had too much power. This century, less than half of respondents have thought that.

This accords with changes in objective conditions. In the worst year of union havoc inflicted on Australian society, 1974, a staggering 6.3 million working days were lost to strikes. Continue reading “Does union power still frighten voters?” →

Do workers have more careers now than in the past?

~ Andrew Norton ~ 11 Comments

It’s commonly said that we can now expect to have several careers in a lifetime, as opposed to the more stable patterns of the past. Commenter Russell made this claim a few days ago, but he is hardly alone. In selling the University of Queensland’s courses and careers day, Associate Professor John Mainstone said:

Once it was the case that people pursued one career over a lifetime,’ he said. ‘Now people may undergo several career changes, so it is important to seek specialist advice to allow the widest range of future career options.

Monash University’s Graduate School of Business offers similar advice:

Gone are the days when employees would join a company and climb the ladder through vertical career paths. The biggest change is the shift from thinking about a single lifetime career to multiple careers.

Victoria University bids up the number of careers even further:

Today the 21st century demands much more from us. Did you know that current data suggests that we will have between 6 to 8 careers in our lifetime, and not just the one?

And careers councillor (sic) Heather McInnes goes further still:

We could reasonably expect to change our career throughout a lifetime, possibly up to 10 times.

Ten careers! The escalating number of careers we are supposed to experience sounds like a story that is improving with every telling. Continue reading “Do workers have more careers now than in the past?” →

Do employees work only for their own benefit?

~ Andrew Norton ~ 54 Comments

The latest ABS data on ‘working time arrangements’ received a tendentious report yesterday in the SMH:

ALMOST a third of Australian employees work unsocial hours – between 7pm and 7am – and even more complain they have no say about when they start or finish. ….Thirty per cent said their shifts regularly overlapped the hours between 7pm and 7am as part of their main job. Three in five said they had no say about when they started or finished.

As for weekends, 16 per cent said they were required to work on Saturdays, and 8.5 per cent on Sundays. One in four were not always allowed to choose when to take their holidays. (emphasis added)

Note the SMH interpretations I bolded. Working after 7pm isn’t necessarily ‘unsocial’ – a lot of people like their colleagues. The ABS report doesn’t anywhere suggest that people were complaining about having no say about when they start or finish; that simply goes with many jobs where predictable opening or operational times are necessary. The ABS doesn’t say that 16% of people are ‘required’ to work Saturdays; it just says that 16% do work Saturdays. As I noted earlier in the month, weekends and evenings are the only time some people with other commitments can work. And workers in particular industries can’t take holidays whenever they choose for good reasons, eg school teachers can’t take holidays during term.

What’s missing in this reporting is the sense that an employment arrangement is one of mutual advantage between employer and employee to provide goods and services from which other people benefit – rather than just something to benefit the employee, regardless of its effects on others.
Continue reading “Do employees work only for their own benefit?” →

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.
Continue reading “Are workers stranded in pre-backflip AWA jobs?” →

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.
Continue reading “Why ‘penalty’ rates?” →