Thursday, May 22, 2014

Workforce Ageing – Myth and Reality

We regularly hear expressions of concern about workforce ageing and the accompanying idea that a diminishing number of workers is going to be left with the burden of carrying a population grown old and grey. This kind of thinking and rhetoric lies behind proposals to increase the retirement age and/or reduce the incomes and support being received by pensioners and retirees.

It is true that the workforce is ageing. What is not true is that this is a problem. Figures about the number of retirees compared with workers fail to state the full workforce participation picture, which needs to take into account how many children there are, and the proportion of women who are working. If present rates of labour force ageing and participation continue, the proportion of the total population in the labour force will fall from the present level of 53 per cent to around 44 per cent by 2061. But this level of participation is nevertheless higher than the 42 per cent we had back in 1966. Back in 1966 the nation was thriving, and yet even 50 years from now we will have a higher participation rate than we had back then, when there was no talk of a small workforce carrying a large out of work burden.

Moreover although there are more baby boomers (born in the 16 years between 1946 and 1961) than there are people born in the 16 years earlier, between 1930 and 1945, ALL of the 16 year age groups younger than the baby boomers are more numerous than they are. Baby boomers do NOT form a unique bulge in the population python.

Third, given that we have hundreds of thousands of people who are out of work, workforce ageing and retirement means that the unemployed get a chance to get a job. If we didn't have, or don't have, older workers retiring, then the chances of young people or long term unemployed getting a job fall accordingly. Workforce ageing will solve unemployment, and if you genuinely want to solve unemployment - not everybody does - this is a good thing.

Finally, talk about population and workforce ageing devalues older people and their ongoing contribution, financially and as carers and mentors and role models, to society. For a more detailed and evidence based account of the demographic forces at work in the Australian workplace, see the link below: The ageing of the Australian population: triumph or disaster?, a report prepared for the Monash Centre for Population and Urban Research by Dr Katherine Betts, released 28 April 2014.

Thursday, May 15, 2014

Declining Trust in Politicians and Governments

In the first week of May I had the opportunity to attend the OECD Forum during OECD week in Paris. One recurring theme during the discussions was a lament about declining trust by the public in governments and politicians, apparently occurring right around the world. The OECD noted this as a very important issue. People were concerned that lack of faith in the political process led to public disengagement, and were also concerned about ongoing and quite widespread problems of corruption.

This is an absolutely valid concern, but sits awkwardly with the OECD’s unwavering devotion to growth and to increasing aggregate demand – the OECD wants more people, more workers, more consumption, more everything! The thing is, increasing population undermines political participation and political engagement. It is RATIONAL to disengage if you are in reality powerless, which you certainly are in large population countries like India and China. The late Professor Albert Bartlett noted that the population of his home city, Boulder, Colorado, had increased tenfold during his lifetime, leaving him with one tenth the say in the running of it that he had initially.

If citizens disengage, the “agency problem” identified by Race Mathews and others kicks in. The people who are paid to run the place (including public servants) have much more at stake than any given ordinary citizen, who has little to gain individually from trying to catch them out or stop them. The risk of corruption at the top by and large is greater for large population countries than it is for small population countries.

The OECD would have more success in maintaining or increasing public trust in politicians and governments if it stopped supporting the “bigger is better” model and worked to slow growth down.

Protect the ABC

Recently my office was presented with a petition calling on the Australian Government to keep our public broadcasters fully-funded. I fully support this sentiment.

On election eve last year, Prime Minister Tony Abbott made a promise to Australia that there’d be no cuts to the ABC or SBS under a government he led.

The ABC and SBS provide real stories, great educational programs, good dramas and uniquely Australian comedy shows.

There has been a great deal of support for the public broadcasters since the 2013 Federal election, with May 7 seeing simultaneous petition deliveries around the country. Over 60 petition deliveries took place in regional towns and cities across every state and territory, including in the electorates of key budget decision-makers, Communications Minister Turnbull, Treasurer Hockey and Prime Minister Abbott.

What this demonstrates is the significant level of support in the community for the public broadcasters that the Government would be wise to heed.

Wednesday, May 14, 2014

Boko Haram

The kidnapping of more than 200 girls by the Islamic militant group Boko Haram is a heinous act that has galvanised the world community into action.

Boko Haram, which means "Western education is sinful", is loosely modelled on the Taliban movement in Afghanistan. The group considers all who do not follow its strict ideology as infidels, whether they are Christian or Muslim. It demands the adoption of Sharia law in all of Nigeria. The group has waged guerrilla war on the state and attacks have focussed on soft targets including children, students, teachers and other civilians.

I oppose religious fundamentalism, and in this case deplore the cowardice it represents with kidnapping of innocent school girls, as highlighted by the bizarre claim of Boko Haram’s leader to be following God’s will by threatening to the sell the girls in the market.

What is also troubling are reports from Amnesty International that Nigeria’s military had been warned of an attack on the school where the girls were abducted from but failed to act for nearly five hours.

The Nigerian government must work tirelessly to provide adequate information to the families of the abducted girls and on the authorities’ current efforts to ensure their safe release. The families – and the abducted girls, once they are freed – must be provided with adequate medical and psychological support.

This unconscionable act committed by Boko Haram, who are determined to keep these girls from getting an education, will not be tolerated by the international community who must stand as one in condemning this backward and violent worldview, while working to secure the release of the girls and bring the perpetrators to swift justice.

Budget 2014-15

Being born in 1955 might just be the smartest thing I have ever done. The Budget demonstrates the truth of the expression, “You can only be young once, but you can be immature forever”.

This is not the adults in charge, these are intergenerational warriors. We no longer think there is anything mature about giving the young’uns a thrashing – taking the Under 25s off Newstart and fitting them up with 60% of the cost of their education. Nor is there anything mature about saying Grandad, get your backside off the couch and get a job.
The first problem with that is that if everyone works till they’re 70 instead of retiring then they’ll be occupying the jobs that young people should be moving into.

The second problem is that both the young unemployed and mature age unemployed – and the Treasurer reminded us that we have over 700,000 unemployed – have little prospect of finding jobs as long as they remain in ferocious competition with the over 1 million non-Australians who are here on temporary visas which give them work rights.

The Government itself doesn’t believe all this ‘tough love’ is going to work. Their unemployment projection for the whole of the forward estimates is around 6%, so they don’t believe their own rhetoric. And it’s true, it won’t work. The thing that would work is to cut back the migrant worker programs.