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February 2005 | |
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Economics: Super Seduction Interview: Bono and Me Unions: The Eight Hour Day and the Holy Spirit Economics: OEC-Who? Technology: From Widgets to Digits Education: Dumb and Dumber Health: No Place for the Young History: The Work-In That Changed a Nation Review: Dare to Win Poetry: Labor's Dreaming
Politics The Soapbox Postcard The Locker Room Parliament
Polar Shifts
 Nelson's Double StandardMorals Beat Hasty RetreatUncounted Cost Of AsbestosVoting Farce ExpandsI Beg To DifferPolitics Smolitics
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Economics OEC-Who?
The government hired the OECD to further push its barrow of neo-liberal reforms recently. What is the OECD anyway? And how do they come be the font of wisdom on all things economic? Neo-liberal principles would see the 2000 staff of lawyers, economists and scientists, amongst others, in 200 committees, as needing to be pruned. After all, how do they measure their productivity? If it is by the quality of the research and advice on getting your market economy right, then it has been a failure all round, simply because there are constant economic crises around the world that such market technocrats are supposedly giving advice to prevent. The advice on improving national economies by a commitment to the market is given from a budget of 300 million Euros per year (around $600 m!!). The money comes from member countries, as does the staff, so it is hardly likely that the OECD is going to be a source of fiercely independent advice. It claims that its work is increasingly cross-disciplinary, but that doesn't mean the left hand knows what the right is doing. A comparison of what its annual Employment Outlook says about the Australian labour market with what is Country Report published last week shows how it acts according to the whim of its member governments policies when required, for a headline, whilst some decent analysis and policy detail garnered from its own look at the stats is buried. The Employment outlook is at pains to point out the impact of vocational education and training on the wage level - it puts it up - whilst the Country report urges the lowering of the minimum wage. Why lower the level for the lowest paid, instead of providing more pre and post employment training. Chapter Four of the Employment Outlook 2004 know, from looking at real statistical evidence, that training helps. The authors of the Country report clearly were not at the meeting that discussed that. It has also published some interesting material in other reports on work-family, labour market and welfare system integration and poverty reduction. Did Peter Costello or Stephen Smith/Wayne Swan bring these to our attention? No they just pushed their barrows in the other direction, the only difference in their approaches was the size of the cake the employers and wealthy need, although there was agreement that they need more. John Quiggin comments that he "normally ignore OECD reports on the Australian economy, since they are in essence, a Paris republication of the Australian Treasury policy line of the day. The OECD is largely staffed by officials from national treasury departments on temporary postings, and its primary source in consultations is the Treasury". Terry Lane in The Age on Sunday noted one bloggers description that OECD reports "are normally not independent (as they appear to be) but written on information provided by, "are normally not independent (as they appear to be) but written on information provided by, often even the spin of report provided by, the relevant domestic government department. Thus they are usually PR praise for policy that is being implemented or stalking horses for policy (that) government would like to implement but is finding politically difficult".(Terry Lane Age 6-2-05). So all such reports really need to come packaged with a health warning, or at the least, a reminder that they are not independent thoughts. All the usual stuff was there. The OECD claims that labour markets will functions more effectively by: promoting the negotiation of wages and employment conditions at the enterprise and individual levels; removing disincentives to hiring, especially of low skilled workers; enhancing human capital by improving training and education; and creating stronger incentives to participate". So the small number of workers who are earning only the safety net wage are having such a dramatic impact on the employer that they are holding the economy back. Cleaners and hotel staff are the reasons your kids can't get work?? Give us a break. Two thirds of workers are on either enterprise agreements, individua contracts or are "own account" workers (self employed contractors). How does the safety net impact on their earnings? How does unfair dismissal law effect the 28% of people who are casual or self-employed? Some would say that for the OECD to claim that the very small group of people who depend o the safety net are a barrier to increased participation would imply that many are determined to be cleaners as their career path. So they won't need training, education and multi-skilling to improve human capital, which the OECD claims is also a necessary policy priority for the government. There is no mention in the OECD report, which laments the high safety net as a disincentive to employ, that working hours per year per person in Australia are the highest in the world at 1855 hours (in 2000). The mean here is 1643. Vocational education and training are certainly important, according to workers and employers in manufacturing. The OECD urges more investment here. However the government, which has let its employees from Treasury go to temporary positions at the OECD (the Paris option someone once said) forgot to say that the new apprenticeship schemes and the cutback sin funding from government to education at all levels are not much help in getting workers to gain the skills they need to get higher wages and increase participation. As the report thinks the safety net is a problem I guess they don't really care about skills anyway. At the same time it urges further deregulation of the fee system in higher education. This at a time when government expenditure on education and training is declining. If we look at international comparisons, our youth unemployment rate has been near the top of the table (ie highest level of unemployment) since 1980. On all countries, the unemployment rate amongst he tertiary educated is far better than amongst those with less than senior secondary education. However Australia still rates above the mean, according to Ross Gittens and Rodney Tiffen in How Australia Compares (Cambridge UP, 2004) The OECD urges the freeing up the university system to allow more control over fees at the institutions. Government share of expenditure on education sees Australia well below the mean (Australian governments provide 76% of total eduction expenditure, compared to the mean of 88%). How does the OECD recommendation of freeing up tertiary fees help here? The trend has seen government expenditure on education as a share of GDP fall from 6.2% in 1975 to 4.6% in 2000. The other thing they lime to worry about (as per the Federal Treasury's intergenerational obsession, is the ageing population and the heath system. Here we see another approach to the attack on Medicare, one of the most equitable and cost efficient health systems in the world. The report argues for more private funding of health (ie more private insurance for you and me) and for ways to increase the labour force participation after the age of 65. The ageing cleaners are needed (my Mum and Dad did this well past 65 by the way) as are other skilled older workers. Fair enough. However to complain about the ageing population and then say you need them to work seems odd. Gittens and Tiffen, among others, have pointed out the scare tactics of intergenerational reports. The figures they use are based on the assumption that those over 65 are not working. - Many are still very healthy and active past 65, particularly as the fact of living longer also means people are "younger". - The dependency figures also make the mistake at the other end. There are fewer young people dependent on those of working age too. - Ignores the trend of productivity improvement through work and technology - Ignores the increasing participation rate of those who are of working age, in particular women Again they complain about one of the governments favourte subjects -Unfair dismissal protection. The OECD argues for the reduction in this as a means to encourage small business to employ. On the difficulty of dismissal scale drawn up by Gittens and Tiffen, Australia rates at 1.5, with the mean at 2.6. Our procedural stringency is 0.5, with The Netherlands at the top with 5.0. The government claims that removing unfair dismissal protection is necessary for it to be the friend of the small business battler. As put it: If you're angling to be a successful small business person in this vibrant enterprise culture think again. The landscape is dominated by ravenous corporate capital for as far as the eye can see. Retailing; unless you have a niche location and/or a niche product, forget it. Supplying to corporate retailer; forget it. Tenancy to a corporate landlord, forget it. Finance from a major bank; read the small print (nb the standard inclusion in an overdraft facility: 'the Bank may cancel the facility at any time whether or not you are in breach of this agreement'). Franchising? possible, but unaccountable franchisors still menace the unsuspecting franchisee. Unemployment is a concern for many who cannot get enough work, although the government keeps claiming that people want the flexibility of casual employment. The OECD urges more freedom in this area. As we have over 28% in some form of temporary employment, the highest levels I the OECD, I'd say we haven't much to live up to here. On official unemployment statistics, which the government claims bragging rights on, international comparisons put Australia in a position where we are having a falling level on unemployment and are now below the OECD average rate. We are now below the US level. What more do they want except to reduce wages. Labour productivity levels show that wages as a factor in business are becoming smaller as our productivity has increased along with the hours of work. Do I see a connection here?. You bet. We have more and more unpaid overtime and more own account workers who have to fulfil contracts no matter how many hours they take. Australia has turned in the best productivity performance (average annual increase 1996-2000 2.5%. A more interesting productivity indicator is multifactor productivity (MFP). This is an attempt to measure technological advance. Ireland, where the government has removed tertiary fees and actively engages in the knowledge economy, is well out in front. MFP in Ireland ran at 3.72% annually from 1990-2000. Australia at 1.68%. So investment in the knowledge economy by the government is decreasing, as a percentage of investment in eduction. Employers and employees have been taking up some of the slack in terms of skills and other workplace oriented training. The federal government and its cipher the OECD do not address these issues in their report that is basically an attempt to further close the circle o Australians as the seek to impose the outdated mantra of There Is No Alternative. There is, and the government is I the position to the lead by investing in job flexibility, family life, income security, training and education. They have their OECD report that shows exactly what not to do. A read of the OECD Employment Outlook 2004, and other publications from the myriad OECD QUANGOs, would be a great way for the government and its ALP allies to open their eyes and see that alternatives are out there in place and working nicely thank you.
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