Our economy is a unique combination of the pre and post-modern, with no modern in between. We earn commodity income like cave men trading stones then borrow against it in offshore markets using hyper-real credit instruments, and tip that debt into houses. This asset inflation underpins the entire services and consumption economy, which barely exports anything and has terrible productivity and so can’t raise its own income. The kicker is that because commodity exports are capital not labour intensive, it is only through the second step of leveraging and asset inflation that domestic economic activity is produced.
It was not always thus. We used to have a much higher component of modern industries that were more labour intensive, tradable sectors that generated domestic economic activity and productivity growth without the need for debt. But after years of double Dutch disease and a radical over-concentration of ownership in all sectors, these are largely gone and in their place the credit and housing bubble has become the domestic economy.
But all this media posturing and opining ignored a couple of salient points — the most important being that July’s fall was the fourth monthly fall in new jobs in the past year — and the smallest. There were around 5300 jobs lost in July 2013 (and a further 8600 in August of that year). Other down months were December 2013, with around 24,400 lost and May this year, with 4800 jobs lost.
In fact, the 300 jobs estimated to have been lost was the smallest loss since the start of 2011 — out of a total of 14 months of job losses (in the 42 months, or a third). It is in fact possible the 300 lost jobs will be revised away in coming months (or increased). These are estimates, not hard and fast figures.
I hate to say it, but the spectacular events that hit the headlines aren’t necessarily the things most worth worrying about. The big news on the economy this week was the spectacular jump in the unemployment rate from 6 per cent to 6.4 per just during July. Not a big worry.
Question is, what does it prove? That the economy fell into a hole around the middle of the year? Doubt it. There’s little other evidence that it did and a lot that it didn’t.
That the slow upward creep in unemployment we’ve been seeing for about two years may have accelerated? Doubt that, too. Again, the other economic indicators aren’t pointing that way.
Australian politicians have embraced and run with the concept of a ‘Big Australia’, with population growth driving the economy since the onset of the global financial crisis. But with immigration crowding our Australian employment — and our federal government slashing welfare — is it time that we rethink our approach to immigration?
Australia’s immigration debate focuses mainly on the persecution of a remarkably small number of asylum-seekers. But there is mounting evidence that immigration by plane is posing a more pressing problem for both the Australian authorities and our domestic economy.
…According to research by Dr Bob Birrell and Dr Ernest Healy, from Monash University, 380,000 recently arrived migrants have found jobs in Australia since 2011. By comparison, net job growth in Australia over that time was just 400,000 — immigration has accounted for around 95 per cent of employment growth.
High levels of immigration have crowded out opportunities for Australian-born and overseas-born residents who arrived before 2011. The hardest hit have been younger people seeking entry-level positions and new graduates. The unemployment rate among people aged 15-24 years has climbed to its highest level since 1998.
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