David Leyonhjelm: Let the people work

From the Financial Review on Thursday 12th

Thousands of Australians would love to have paid work. They include those just out of school, just out of jail, age and disability support pensioners, sole parents and refugees.

Thousands of Australian businesses would be willing to take a chance on these job seekers and pay them more than the $5 to $10 an hour they currently receive on welfare.

But they are forbidden from doing so. It is against the law to offer or accept any such arrangement. To take on a new starter and pay them even double their welfare payment is illegal. No matter how poor their resume or how willing they are to work for rates of pay and/or terms and conditions that suit them and their families, they can only be employed if they are paid the minimum wage, notionally about $16.40 an hour but over $20 an hour for some casuals.

Such bans on low paid work create unemployment. Before he entered Parliament and became Labor’s Shadow Assistant Treasurer, Dr Andrew Leigh was a professor specialising in labour economics. He found that reducing the minimum wage in Western Australia by ten percent would increase employment by around three percent within three months.

Over a longer period, the employment gains would expand. And a reduction in the federal minimum wage would have an even greater employment impact, as the WA minimum wage in Leigh’s study covered very few workplaces.

In a separate study Dr Leigh found that most of the people on the minimum wage are in middle income households. By contrast, low income households are typically in that position due to unemployment. Abolishing the minimum wage, by creating employment, would help them the most.

Other studies have shown that most people on low wages move on to higher wages after about a year. This shows that low wage jobs are an opportunity for people to start at a bottom rung and work up. The problem is, Australia’s regulated minimum wage is so high that many cannot even reach the bottom rung and begin to climb.

In fact, Australia’s minimum wage is one of the highest in the world. Australians start paying income tax once their annual income exceeds $18,200, but they are not allowed to get a full time job unless it pays more than $32,000 a year. In the OECD, only Luxembourg and France have a higher minimum wage.

The minimum wage in both New Zealand and the UK is 84 per cent of ours; Canada’s is 78 per cent, Japan’s 58 per cent and South Korea’s 42 per cent. Other countries with which we might compare ourselves, including Austria, Germany, Finland, Sweden, Switzerland, Italy and Singapore, have no minimum wage at all.

Despite the weight of evidence, Dr Leigh has an uphill battle to convince his colleagues of the futility of minimum wages. While in office Labor was proud of its disability policy but struggled to see that the minimum wage was a key impediment to a better life for many disabled Australians.

The Greens similarly take pride in their advocacy for refugees and opposition to the recent reduction in sole parent payments, but cannot see that a truly caring policy for both refugees and sole parents would be to allow those who want to enter the workplace to do so. The high unemployment rate for refugees is staggering and raises concerns for the future.

The Coalition faces a similar dilemma. The Employment Minister, Senator Eric Abetz, is from Tasmania, where unemployment is persistently higher than the rest of Australia and youth unemployment is over 40% in some areas. Even though living costs are markedly lower there, the minimum wage is the same nationally. It is this fact that drives such a sorry statistic.

Australia’s minimum wage runs counter to the Australian credo of giving everyone a fair go. It is time sensible voices in the Parliament agreed to help the underdog by removing the barriers that prevent them from getting a job and improving their lives.

David Leyonhjelm is the Liberal Democrats’ Senator-elect for NSW.

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68 Responses to David Leyonhjelm: Let the people work

  1. One of the idea’s I’ve been tossing around lately is the concept of a minimum wage scaled to the local cost of living. As David noted, the effects of a minimum wage are far more distorting in areas with lower costs (and often lower wages), resulting or at least contributing to the higher unemployment in those areas.

  2. Mk50 of Brisbane, Henchman to the VRWC

    The more I hear of Leyonhjelm the more impressed I am by the man.

  3. sdfc

    I agree Drift. Industrial relations should be a state matter.

  4. Well… to my knowledge, IR is a state matter that has only been ‘referred’ to the Federal Government. I have no idea what the process of un-refferral is / if there is one.

  5. Andrew

    I find it hard to believe that multinationals and Australia-wide companies would really like different IR and for that matter, taxation systems to deal with across all the different states and territories in Australia.

    I support competitive federalism, but I don’t think it is universally practical for all areas.

  6. Ant

    But, hang on, if you have all these people working and earning their own keep rather than leaching off the system, won’t that also mean that they’re less dependent on a big, fat, bloated nanny government for their existence?

    How’s this help the left?

  7. Amused

    Now Mr. Leyonhjelm is getting to the meaty part of the bone.

  8. sdfc

    I find it hard to believe that multinationals and Australia-wide companies would really like different IR

    Why not?

  9. Andrew

    Expect to be be associated with 1-word slogans and be the subject of TV ads talking about something called “WorkChoices”.

  10. wreckage

    I find it hard to believe that multinationals and Australia-wide companies would really like different IR and for that matter, taxation systems to deal with across all the different states and territories in Australia.

    Who gives a fuck what they like? You’d really prefer hundreds of people to be unemployed – and due to long unemployment, unemployable – so a multinational can avoid a mild accounting headache???

  11. Rafe-

    I have been repeatedly finding references to pushing towards what Marx called a needs economy and the OECD and UNESCO and as of yesterday the US and UK are calling a subjective well-being obligation. Yes the high minimum wage creates unemployment for the reasons you lay out so well. But that chronic unemployment among identifiable groups that can be manipulated to feel aggrieved at particular institutions helps ignite action for social change.

    Everything that made the Anglosphere unprecedentedly prosperous in being shut down in favor of Statism, dirigisme, and rule by bureaucrats. It’s as if those of us who escaped any history of feudalism are to now find out what it is like to live in a society where everyone wears the yoke of planned direction. But of course that kind of honest explanation of intent only makes it into “Not to be Copied” type documents.

    Which the Eastern Europeans I have noticed always disregard and load onto Internet anyway.

  12. johno

    To take on a new starter and pay them even double their welfare payment is illegal.

    This is the fundamental point that needs to be hammered home every time you hear someone moaning on about high youth unemployment.

    It is illegal for employers to hire them at a wage that is profitable for the employer. Leftist feeling good about themselves condemns the young to joblessness.

  13. Noddy

    >Everything that made the Anglosphere unprecedentedly prosperous in being shut down in favor of Statism, dirigisme, and rule by bureaucrats. It’s as if those of us who escaped any history of feudalism are to now find out what it is like to live in a society where everyone wears the yoke of planned direction. But of course that kind of honest explanation of intent only makes it into “Not to be Copied” type documents.<

    Thanks Rafe.
    The most destructive force in OUR society, apart from financial ignorance, is deliberate financial inflation. Inflation drives the costs to industry and at the same time fuels the power of unions to mobilize workers wage demands like a dog chasing its tail.
    Employment for younger people should be a goal of society but at the same time older people should have the opportunity to retire if they wish and can. Raising the minimum age to access pensions and super benefits is a step in the wrong direction.
    The bureaucratic socialist state looms large and it will encompass everyone… there will be no escape!

  14. sparky

    OK I am ignorant here – why is it illegal to pay an unemployed person more than what the government gives them via Centrelink, but less than the gazetted minimum wage? ( apart from the obvious fact that it is LAW).
    Straightaway getting people off the public teat would be a good thing.That smacks of good sense.

    So, why were these laws created;under what circumstances, and why cannot they be scrapped?. The spectre of slave labor ( real or imagined) seems to be hovering in the background. What small business owner in their right mind take on an unskilled untrained untested worker, paying them the current minimum wage. If they turn out to be a dud, give them the flick ( if you can) and start again? ” How to go Broke in Ten Easy Lessons”.
    Anyhoo,I would appreciate some input re my opening comments. Cheers

  15. Jazza

    Put on your body armour, David–the unions will come gunning for you, post haste!

    An excellent piece, I particularly liked the tale of Dr Leigh,and wonder how he lives with his hypocrisy day to day now he is an ALP politician.

  16. duncanm

    What’s so frustrating is that this is startlingly obvious, and has been for some time.

  17. Rafe

    Recall what I have been saying lately about producing one page sheets of information in simple terms to explain things like the effect of the minimum wage so that EVERYONE can understand.

    I was thinking one issue at a time and one target group at a time so the explanation is crafted to fit the specific audience.

    You don’t talk about productivity and the GDP to unemployed youth, you talk about getting a job that pays better than the dole and gives them a chance to contribute to a team and get some skills to make them employable at a higher wage.

  18. sabrina

    There should be more pollies like David L on the two major parties, society will change for the better then.
    Limiting the number of ex-unionists, lawyers and accountants among politicians will be a start.

  19. Spiro

    To take on a new starter and pay them even double their welfare payment is illegal.

    In Greece, to start a business is illegal, let alone taking on one of the 50% young unemployed, unless you follow the legal process of registering a business which takes two years on average and costs the average annual wage.

    In Australia, we have removed such rigidities and you can register a business and employ quite quickly. But, as Jazza states, I find ex-professor Leigh’s position as an ALP politician hypocritical, and I wonder if he will follow the ALP-ACTU line, or promote the removal of labour market rigidities such as minimum wages. In any case, with such publications on his CV, I doubt he would become very influential in a party led by the union hack Shorten.

  20. Elizabeth (Lizzie) B.

    What actually happens is that there is a lot of ‘under the counter’ low wage casual employment for cash, no records kept and no responsibility taken. But not enough of it to really impact on the overall problem and reduce the unemployment rate.

    The sense of a lower minimum wage is patently apparent. The proviso is that it has to be explained. The Coalition lost the explanatory factor big-time during the Union Work Choices campaign. They should seize it back with both hands and a lot of money and with their Ministers going full bore at explanation. This can’t happen unless we have a more informed and less ‘left-washed’ populace. Wrenching tales of how the young and poor are being denied help to get on the first rung need to be put out there to counter the wrenching tales of the Union campaign.

  21. Token

    Australia’s minimum wage runs counter to the Australian credo of giving everyone a fair go. It is time sensible voices in the Parliament agreed to help the underdog by removing the barriers that prevent them from getting a job and improving their lives.

    The premise of the article is first rate, but work needs to be done to manage the bog-standard lefty scare campaign.

    Workchoices was so succeessful as people looking to improve IR naively assumed that the logic of the argument would stand by itself. The result was the Howard government was slaughtered by the lefty media peddling stupid emotive statements.

    Recall what I have been saying lately about producing one page sheets of information in simple terms to explain things like the effect of the minimum wage so that EVERYONE can understand.

    I was thinking one issue at a time and one target group at a time so the explanation is crafted to fit the specific audience.

    What needs to be done to get this produced?

    Once it is out we need writers to post it on a regular basis in the business pages, at blogs like this and on any other available channel so the scare campaign can be flushed out and responses developed. The people who bravely stand and fight in Twitter against the lefty orc hordes will keep a good argument alive once it build momentum.

  22. Token

    What actually happens is that there is a lot of ‘under the counter’ low wage casual employment for cash, no records kept and no responsibility taken. But not enough of it to really impact on the overall problem and reduce the unemployment rate.

    Do you think some of the idiots in Treasury has figured out this is a reason for a decline in tax revenues like GST?

    LOL, as if, they are too busy making mistakes in the tens of billions in revenue.

  23. Token

    I find ex-professor Leigh’s position as an ALP politician hypocritical, and I wonder if he will follow the ALP-ACTU line, or promote the removal of labour market rigidities such as minimum wages.

    He has proven to be an empty headed backbencher over the past few years, regurgitating the most repugnant viewpoint on other topics. Why would he stand his ground here?

  24. Token

    Places like Learn Liberty have had a go at explaining the complex message.

  25. Cheerful Charlie

    The minimum wage will stay until unemployment reaches 35% +

    By that time, the unions/Marxists & banking elites & their sociopathic hangers-on between them will have destroyed the economy and what’s left of our ‘civilisation’.

    After the chaos & blood in the streets recedes somewhat under martial law, the choice will be dictatorship via the long planned New World Order – or freedom of the individual and from oppressive government via libertarianism.

    Our chances of success are minimal, but we have to try.

    (all together now, ‘Happy Days Are Here Again….”)

  26. Empire Strikes Back

    Thanks David. What a refreshing change to have an MP that is prepared to talk about the elephant in the room.

    Mandated minimum wage is perhaps the most immoral and inhumane of all state interventions.

  27. Hugh

    What if a mob of Holden workers landed in the boardroom of GMH and said, “Sod the unions. We want to work under whatever pay and conditions you think will enable GMH to turn a profit and stay alive here in OZ. Can we cut a deal?”

    And the Government said “Sod the unions and the bailouts. If you guys can cut a deal with each other, then we’ll take a chainsaw to the obstructing legislation. Oh, and we’ll do the same for Toyota as well.”

    Meanwhile, back on planet earth …

  28. dragnet

    Without derogating from the gist of the post, may I observe that if one is a casual taxi-driver on a faux-contract, the hourly rate can quite likely be more like $10.00 an hour!

  29. Eyrie

    sdfc ” Industrial relations should be a state matter.”

    Industrial relations should be a matter between employer and employee.
    Don’t like the pay and conditions? Don’t take the job or leave it. You are free to find another job or start your own business.

  30. .

    sparky,

    Another problem is on costs.

    If the minimum wage is $500 per week – then as on costs in Australia can be an additional 90% of the base wage rate – then a worker may have to add $950 of value to the firm per week to be marginally employable.

    I think this, along with the absurd & obscene levels of taxation on the construction of dwellings (paid AFTER income tax for home owners/purchasers), are the two worst offenders of our tax system (on costs are largely taxes and compulsory charges) – which is riddled with massive, highly inefficient taxes, and is the greatest but most well hidden economic challenge for Austrlaia.

  31. Token

    Without derogating from the gist of the post, may I observe that if one is a casual taxi-driver on a faux-contract, the hourly rate can quite likely be more like $10.00 an hour!

    That is what Lizzie was noting as well.

    If you know students who are in the country on study visas it is likely they are being paid cash at a similar rate in some of the jobs they work.

  32. eb

    Leigh has a letter to the editor in the AFR today replying to David L.

    Sheesh, talk about predictable response.

  33. dragnet

    Lest I be misunderstood, I am supportive of the some de-regulation and flexibility in the labour market. I had to do casual tax-driving myself for some period of time during a time of financial need a few years back. Man, how I hated it and the paltry pay, but the rational part of me knew all the time that if it weren’t for that, I would have been in deep poo. I flatly refuse to darken the door of a Centrelink office!!

  34. MT Isa Miner

    Rafe

    #1108888, posted on December 13, 2013 at 8:03 am

    Recall what I have been saying lately about producing one page sheets of information in simple terms to explain things like the effect of the minimum wage so that EVERYONE can understand.

    I was thinking one issue at a time and one target group at a time so the explanation is crafted to fit the specific audience.

    You don’t talk about productivity and the GDP to unemployed youth, you talk about getting a job that pays better than the dole and gives them a chance to contribute to a team and get some skills to make them employable at a higher wage.

    Spot on, Rafe.

    This is what we need. If Abbott is trying to go slow and get most people onside we need to help out. Sure it’s his job as the government but I reckon we all need to get our backs into it because he is up against the wall with the media. Real information coming from all sides needs to get through.

  35. sparky

    Thanks for yours, Unidentified @ 9.40am.Getting away from my query a bit, but you highlight a massive problem in this country.In a couple of words, government bureacracy; I am sure there is a place at some level for checks and balances, but government workers produce absolutely nothing of value. Their wages come out of our taxes; on top of that the various government departments dealing with the public find a way to create more charges.We can’t carry this and many other goverment costs, so pass it on to the client/customer.
    All this is of concern, having a locked in minimum wage compounds the grief of the self employed.
    Again I ask – is the minimun wage legislation so sacrosanct it cannot be touched?

  36. Token

    …Man, how I hated it and the paltry pay…

    Market economies thrive by using the feeling you have to motivate people innovate.

    Socialist systems fail because they don’t.

    ‘Nuff said

  37. Struth

    Yep you only have to look at what happened to Aboriginals when the left made them get paid as they percieve “properly”
    Yhey were still going walk about half the time and the station owners could not rely on them being there all the time although they were great stockman when they were.
    So they gave them a bit of flour and sugar, and money but not proper wages. Now some may say and obviously did, that this is not good enough and insisted on the the right money being paid.
    Oops, there goes the flexibility for both sides and seeing that they still went walkabout, the station owners had to employ more reliable workers.
    Then no Aboriginal worked and sit down money is paid to this day.
    The former situation might not have been ideal but it was better than what union and government produced. It would have worked itself out better too in the long run. If only lefties would just piss off and mind their own business.

  38. wreckage

    I call it the “welfare wage”. It lets you work for your dole payments (actually up to double your welfare payments) but keep the medical cover, etc. Since this is a wage for the poor, the employer can provide a car and/or fuel, treated as a deductible charitable donation. It isn’t part of the wage structure or IR law, it’s a leg-up for people having trouble getting and staying off the dole. If you lose this “welfare wage” job you go back onto your welfare payments with a phone call. Likewise, you can take up a job with a phone call.

    Your Centrelink client number is all the employer needs. The government covers insurance at a capped level. Employment is at-will. Any Centrelink payment is eligible.

    This is modeled on the successful “work for the dole” program and Danish “flexicurity” concepts. It provides a simple path into the workforce for immigrants, the disabled, youth, and the long-term unemployed.

  39. tomix

    Iirc, casual work was paid in cash at the end of the day, the cents part was the tax. Around 1977,
    the Fraser Government started chasing tax on casual earnings hard, [possibly to pay for Whitlams
    programs] and pretty soon the party was over. If employers pay cash now and the union finds out,
    so does the ATO. IOW, unions are a de facto branch of government. And they aint going away.

  40. .

    Interesting wreckage, if combined as part of a basic income or NIT, and all wage regulation were abolished.

  41. Empire Strikes Back

    You forgot the FWA tomix, the taxpayer funded institution that performs that most vital public good: protecting union rents.

  42. It is illegal to pay someone double their dole (to work.)
    The dole also goes higher than some jobs. Imagine the bind a station hand is placed in, when he is married and has 6 kids, that he is financially far better off to sit down in town on the dole, than to hold down a job that pays the station hands award. For men with a strong work ethic and intense pride in their occupation and their abilities, who have always disparaged those who will not work, it is one helluva punch in the guts.

  43. Pyrmonter

    While I’ve no particular objection to the analysis, I do wonder whether un/under-employment we have is a demand or a supply side problem: the concurrency of controversy about 457 “skilled” visa holders and a large pool of the non-working suggests it is a labour supply issue – more to do with the welfare system’s perverse incentives than a shortage of jobs even at rates at or above the minimum wage system.

    On the visa issue – has anyone seen an ostensibly native born builder’s labourer or cab driver in Sydney in the past year?

  44. Piett

    wreckage,

    Since this is a wage for the poor, the employer can provide a car and/or fuel, treated as a deductible charitable donation.

    Hmm, I think this part is problematic — it could be heavily rorted. Otherwise, an excellent proposal! I would add maybe a couple of extra elements …

    1) A small top-up payment by the government, to provide incentive and to pay for transport (IIRC Work for the Dole had an extra $20/week or something attached).

    2) Some kind of website to post vacancies, emphasising that you could hire for one-off projects and odd jobs, and there was absolutely no legal issues for the employer if things didn’t work out, for whatever reason.

  45. On the visa issue – has anyone seen an ostensibly native born builder’s labourer or cab driver in Sydney in the past year?

    We’ve a staff of about 60 here, Eight of them Australian. This has been more or less the status quo for years.
    There is one position I’ve advertised online for the past Nine years, and there has never been an Australian respond to the ad. Not once. Not even a totally & completely unqualified one. Not One.

  46. Piett

    SATP,

    Your example doesn’t really make sense. If a guy, who’s old enough to be married and have 6 (!) kids, has “a strong work ethic and intense pride in their occupation and their abilities”, then why is he still working in an unskilled job at the award minimum?

    BTW, you were saying a while back, IIRC, that you had jobs going for which you had put up ads and got completely zero applications. Out of curiosity, did you get those jobs filled in the end?

  47. Piett

    Ah, well that answers my question! Can you tell me what the role is, in general terms, that no Aussie will apply for?

  48. wreckage

    Piett, it would need some polish from an actual policy wonk.

    Also, it is pretty common in the regions to get stuck when trying to transition from one job to another. You can be a hard worker but the local farms aren’t running sheep like they used to, and you’re a shearer. You can switch to station-hand and keep working, but the job is 60km out on bad roads. Hence it’s better for your family if you stay home. And it’s illegal for the farmer to offer you an empty house, unused car, free petrol, and $10 an hour.

    This is so commonplace in rural areas it’s closer to “typical”.

  49. Jannie

    One of the most telling examples of the effect of a minimum wage was the position of racist whites-only trade unions in South Africa during the 1960s. The white unions pushed for a minimum wage for blacks because they understood it would effectively prevent the entry of lower skilled (but potentially trainable) workers into the market, and insulate white skilled workers from potential competition. The Unions in Australia are just as cynical, but have ‘social welfare’ argument to buttress their professional propaganda.

    Leftists argue that the mandatory minimum wage protects unorganised workers from exploitation by the evil capitalists. If you point out to them that the minimum wage actually creates a structural level of unemployment, they rationalise it as the unfortunate price of protecting ‘the majority’, and demand to know how I could survive on $10 per hour. Argument sidelined, but it raises the connection between the minimum wage and dole/pension payments.

    Leftists also argue that the minimum wage is too low, because the marginal costs of moving from the dole to minimum wage employment (loss of dole/pension money, payment of tax), makes it not worthwhile and they have to actually work for what is effectively only a couple of bucks an hour increase. Well thats at least that’s half true.

    Some people make a rational choice to live a welfare lifestyle, simply because they can. Life is better on $300 per week free money, than $600 per week slogging away in an uncomfortable job. But after a generation or two its no longer a choice, it’s a norm, and then it becomes reasonable to argue that the dole/pension is too low and should be at least equal to the minimum wage.

    In the post modern fantasy it seems its impossible to ask Joe Public to make sacrifices and to expect Life to be tough until the rewards of years of hard work materialise. So far we have been able to afford the sit down money for the ‘disadvantaged’. But this will not always be the case. The demographics will make the welfare state unaffordable, whether you believe in it or not. Sadly, the young people who will have to pay the future bill, do not seem to know this yet.

    When the money runs out the compassionate visage of the ‘Soft” Left in the West will change as they make hard choices about their priorities, which are NOT green, and neither are they known for paying generous wages. The Left does not support welfare or minimum wage as a social or political objective, the Left supports welfarism as a means of destroying capitalism.

  50. .

    Actually Jannie I think it is more important to get rid of hosuing commission estates and make sure income taxes do not cut in until at least the level equal to or above the maximal benefit rate.

  51. Boambee John

    “I find it hard to believe that multinationals and Australia-wide companies would really like different IR”

    But multinationals manage with different national systems around the globe?

  52. tomix

    Imagine the bind a station hand is placed in, when he is married and has 6 kids, that he is financially far better off to sit down in town on the dole, than to hold down a job that pays the station hands award

    If Mrs. Station Hand boots him and goes on the the Pension, she’s better off again, financially. And then there’s Child Support for six kids….

  53. James B

    Anybody have an AFR subscription? Could you post the text to Leigh’s reply to Leyonhjelm’s column here?

    http://www.afr.com/p/opinion/wages_of_care_for_minimum_earners_g528FbYadqm4yAwIrCf7OO

  54. Your example doesn’t really make sense. If a guy, who’s old enough to be married and have 6 (!) kids, has “a strong work ethic and intense pride in their occupation and their abilities”, then why is he still working in an unskilled job at the award minimum?

    Being on unemployment benefits brings lots of “goodies” (for want of a better term) in addition to straight cash. (Medical, transport et al.) These things have to be paid in cash if one is working.
    On top of this, unemployment payments rise according to how many kids one is supporting.

    Thus there is a point where a family man is better off on the dole.

    Why is he working on the bottom rung of (what you term) an unskilled job? Are you serious? (Not everybody is a potential brain surgeon.)

  55. I find this fascinating, but I am not sure of the validity of Leyonhjelm’s basic premise here:

    Thousands of Australians would love to have paid work. They include those just out of school, just out of jail, age and disability support pensioners, sole parents and refugees.

    Actually I would question what percentage of these groups of people really do want paid work. I think our welfare state has existed for so long now and has funded so many people successfully to avoid work at all costs, that the work ethic has largely died across a range of social groups.

    There are families with three generations of unemployment now; three generations of welfare subsistence, and quite happy with this lot. They wouldn’t know how to work, and so therefore have no interest in it at all.

    I have read a lot of consumer-driven literature from the mental health sector- from people with a range of degrees of disablement, from very able to reasonably disabled – listing their needs and wants for a successful and happy life. I can think of only one person who has specified mainstream fulltime employment as a desirable. She now has a job, by the way.

    And then there’s the delightful little boy who told a teacher relative of mine that his family had come to Australia as refugees specifically for the ‘free money’.

  56. I will break this down further:

    those just out of school

    Gap years?
    Schoolies Week?
    21 year old, white, middle-class, bright, articulate, high school graduates who are still working at piss-ant part-time hipster jobs with no prospect of any change?
    I don’t think these represents any kind of mad drive to join the rat race.

    just out of jail

    ,

    A hard one. I worked for a while with some lads at Oxfam who were on a prison rehabilitation project. They were still prisoners but did voluntary work on a daily basis, under supervised conditions, at the Oxfam shop. They seemed to be largely of the opinion that there was more, quicker and better money to be made selling drugs.

    age and disability support pensioners,

    Some interesting results when this has been tried in the UK …

    sole parents

    A mixed bag again. There are those who are genuinely trying to hold it together, and those who are quite content to continue having children as a way of delaying the inevitable.

    and refugees.

    Free money. Where’s my TV?

  57. .

    And then there’s the delightful little boy who told a teacher relative of mine that his family had come to Australia as refugees specifically for the ‘free money’.

    I keep on saying: “Border protection” and “compassion” are both crocks.

    Stop the money and the boats will follow suit.

  58. Piett

    Philippa,

    Actually I would question what percentage of these groups of people really do want paid work. I think our welfare state has existed for so long now and has funded so many people successfully to avoid work at all costs, that the work ethic has largely died across a range of social groups.

    For some individuals, sure, but I think you’re overstating this.

    I read an article on the CIS website about a program the government had to subsidise wages for long-term unemployed (LTU), so that they could receive minimum wage while the employer paid considerably less than that. Probably not as good a solution as David’s or wreckage’s, but still better than nothing.

    The program was intended to be funded for years, but blew its budget almost immediately because so many LTU signed up for it, evidently desperate for work. A bit later they put some more money in, and the same thing happened, a rush of LTU, more than the program could cope with.

    That would suggest that the problem, in general, is not on the LTU side (as much as we all have heard anecdotes about particular individuals). It’s on the regulation of the labour market.

  59. stackja

    Australia’s minimum wage runs counter to the Australian credo of giving everyone a fair go. It is time sensible voices in the Parliament agreed to help the underdog by removing the barriers that prevent them from getting a job and improving their lives.

    In 2007 Australia voted against such a proposal.

  60. Australia’s minimum wage runs counter to the Australian credo of giving everyone a fair go. It is time sensible voices in the Parliament agreed to help the underdog by removing the barriers that prevent them from getting a job and improving their lives.

    In 2007 Australia voted against such a proposal.

    Yep! When you talk to them, those who voted against it think they’ve thus avoided a catastrophe!

  61. The program was intended to be funded for years, but blew its budget almost immediately because so many LTU signed up for it, evidently desperate for work. A bit later they put some more money in, and the same thing happened, a rush of LTU, more than the program could cope with.

    That would suggest that the problem, in general, is not on the LTU side (as much as we all have heard anecdotes about particular individuals). It’s on the regulation of the labour market.

    I wonder if that’s because individual politicians and policy drafters have also had the same type of anecdotal experience that I have – that many LTU don’t want to work, and in fact can’t work for any length of time any more.

    Is there any data available on the number of LTU who remain in work, once employed again? It would be interesting to know if they found it too hard to re-adjust and left after 6 months.

  62. hzhousewife

    Bit of a discussion about this issue from a US perspective – bit slow at the start
    and I have NOT heard the whole thing yet due to time constraints, but it was interesting
    to try to follow the logic of “young” (assuming here under 30) people in our
    affluent economies of today.

    http://www.cracked.com/podcast/what-america-cant-admit-about-millennial-generation/

  63. Jannie

    Phillipa, third generation welfare recipients have practically lost the ability to work, and may see no need to do so. But they have (learnt) a keen sense of justice, and can reason that its just not fair that some people should get paid more than others just because they choose to work.

  64. wreckage

    My solution, or a variant, gets around the bogeyman by not touching the minimum wage. Nor is there any negotiation. It’s simple, it’s straightforward, it gets people back to work without undermining wages.

  65. Andrew

    I find it hard to believe that multinationals and Australia-wide companies would really like different IR (systems)

    Why not?

    Because each different state would have a regulatory framework to hire and fire people along with all the different conditions and wage settings.

  66. Makka

    Try getting the majority of Aussies to make the right choice between job extinction and Union/ALP dogma. I remain highly skeptical.

    They will hear the siren song of low life’s like Shorten on the 7 o’clock news and in the morning shows, then turn to their bosses and say ; “Well?”…. Leaving them no choice but to retrench and re-organise just to survive. Australians by and large are so fking dumb when it comes to understanding their own economy.

  67. James B

    Yeah, it’s amazing how dumb most Australians are. It really is.

  68. wreckage

    Yup. That’s why you go for welfare reform, instead of wages reform.

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