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Unemployment rate decreased to 4.9% in April 2012; But 10,500 full-time jobs lost
Topic Started: 10 May 2012, 12:49 PM (5,198 Views)
peter fraser
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peter fraser
10 May 2012, 11:40 PM
Lefty
10 May 2012, 11:34 PM
Depends where you start your historical data though from Peter. For a long period, we managed to average around 2.5%. Additionally, there has been a long trend of increasing casualisation and part-time work, with the ABS measuring under-employment at around 12.5% at last count. Job growth is fluctuating around the zero line and the participation rate is falling, pulling down the headline unemployment rate as the pool of working age people in the labour force shrinks.

Personally, I feel that to aspire to no better than this is a rather weak aspiration. I guess I could try adopting a rosier outlook and ignoring the obvious problems.

Additionally, the near-zero jobs growth rate in conjunction with slowing growth, signs of disinflation, falling job ads and a host of other weak indicators is telling us that all is not well in the economy. Yet we are told that the mining boom - the biggest in history - is turbocharging the economy, threatening an inflationary breakout. How is it that we have near-zero jobs growth, disinflation and a sick housing market with flat to falling prices in such an allegedly turbocharged environment?


I can really only agree that it's not presently crashing Peter - I wouldn't be calling it "very good".
2.5% - when was that lefty?

When I studied for my bronze medal in swimming I distinctly remember the opinion that anything better than 7% was not too bad.

Try this graph graph

adjust the time frame to January 1978 to May 2012.

You will see that the last decade is extraordinary in terms of employment.

I hear what you are saying about the change in employment towards more casual, part time, and contractors, but still the current rate is good. Compare it to our other recessions in 1983 and 1993.

Big difference.

Any expressed market opinion is my own and is not to be taken as financial advice
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Strindberg
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Lefty
10 May 2012, 11:34 PM
Depends where you start your historical data though from Peter. For a long period, we managed to average around 2.5%.
Who were "we"?

Lefty - you're seriously detached from reality. RBA table G7 goes back 34 years to 1978. the only period when the unemployment rates were lower than now was 2006-2008. At all other times in the last 34 years the unemployment rate was higher.

Sure, 60 years ago in the 1950s, when there was fuckall welfare and a one limbed eunuch was expected to work, the unemployment rate might have been 2.5%. What sodding relevance does that have? 80 years ago in the 1930s the unemployment rate was 30%.

We are living in bloody exceptional good times. Imagining the past was better is reconstructualist doom and gloom crap invented by doom and gloom conspiracy internet sites to extract advertising dosh from young tossers* who imagine they are entitled to a cushy life in the deluded belief that their forebears had it easier.

*fed by eg MB
Edited by Strindberg, 11 May 2012, 12:12 AM.
Housing costs to Income broadly unchanged since 1994 - re-ratified here
The People of Australia have the highest median wealth in the World
2002-2012 10 year house price growth the SLOWEST since 1952-1962
"There are two kinds of people in this world: ones that fiddle around wondering whether a thing's right or wrong and guys like us." (Hugo to Gagin in Ride the Pink Horse)
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peter fraser
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Strindberg
11 May 2012, 12:04 AM
Lefty
10 May 2012, 11:34 PM
Depends where you start your historical data though from Peter. For a long period, we managed to average around 2.5%.
Who were "we"?

Lefty - you're seriously detached from reality. RBA table G7 goes back 34 years to 1978. the only period when the unemployment rates were lower than now was 2006-2008. At all other times in the last 34 years the unemployment rate was higher.

Sure, 60 years ago in the 1950s, when there was fuckall welfare and a one limbed eunuch was expected to work, the unemployment rate might have been 2.5%. What sodding relevance does that have? 80 years ago in the 1930s the unemployment rate was 30%.

We are living in bloody exceptional good times. Imagining the past was better is reconstructualist doom and gloom crap invented by doom and gloom conspiracy internet sites to extract advertising dosh from young tossers* who imagine they are entitled to a cushy life in the deluded belief that their forebears had it easier.

*fed by eg MB
I don't know what the unemployment rates were in the fifties - they did have a recession so I doubt that it was anywhere as low as 2.5%, and I think that there was a credit driven recession in 1961, another recession in 1973/4 or thereabouts.

The inflation rates and interest rates were hideous in the late seventies through to the nineties. The rate of business failures is directly proportional to interest rates, or perhaps the cost of servicing debt.

That same graph that I linked above will give you all of that info and more if you look - it's a great site for info.

Seriously lefty I don't think t's possible to go much lower than 4% - not everyone wants a job, and there will always be people in between jobs, it just can't drop to zero.

Edit - of course if you go back to the decades before the fifties, the world saw a severe depression, and a world war, so employment numbers then would be either terrible, or skewed by the demand for military personnal, so for the last 80 years or so, the last decade has given us the best employment numbers for a long time.

Edited by peter fraser, 11 May 2012, 12:30 AM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Strindberg
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peter fraser
11 May 2012, 12:23 AM
I don't know what the unemployment rates were in the fifties - they did have a recession so I doubt that it was anywhere as low as 2.5%, and I think that there was a credit driven recession in 1961, another recession in 1973/4 or thereabouts.

The inflation rates and interest rates were hideous in the late seventies through to the nineties. The rate of business failures is directly proportional to interest rates, or perhaps the cost of servicing debt.

That same graph that I linked above will give you all of that info and more if you look - it's a great site for info.

Seriously lefty I don't think t's possible to go much lower than 4% - not everyone wants a job, and there will always be people in between jobs, it just can't drop to zero.

Edit - of course if you go back to the decades before the fifties, the world saw a severe depression, and a world war, so employment numbers then would be either terrible, or skewed by the demand for military personnal, so for the last 80 years or so, the last decade has given us the best employment numbers for a long time.
Peter - I don't know about Australia, but the unemployment rate in the UK in the 1950s really was around 2-3%. No welfare and a 5 and a half day basic working week. Many people worked their day job plus night work like taxi driving or cleaning to scrape a living. The good old days.
Housing costs to Income broadly unchanged since 1994 - re-ratified here
The People of Australia have the highest median wealth in the World
2002-2012 10 year house price growth the SLOWEST since 1952-1962
"There are two kinds of people in this world: ones that fiddle around wondering whether a thing's right or wrong and guys like us." (Hugo to Gagin in Ride the Pink Horse)
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peter fraser
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Strindberg
11 May 2012, 12:37 AM
peter fraser
11 May 2012, 12:23 AM
I don't know what the unemployment rates were in the fifties - they did have a recession so I doubt that it was anywhere as low as 2.5%, and I think that there was a credit driven recession in 1961, another recession in 1973/4 or thereabouts.

The inflation rates and interest rates were hideous in the late seventies through to the nineties. The rate of business failures is directly proportional to interest rates, or perhaps the cost of servicing debt.

That same graph that I linked above will give you all of that info and more if you look - it's a great site for info.

Seriously lefty I don't think t's possible to go much lower than 4% - not everyone wants a job, and there will always be people in between jobs, it just can't drop to zero.

Edit - of course if you go back to the decades before the fifties, the world saw a severe depression, and a world war, so employment numbers then would be either terrible, or skewed by the demand for military personnal, so for the last 80 years or so, the last decade has given us the best employment numbers for a long time.
Peter - I don't know about Australia, but the unemployment rate in the UK in the 1950s really was around 2-3%. No welfare and a 5 and a half day basic working week. Many people worked their day job plus night work like taxi driving or cleaning to scrape a living. The good old days.
I don't have any information on the fifties - this graph will go back to 1971 when unemployment was below 4%.graph

But seriously post war in the UK they still had food rationing for some years, petrol rationing, credit was hard to get - didn't the UK almost default in about 1960 for a very small sum of money that the USA eventually lent to them.

I haven't read all of this link that I found, but the BBC is usually pretty high quality
LINK to UK History post war.

Britain never has recovered from WW2 and losing her colonies.

Any expressed market opinion is my own and is not to be taken as financial advice
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Lefty
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Peter, Australia enjoyed near true full employment (which is around 2%, with the remainder mostly representing workers moving between jobs on the day of the survey) for many years following WW2 because full employment was a policy goal. The approach was abandoned in the 1970's when moneterism began replacing Keynesianism.

I doubt it was as dire as Strindberg portrays and demonstrates that while there will always be a few whose only ambition is to lie around smoking dope all day, government by and large chooses the unemployment rate. Most unemployment can be eliminated if we so desire. That said, I realise that there are vested interests who would rather see a reserve army of unemployed since this places downward pressure on the growth potential of wages and conditions, at least in the lower part of the labour market. Menzies alluded to it in his "forgotten people" speech :"the situation becomes radically altered when the worker can say 'if you will not employ me, someone else will'" (quoting from memory only). Menzies wanted to remove full employment to break the rising power of organised labour but with the memory of the appalling unemployment rates of the great depression still relatively fresh in the public's mind, he simply wasn't game to attack something that the public now expected to have ie - the ability to find work.

There is a great deal of historical literature on this subject, and I do have some of the resources buried away but I haven't time to digging right now. If you are interested in the history of the implementation of full employment in Australia and it's subsequent abandonment (after which unemployment has never returned to those very low levels), then the Centre of Full Employment and Equity is pobably a good place to start My Webpage
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Frank Castle
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Business As Usual

Lefty
10 May 2012, 11:34 PM
Depends where you start your historical data though from Peter. For a long period, we managed to average around 2.5%.
Where?

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Lefty
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Frank Castle
11 May 2012, 09:16 AM
Lefty
10 May 2012, 11:34 PM
Depends where you start your historical data though from Peter. For a long period, we managed to average around 2.5%.
Where?

Posted Image
I can't veiw your image Frank - these computers block all sorts of things for the most ridiculous reasons.

How far back have you gone? You need to go back before 1975 roughly before the rate dips significantly below where we are now.
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stinkbug
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I strongly suspect the govt wants to decrease unemployment, but is also concerned about wages growth leading to higher than desirable inflation. I'd say there's a longer term concern about keeping interest rates at sensible levels (ie a little higher than now), so there's several elements to the balancing act.

Things are far from perfect right now (especially for small businesses), but it's not as bad as it could be. I'd say we'll be muddling through for at least another couple of years, barring major events.
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While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Lefty
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Stinkbug, if you visit the link in my post just above Frank's, you will find a proposal for dealing with that - the job gaurantee. Basically, the government offers a job to anyone who wants one, with the wage and conditions being set at - and only at - the minimum allowable by law. This gives employment to those whom the labour market has rejected when it does not desire to utilise all willing and available labour (which is most of the time). The programme expands during downturns to absorb workers made redundant. When conditions turn around, employers can bid workers out of the programme by offering better wages than those payed under the programme (which is set at the minimum to minimise the risk of inflation).

It would be mainly of benefit to the low-skilled, for whom the impact of economic downturns falls most heavily upon.

The alternative to bringing these workers into the public sector, paying them a basic wage to do something, is to keep doing what we do now - bring them into the public sector and pay them a poverty-level allowance to do nothing.

It isn't intended to be a panacea, but I believe it would be greatly superior to what we have now in terms of social outcomes. Again, there are vested interests who will stridently oppose it because having a permanent pool of unemployed with whom they can threaten to send employees who fail to "toe the line" is a postion of power.
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