JobSeeker and JobActive are meant to move people off welfare and into work, but COVID-19 has changed things – ABC News

The privatisation of the employment system is one of the classic examples of failure.

Private employment agencies work well as an opt-in system – you want a job, you go to an agency to help find you one, and if you’re one of the lucky ones, they get you one. It works well for people who are “highly employable”. This system is how I’ve found nearly every job I’ve had, for example.

But it doesn’t work for a lot of people. If you are not “highly employable” – that is, if you don’t have any particularly in-demand skills, and are applying for so-called ‘unskilled labour’ jobs – the private system is full of holes. In particular, they have no incentive to do a lot of work to find candidates a job. They have incentive to do some work – they get paid – but there is no penalty for not finding a job. It’s built on an underlying assumption of “full employment” – that there is a job available for anyone who wants one, and thus the only reason for not finding a job is due to some failure on the part of the job seeker.

The thing is – that’s just not the case. Well before this so-called “COVID recession”, we were experiencing the “jobless recovery” from the GFC (which, BTW, we never recovered from). Headline unemployment was “low” at ~5% give-or-take – which is the goal that the Coalition. They don’t want unemployment really low, because it puts pressure on wages, and they see the ultra-low wage growth of the last few years as a good thing. But there were still plenty more applicants than jobs – about 8 in most cities, up to 30 in rural area or amongst youths. It was quite possible to be an active job seeker, willing to take on any reasonable job, and not be able to find work – the jobs weren’t there.

The private employment services responded to this the way any for-profit business would: they placed people to jobs if the jobs were available, and that was it. Yes, they would try and find more employers – but it wasn’t looking for a job for you. You’d just go into the bucket (or, if you were lucky, into a queue), and if your name was drawn out, you’d be sent off for an interview (again, one of many for the job), and then you’d roll the dice to see if you got that job. If you didn’t, back in the bucket you went.

Furthermore, once you’ve gone through that process a few times, you’re now costing the service provider more than they will make from you. So you get moved from the bucket of “employable types” and over to the bucket of “unemployable types”. You won’t get as many interviews, and even when you’re sent on the, the employer knows that you’re in the unemployable bucket, and you’ll get a pro-forma interview and circular filed afterwards. There’s just no incentive to find work for people who, through bad luck, end up in this category.

The simple fact is that there is no penalty for employment agencies to fail to find work for their clients.

The Centerlink system of the 80s and 90s had problems; a centralised system for all unemployed people to go through was inefficient. But it did have a goal on reducing the number of long-term unemployed – a goal that is given lip-service at best these days.

Like many situations where a government service has been outsourced, the failure mode is that the easy, profitable cases are being well-serve, and the loss-making ones are being discarded. But these are people’s lives and livelihoods being discarded.

However, while the myth that anyone who wants a job can get a job remains prevalent, this will continue.

Source: JobSeeker and JobActive are meant to move people off welfare and into work, but COVID-19 has changed things – ABC News

Leveraged Buyouts – what a crock

When you borrow money to buy something, it’s not uncommon for the thing you bought to be used as collateral for the loan. The obvious example is a house mortgage – you borrow money, the house is the security. This makes the act of borrowing itself reasonably risk free: if the purchase falls through, the loan is dissolved and all you’re out is some administrative fees. Your real risk starts when the purchase is successful.

TL;DR – Borrowing money to buy a house is to leveraged buyouts as a pat on the cheek is to a punch to the testicles; same general act, very different implications.

Continue reading “Leveraged Buyouts – what a crock”

Warning: get off housing gravy train – ABC News (Australian Broadcasting Corporation)

There’s an opinion page on the ABC News page about the increasing rise in house prices (and the subsequent fall in housing affordability). The solution presented: build more housing (not necessarily houses – apartments are okay too), thus increasing the supply. Unfortunately, that won’t help.
Continue reading “Warning: get off housing gravy train – ABC News (Australian Broadcasting Corporation)”

Wage growth does not automatically equate to inflationary pressure…

One of my coworkers tossed out this line today: “We can’t just increase the minimum wage, because that would cause inflation”. I said at the time that didn’t have to be the case, and I just thought I’d capture my reasoning in writing.
Continue reading “Wage growth does not automatically equate to inflationary pressure…”

IMS Australia – first thoughts

Well, it’s about time, but Apple have finally rolled out the iTunes Music Store to Australia. Now I can see what all the fuss is about.

I can see that I am impressed with how easy it is – I’ll have to make a point to not impulse buy, because it’s just so easy to do. The integration with iTunes is so smooth as to be unbelievable – it is very easy to see that this is why they make iTunes and why it’s free. (Heck, the only reason I run Windows on my home PC instead of Linux is to use iTunes)

Continue reading “IMS Australia – first thoughts”

My blog is worth that much?

From Jason Yip:

My blog is worth $20,887.98.
How much is your blog worth?

And if anyone wants to buy it at that price (that’s US currency, of course), please feel free to let me know. Contact me before the end of 2005, and I’ll even through in a 10% discount… afterwards, of course, the price may be even higher, as I’m always making new value on the site.

Serious offers only, naturally. No tire kickers.

More on income diversity

An off-hand statement in the editorial of The Australian today went like this:

Even after the threshold changes in the May budget, the top 5 per cent of taxpayers are going to be paying a quarter of Australia’s net income tax

(Look in the section about Peter Costello)
Continue reading “More on income diversity”