Tuesday, March 10, 2015

Victoria's Record Underemployment

The Intergenerational Report is used to claim that we don't have enough workers, and imply that we need more – either migrant workers or people working longer. The reality is the opposite.

Victorian workers are struggling to find enough hours in record numbers, with our under-employment rate now at its highest level for almost forty years. 293,000 part-time workers are looking for and available to work more hours but can't get them. 9.5 per cent of Victoria's workforce is now classified as underemployed, the highest since the Bureau of statistics started keeping records in 1978.

So the real problem we have right now, not the imaginary problem we might have in the future, is not too few workers, but too many.

The Intergenerational Report's unsurprising and unremarkable finding that the population is ageing is used to claim that the workforce is constrained by the supply of workers, implying that there is work for all who offer themselves. As the figures above show, this is rubbish. It leads to a "blame the victim" approach in unemployment, welfare to work programs and job readiness training.

The Report is used to claim that population ageing in Australia will be a debacle. Will it? Helpfully, there are other countries with a noticeably older population than Australia, so we can compare our performance with theirs. The Queensland academic Jane O'Sullivan has done this in a chapter in the book "Sustainable Futures", recently published by the CSIRO.

Denmark, Sweden, Germany, Finland and the United Kingdom all have a much greater old age dependency ratio than does Australia. Between 2000 and 2010 Australia's population grew at three times the rate of Sweden, Denmark, the UK and Finland, twice the rate of Norway's, and Germany didn't grow at all.

So with our much faster population growth and our younger workforce, we would have outperformed those countries, right? Wrong. Germany and the UK had the same per capita increase in income in the 2000-10 period, and Sweden and Finland had much higher growth in per capita income. And every one of those five countries performed much better than Australia in terms of the percentage of income received by the poorest quintile. This is important – income inequality in developed nations is strongly correlated with worse physical health, mental health, drug abuse, imprisonment, obesity, violence, and teenage pregnancy.

As Jane O'Sullivan puts it, in stable populations like Germany, people retire with considerable savings, and give more to the next generation than they receive from them. Their retirement opens up recreational opportunities for them and a job opportunity for a young person. In contrast, the vibrancy claimed for a rapidly growing population is often that of the crowded marketplace with more buyers than sellers, where recreation is something reserved for elites and foreign tourists.
As said by William Grey, from the University of Queensland, growth is the problem to which it pretends to be the solution.


  1. Australian politicians and economist are chasing the elusive pot of gold, of massive economic surplus, through population growth! It's bizarre, illogical and is devoid of a precedent. We enjoyed the benefits of growth in the past, in the baby boomer years when our economy and population grew, but that life cycle stage can't be replicated forever. There are limits to any growth, and Australia's economy has obviously hit the wall and not producing the jobs to keep abreast with out socially engineered population growth. In fact, population growth is being used to mask our economy's weaknesses, and artificially prop up our GDP. Our young people are victims of a sluggish economy, and according to the IGR, there's a bleak future for them! Future generations shouldn't be forced to face massive housing and education costs, over-work, unemployment and increasing poverty. Stealing from future generations, in a finite world, condemns us, and the greed of this generation of myopic politicians obsessed with "growth" at all costs!

  2. Future generations are condemned to harder work, congestion, poverty and loss of living standards. This economic model based on perpetual greed, and growth, is maligned and bizarre. How can heavy, ongoing immigration be justified? We can only end up like Europe with a strong "anti-immigration" movement. There's no pot of gold at the end of the road from this growth, just drudgery, poverty and lower living standards. Our once wealthy and "Lucky Country" is being eroded by poor management, and politicians obsessed with "growth" at all costs!

  3. Thank you, Kelvin. The Emperor, immigration, has no clothes. Presumably the vested interests in being able to froth up the economy to make it look less disastrous, at massive expense to our living standards, have too strong a hold over the media because you can bet your sweet bippy you obviously accurate conclusion will never be repeated in the opinion pages of the major newspapers.

  4. I am not sure how Federal Senate Committees work. I think one way for Kelvin Thompson to carry on his robust public debates about mass immigration and population growth would be organise a committee into the recent claims of large-scale fraudulent Visas gaining entry to Australia.. According to Monash researchers there is a substantial over supply of labour and fierce competition in the job market at the low skill level. Yet Australia's Politicians keep telling us Visa's are predominantly issued for high skilled workers? The Liberals seem to be ignoring the reports of large scale visa fraud - the new Immigration Minister is to focus on enforcement as opposed to settlement and visa processing. If the immigration system is faulty then surely that should be the main concerm for the Minister

  5. Real estate and property development are major industries, now, and is assumed to be a replacement for the mining boom! Superannuation funds, corporate and pension investments have major interests in property, and profits. We are locked into relying on mortgages, and rising prices of property. So, we must have continual population growth to fill the properties. Politicians, and major business lobby groups, have powerful interests in making policies, and influencing government decision for the benefit of the elite. Without strong innovation and manufacturing, the frenzy of housing and construction must continue, while the public remain enclosed in this big, expanding economic machine. The housing industry does not produce sufficient, ongoing jobs, and our economy is failing produce the benefits it did in the past. Our welfare is blowing out because there's no precedent for our population growth. There've been deep cuts to TAFE funding in fast growing States, and jobs growth is stagnating. Australian young people and unemployed are being undermined by temporary visa holders, that are much more attractive to the Big End of Town!

    1. I agree VivKay but that does not excuse the Australian government allowing (what looks like a faulty visa programme) to continue to operate. Australia should be seeking highly skilled migrants only, We have significant youth unemployment over here in Perth. But we are now accepting most Visa's from countries which are still at the very low end of the UN development index scale ( what we used to describe as 3rd world). And they have overtaking skilled visas from the UK.