« Monday message board | Home | Triangular trade »
Clean Start - Fair Deal for Cleaners Campaign
By jquiggin | April 10, 2006
With lots of legal protections for workers gone, and an openly hostile government, new strategies and organising methods are needed. Cleaners face particular difficulties working in isolated conditions and prone to all kinds of exploitation, especially as so many organisations have sacked their cleaning staff and replaced them with contractors. The Liquor Hospitality and Miscellaneous Union international campaign to improve working conditions for cleaners. You can read more about the Clean Start campaign here.
.
Topics: Oz Politics |
April 11th, 2006 at 11:49 am
A month of unpaid training, as the link indicates one cleaner experienced, seem terribly excessive. Do Australians taking these jobs experience the same month of unpaid training or is it because the cleaner was coming from outside the country?
This may not be uncommon in Australia. I found this link
http://mycareer.com.au/jobs/sydney/hospitality-travel-tourism/other-hospitality-travel-tourism/3942432+trainee+dealer.aspx
to a job (no longer open) for casino dealers, demanding 3 weeks of unpaid training
Trainee Dealer*-
Star City is currently on seeking motivated customer service orientated individuals to join our gaming department. The process will involve you completing a three week unpaid training school”
It mentions that there is “no charge” for the training (I should hope not!) and you do get free meals, still, this 3 weeks seems excessive too.
April 11th, 2006 at 12:32 pm
It’s a shame they can’t find a more evocative name. I thought the American “Justice for Janitors” campaign had a nice ring about it. But I don’t think “janitor” is a word we really use.
April 11th, 2006 at 2:13 pm
This is the future. They have taken away every institution and safeguard standing betwen people and the free market in labour. Now those wide eyed ideologues can contemplate at their leisure the difference between men and women and widgets. This and other campaigns will transform not just the labour movement, but will rock the whole edifice to its foundations.
April 11th, 2006 at 2:48 pm
It is good to see a union actually starting to concentrate on their members rather than training ALP politicians, holding rock concerts and centralised wage fixing. This is (IMHO) the way unions should be going - rather than paying expensive lawyers to front up to the arbitration commission and then sitting back and enjoying the union dues.
This sort of action, making them relevant again, may actually save the unions from the extinction through irrelevance to which they were heading.
Can they turn themselves around? We will see. Either way, it is another good point from these reforms.
April 11th, 2006 at 4:41 pm
Andrew Reynolds, you are being dishonest. Union organsiers are usually flat out dealing with member issues, working on collective agreements and so on. Can you identity these individuals who actually sit back and literally do nothing?
I understand that in America janitors have resorted to sabotage to try to get fair treatment, eg glueing down toilet seats. Good on ‘em.
April 11th, 2006 at 5:03 pm
Steve,
So that is why union membership is dropping - unions are currently relevant to people’s lives and the organisers are hardworking. Silly me.
April 11th, 2006 at 5:48 pm
AR. Au contraire, this article suggests that union membership is now on the rise. Maybe, people are finally realising that the “free ride” that non-union members have enjoyed for so long has come to an end.
http://www3.griffith.edu.au/03/ertiki/tiki-read_article.php?articleId=2381
April 11th, 2006 at 6:08 pm
I had an experience where I noticed that rooms in a business I know about were getting filthy dirty. This was after the cleaning service had been outsourced. So I checked on the contract for the cleaning straff. They were basically given about 1.5 minutes to clean quite large, individual offices which just wasn’t enough.
Observations: The business recorded cost savings from the outsourcing as measured money costs did fall. Room cleanliness declined, cleaner dissatisfaction rose and staff cleaned their own rooms. This has lessons on the case for outsourcing and for effectively concealing a reduction in service quality within a foolish contract.
April 11th, 2006 at 7:54 pm
This “international campaign’, is this another example of the dreaded globalisation?
April 11th, 2006 at 8:02 pm
I agree with AR on the issue of sitting back and enjoying the dues, however from past experience it seems that only well paid advice will get you out trouble when forced to deal with numerous unfair dismissals and frivolous EA disputes taken (by the employer) in front of the commissioner. In the 7 years i worked down the wharf, I cant recall the workers ever issueing proceedings against the employer (except in the case of unfair dismissals).
As for naming lazy and incompetent union officials the list would indeed be long, but I think i will hide behind the defence of being uncertain about the new dafamation legislation in failing to do so
April 11th, 2006 at 8:59 pm
Avaroo, all “unpaid training” or other such schemes are quite illegal no matter where the worker was born. If you do work you should get paid for it.
If you encounter anyone who’s been forced to work for nothing, tell them to contact their union, who can attempt to get back their unpaid wages.
April 11th, 2006 at 9:27 pm
Neophyte,
That is my point. At no point during the long period where centralised wage bargaining was strong was the union movement growing in any substantial way. Start removing that and unions actually have to do something and then they start growing again. It is not rocket science. I am not an opponent of unions per se, but the unions that go around screaming for government assistance to do the job they should be doing end up where they should be; irrelevant husks, incapable of helping anyone.
Get back to the knitting: help the members. Work with the companies - don’t fight them. Help grow the companies and industries that your members are in. If the industry is in decline due to factors beyond your control, don’t run to government pleading for help - help the members to retrain and move jobs or locations to where the jobs are.
It is hard work - but that is what the union members are (normally) doing.
April 11th, 2006 at 10:06 pm
If people are paid to clean toilets and instead they spend their time glueing them down, then how is this worthy behaviour? Should we all start glueing down public toilet seats as a show of solidarity? Maybe we could also p!ss in the sink and sh!t on the floor to show them that we really care.
April 11th, 2006 at 10:32 pm
I don’t quite see the problem with the trainee dealers.
If the local TAFE offered a three-week, industry-accredited Certificate IV in Gaming Studies, would you expect the TAFE to pay the students, or the students to pay the TAFE?
If the trainees are sitting in a mock-up casino, dealing cards &c, to other trainees, they are not earning any money for the casino.
It’s not the same as “trainee housemaids” whose cleaning and making up rooms repaces paid workers.
April 11th, 2006 at 11:56 pm
I was a cleaner covered by the LHMWU in the mid 1990s (I used to clean UQ, actually). We used to net about $150 per fortnight, of which the union took $12. We were all postgraduate students, and thought that if the union wanted our membership that they could at least provide us with the name of our shop steward, or give us a contact point in case of a dispute. Despite numerous approaches, the union refused to even tell us who represented us. When we all tried to resign from the union the company told us that it was not possible to resign, or they would lose their contracts. So some of us quit in disgust (yes, I was an economics student after all). I should note that many of my cleaner colleagues were poor asian and african students barely feeding their families - I was only working for beer money really. And this was real cleaner work - toilets, kitchens, filthy lecture theatres, labs etc. Maybe even the office that JQ occupies now.
LHMWU cares about cleaners ? Only becuase they are staring down the barrel at their own oblivion down an S-bend of their making. The LHMWU turned me off labor for ever.
Unions can be relevant, but that have to start looking after their members, big and small. The sort of bureaucratic edifice that can take $12 out of a $150 pay packet while puporting to look after workers rights is finished - a lean flexible operation might however suceed.
April 12th, 2006 at 1:14 am
AR, Rog & Nob, etc…
Let’s globalise minimum wages, human rights and actual “real” democracy (not the BS Dubya version), and then we can talk about globalisation. Ok?
April 12th, 2006 at 1:39 am
Yes, that is a bad story Jimmythespiv. There are shonky politicians, shonky businesses and shonky unionists. Such is life.
What I despise is non-union members who get to enjoy the fruits of a union’s collective bargaining without paying their dues. These people are scabs and their should be appropriate regulations to deal with it. For example the union should be able to collect a bargaining agent’s fee.
p.s. if I worked for you Terge I would gladly glue your Finnish ass to your seat!!
April 12th, 2006 at 1:48 am
jimmythehack
Pleeeeease, the name is LHMU, so at least get that right. For your information I have also worked in similar shitty jobs, cleaning toilets, offices etc. Normally if your wages are as small as you say… you can pay p/t, junior, or discounted fees instead. Some unions even waive it or make it a “nominal” sum or a “solidarity” fee, eg: $30 per yr, etc.
Next, unlike the organisation that’s currently feeding you crap or even paying you (Young or Old Libs? AiG?, Chamber of Comm? etc.) the actual workers get to vote for their own representative: and it’s called a delegate. If for example, an ALP hack is trying to push a candidate or avoid the ellection it’s actually up to the workers affected to get involved and refuse it. If you are so inclined, you can put your hand up and become a delegate yourself… by running in the election.
If you can’t be bothered, then don’t whinge!
Next, the role of an effective union is to get out of the way and empower their actual members. Sure, some also lobby gov’s, try to influence their industry, OH&S standards, etc.
Since then I’ve further learned that a real effective union is not some hack in an office with some lawyers and Alp backing, but a united group of workers working hard for themselves in their joint interests. YOU are the union, and the workers make the decisions themselves.
But like S Munn says, there’s all kind of dodgy things in life. But just because your footy team’s shitty doesn’t mean that all football is shitty. Just join a better team, or even better: help your own team improve! and you will see how you learn to appreciate the beautiful game.
April 12th, 2006 at 3:34 am
“Avaroo, all “unpaid trainingâ€? or other such schemes are quite illegal no matter where the worker was born. ”
Then this really isn’t a union issue. If it’s illegal, it’s illegal. All anyone should do, if asked to do something illegal is report it to the authorities.
Unions unfortunately, wind up exploiting many of their members, no less than employers have in the past and may still do. Anyone glueing down a toilet seat that does not belong to them should be arrested and charged with damaging someone else’s property, no different than if they ran their car into your building on purpose.
April 12th, 2006 at 6:01 am
Carlos
Settle down and remember the coarse language rule. Also I acknowledge that this was 10 years ago, and things may well have changed (i hope so). But the fact remains that we rang LHMU because there was no union rep on site - and head office could not and would not provide contact details. I guess they were all working on more important things, like how to lower real wages over the life of the various Accords while still guaranteeing poor employment outcomes. There was certainly no evidence of a delegate.
Agree with you on what you put in is what you get out - which was my point all along. But then there was no way to contribute, other than financially. And you couldn’t go start your own union either.
As for allegations of who is paying me, nobody is, which is why the ALP has a political problem. It’s largely unionist membership (can’t be a member unless your a union member, remember) can’t conceive of why you would be critical of unions unless you are a liberal stooge. Could it be that they weren’t doing their job for the majority of their members. I ‘m at pains here to exempt those OH&S functions that CFMEU etc do so well.
Te mando un abrazo
April 12th, 2006 at 9:20 am
Steve Munn,
QUOTE: p.s. if I worked for you Terge I would gladly glue your Finnish ass to your seat!!
RESPONSE: What a lovely offer. Firstly I am not Finnish. Secondly you can’t spell my name (there is no “G” in Terje). Thirdly you would not get the job if personal abuse, property destruction and physical attack were your primary responses to differences of opinion.
What I find odd about your carry on is that if an employer was to kick an employees ass, or glue down the employees personal property then you would scream blue murder. You appear to be purely tribal with little interest in what is fair or reasonable in human relationships (ie what is good for the goose should be good for the gander).
Luckily your views and apparent norms of behaviour are not representative of most people in society.
Regards,
Terje.
April 12th, 2006 at 9:35 am
ok, guys, time for a chill pill!
Jimmy, I meant no offence. just got a bit jovial and too excited… looking forward to my long weekend… while we still can hav ‘em!
Terje, at least I read Steve’s rant as a joke. I don’t think it was meant as abuse (preeetty lame).
But the real point here is that lack of productivity and “toilet” sabotage will become the norm, under Howard’s extreme and radical ideologically based anti-worker laws. Massive strikes will happen, and our country is becoming more and more divided and polarised.
I’m no Keating fan but if there’s something he did well was to manage expectations and conflict while getting out of the way of the economy and most businesses. Until he stuffed up with the recession we had to have…
That Social Accord is what is being shred to pieces, and it wasn’t even openly taken to an election. Previous generations of inmigrants used to call Oz a: “Workers’ Paradise”. Current generations of inmigrants call Oz a gulag, and Howard racist.
April 12th, 2006 at 9:41 am
It’s ironic that neo-liberals and left-wing socialists disagree on many things, but happen to share a common dislike for industrial tribunals. The only two groups who opposed arbitration were–and are–the communist and left-wing unions, who prefer to rely on direct action (”workers of the world unite..!”) and the neo-liberal, extreme right, who think anything that protects unions and workers (the tribunals dont just deal with wage claims) is a clamp on private enterprise.
April 12th, 2006 at 9:43 am
sorry for the error
April 12th, 2006 at 11:48 am
Avaroo,
Could you supply us with the details of how ‘ unions exploit many of their members’. This statement is simply nonesense. Union membership is voluntary. If you don’t like your union you can resign. As for ALP hacks and the like, there are some in some unions, but rather less than wannabee liberals working for employer organisations-and let me say, if anyone thinks union organisers sit back all day doing nothing while the dues roll in, they need to get out a bit more-as for the destruction of property occasioned by the glueing of a toiletseat to the toilet, understand that in the absence of any rights at work, people will do what they have to do to register their feeelings at being exploited and mistreated at work. I realise that in the neo liberal paradise inhabitated by the likes of terje and his mates form the CIS that the remedy for workers is to go out and look for another job, but I guess those welfare to work single parents who try that one in a country town will have to learn to like it and lump it, since to leave a job with out a reasonable excuse will result in a breaching of their welfare entitlements to the tune of thousands of dollars.
Oh well, it’s their fault I suppose- should have invested more in their personal capital-like having rich parents to send them to university and the like. Grow up. You neo liberals and libertarians are just a bunch of socially challenged adolescents.
April 12th, 2006 at 12:03 pm
Unions unfortunately, wind up exploiting many of their members,
I’m a union member, and I feel protected ratehr than exploited. While I don’t in principle think that my dues should in part go to the ALP, I think that this is no greater an injsutice than the companies that donate heavily to the conservatives, without any shareholder approval or notification. The unions are in bed with teh ALP, big business is in bed with the Liberals. It kinda balances out, except that the arrogant and hubristic Howard government is crackign down on the unions and opening teh floodgates for the rich to donate.
Why are political donations tax deductible?
April 12th, 2006 at 1:39 pm
stoptherubbish,
If I was a union member, working on a Perth construction site, do you really think I could resign from the union without losing my job? Closed shops are still a reality (even if illegal), so perhaps you should just take a breath during your incredibly long sentences and think about it. As for exploitation - if I am happy with my pay and conditions, but the union, pursuing a political point, calls a stop work to which I am essentially forced to go, am I being exploited?
As for finding another job - I worked as a labourer for over two years, on building sites and mine sites. I was still able to find another job when the current employer was not paying me enough or was, in my opinion, just not worth working for. I have had to move to find work. It is not that difficult.
Our ancestors (or, at least those not forced out of the UK) moved here of their own volition to get work. Surely we can write up a CV or pick up the phone for the same purpose.
April 12th, 2006 at 2:29 pm
Neophyte, union membership as a share of the workforce is still dropping. I did a little post on this today (http://andrewleigh.com/?p=42). Somehow the reporting has been particularly bad this year, as a bunch of people seem to think the share is going up.
April 12th, 2006 at 8:40 pm
“If people are paid to clean toilets and instead they spend their time glueing them down, then how is this worthy behaviour?”
Suppose there is an entrepreneur among the toilet cleaners. Being profit minded, the entrepreneur figures that investing a bit of time and acquiring the input ‘glue’ to produce the output ‘toilet with its seat glued down’ leads to a positive return in the form of a reduction in the total surface area to be cleaned for many periods to come. The entrepreneur explains this idea to his or her potential business partners (shareholders) by saying that the reduction in work required from this investment project corresponds to a cost-cutting measure in the form of narrowing the difference between their marginal product and their wage. Yes, says the entrepreneur in response to a question from the floor of the first shareholders meeting, we are underpaid not because our ‘boss’ is mean or has the wrong attitude, its just because the guy has no experience in the job we are doing and hence doesn’t know what our marginal product is. So, we just have to take over the operation to improve allocative efficiency. Yes, the entrepreneur says in response to another question, you are quite right, if the toilets are used only by females then we can say that we have brought about a Pareto improvement. And, if this is not the case, then we do what is commercial practice, we introduce the user-pays principle. Those who want to have cleaning of a technology with an enlarged cleaning area have to pay a service fee. That’s progress – why else would you have to pay not to have your name in the telephone book.
I hope this answers the question.
April 12th, 2006 at 11:12 pm
Ernestine,
The business then promptly goes bankrupt because no-one wants to buy rubbish toilet seats.
Thus endeth the lesson.
April 12th, 2006 at 11:36 pm
Andrew,
Are you sure you are not substituting a different business plan?
Please note, Terje advocates freedom to collude.
April 13th, 2006 at 5:40 am
Ernestine,
Very creative. Although not a lot of help. I still don’t see the activity as worthy behaviour. Deliberately destroying property that belongs to others in the cause of extracting a better deal is extortion. It may also involve collusion but that is not what makes it objectionable.
Regards,
Terje.
April 13th, 2006 at 7:11 am
The cleaning company that cleans my premises was doing a sh!tty job (both literally and metaphorically). When they didn’t improve after having this brought to their attention, we terminated the contract and got a new cleaning company.
The new guys are great - spend less time in the office of an evening yet get more done.
That’s why we outsource: what can be easier and more honest than a contract? Cleaning is not core to our business, just as neither is legal work, accounting, office supply manufacturing (we buy our supplies down at OfficeWorks like everyone else), etc, etc.
This lefty aversion to outsourcing of certain jobs makes no sense to me.
April 13th, 2006 at 8:24 am
“Could you supply us with the details of how ‘ unions exploit many of their members’. ”
Closed shops as Andrew mentioned for starters. I’m not a fan or forced union membership, or forced membership in anything. It’s basically extortion. Secondly, some unions, and I’m speaking of the US here, as that’s where my experience is, have spent lavishly on their leadership while basically doing not a thing for their members, or even getting companies shut down, all at union members’ expense. Easter Airlines, anyone?
“Union membership is voluntary. If you don’t like your union you can resign. ”
That’s not actually true everywhere. Even if it is, I’m not a fan of the leadership getting the royal treatment while the “little people” get the shaft and that’s often the case with unions. If you’re John Sweeney, you’re probably doing OK, if you’re not, well, too bad.
“if anyone thinks union organisers sit back all day doing nothing while the dues roll in, they need to get out a bit more”
some don’t. some do.
“as for the destruction of property occasioned by the glueing of a toiletseat to the toilet, understand that in the absence of any rights at work, people will do what they have to do to register their feeelings at being exploited and mistreated at work.”
IS the point to register one’s feelings or to improve conditions. Vandalism never improves conditions.
“I realise that in the neo liberal paradise inhabitated by the likes of terje and his mates form the CIS that the remedy for workers is to go out and look for another job, but I guess those welfare to work single parents who try that one in a country town will have to learn to like it and lump it, since to leave a job with out a reasonable excuse will result in a breaching of their welfare entitlements to the tune of thousands of dollars.”
What we all need to realize, for ourselves as well as future generations, is that we are all our own brands these days. There’s no safety anymore in huddling together trying to keep from being shown the door simply by being too big to fit through the door. If a company can’t work with a union, the company will go out of business, benefitting no one, the union members least of all. We need to, for ourselves and our children, make sure that we each have marketable, adaptable skills. That way we can move from field to field and company to company, as work does. There’s little point in trying to remain dinosaurs these days. Protect yourself by being marketable and employable, not by vandalism.
“I’m a union member, and I feel protected ratehr than exploited. ”
You’re probably not alone either. But the way of the world is moving away from unionization. You can swim with the tide or against it. I’ve always found it easier, as well as to my benefit, to swim with it.
April 13th, 2006 at 8:26 am
Sorry, that should have been Eastern Airlines, of course.
April 13th, 2006 at 9:02 am
Avaroo,
You mistake casue and effect. You are also full of post modern marketing s***.
April 13th, 2006 at 9:08 am
Sorry rubbish, that comment means nothing to me. Want to elaborate?
April 13th, 2006 at 5:41 pm
Terje,
Thanks for your reply: “Very creative. Although not a lot of help. I still don’t see the activity as worthy behaviour. Deliberately destroying property that belongs to others in the cause of extracting a better deal is extortion. It may also involve collusion but that is not what makes it objectionable. ”
I am surprised by your reply.
Isn’t one of the aims of ‘micro-economic reform’ to ‘improve allocative efficiency’? On the basis of my reading on this subject, I maintain it is. If you don’t think so then the ‘free market capitalism story’, which you and others seem to promote all over cyber space, differs from the conceptual framework of ‘competitive private ownership economies’ in a way that cannot be dismissed as ‘mere semantics’.
My entrepreneurial ‘glue-job’ story contains the hypothesis that the marginal product of a cleaner is greater than the price (wage) received by the cleaner for the service. I am not trying to persuade you to believe my story. I am saying, please feel free to disprove the hypothesis by means of empirical data. My entrepreneurial ‘glue-job’ story contains an example of an application of the notion of ‘Pareto improvement’ with a ‘mixed result’ (males vs females but not due to any sociological gender bias hypothesis).
Your description, quote “deliberately destroying property that belongs to others in the cause of extracting a better deal is extortion� does not belong to the story I wrote.
Where in my entrepreneurial ‘glue-job story’ is there a ‘destruction of property’? Nowhere. The glue-job constitutes an alteration of a physical object, called toilet. There is a distinction between ‘destruction’ and ‘alteration’. Nowhere in my entrepreneurial ‘glue-job story’ is there any information which allows you to conclude (logically) that the physical objects, called toilets, ‘belong to others’. Given compulsory superannuation, which is managed by people who tend to know about portfolio theory, the chances are that each cleaner is a partial owner. (Just recently, Avaroo informed that the old distinction between ‘capital’ and ‘labour’ is no longer relevant in the USA because of wide-spread share ownership). True, I didn’t make this hypothesis explicit in my entrepreneurial glue-job story but I make it explicit now. You are free to test the hypothesis empirically.
‘Extracting a better deal’: Who is extracting a better deal from whom in the ‘glue-job parable’ and in which sense?
As mentioned in an earlier post, theoretical models of ‘competitive private ownership economies’ do not contain a bias in favour of property rights of ‘capital’ over property rights of human skills. How does your ‘free market capitalism story’ deal with this item?
I did find a book in my library with the title “Capitalism In Spite of It All�, Edwin C. Sims, Gordon and Breach, 1989. It contains a story but it does not contain questions and it does not contain answers and it does not contain anything from which potentially testable hypotheses can be derived. I learned nothing. Perhaps the book is aimed at satisfying a demand for a type of gospel; there is a chapter on ‘The Spirit of Capitalism’.
Your advocacy of collusion makes the glue-job project a credible one (ie no ‘blue sky’ project). Are you still in favour of collusion?
April 14th, 2006 at 12:08 am
I never said I was in favour of collusion. I said that I did not think collusion should be illegal. Or at least that was the intent of what I said.
Likewise I don’t think abortion should be illegal. However I am not “in favour” of abortion. I think abortion is rather tragic and I would be unlikely to encourage it. Let me know if you can’t figure out the distinction I am making.
In general I do think extortion (ie threatening to damage peoples faces or their property if they don’t do what you want) should be illegal, even when it is done in collusion with others.
Yes that seems like a reasonable assertion. Although for a lot of micro-economic reform their are other supporting arguments also.
It is relevant in so far as it says that (in my humble opinion) allocative efficiency is not acceptable on any terms. Throwing Jamie Packer in jail and distributing his wealth across the Australian population might be good for allocative efficiency but I would neither advocate it nor regard it as “micro-economic reform”.
There are many instances of efficiency that I am inclined to object to. A universal identification card issued by the government and cross correlating all our personal details, movements and history might be efficient but I am unlikely to support or advocate such a device.
April 14th, 2006 at 12:55 am
Terje,
1. True, you advocated making collusion legal.
2. I agree, extortion should be illegal and I understand it is illegal. But can people, who are both toilet cleaners and shareholders be accused of extortion against themselves?
3. Extracting a better deal’: Who is extracting a better deal from whom in the ‘glue-job parable’ and in which sense?
4. “[Isn’t one of the aims of ‘micro-economic reform’ to ‘improve allocative efficiency’? On the basis of my reading on this subject, I maintain it is.]
Yes that seems like a reasonable assertion. Although for a lot of micro-economic reform their are other supporting arguments also. ”
What are “other supporting arguments” for micro-economic reform?
5. “[Your description, quote “deliberately destroying property that belongs to others in the cause of extracting a better deal is extortionâ€? does not belong to the story I wrote. ]
It is relevant in so far as it says that (in my humble opinion) allocative efficiency is not acceptable on any terms. Throwing Jamie Packer in jail and distributing his wealth across the Australian population might be good for allocative efficiency but I would neither advocate it nor regard it as “micro-economic reformâ€?.”
No it is not because you are tryig to change the order of arguments and hence construct a different story.
6. It seems to me you don’t understand the concept of ‘allocative efficiency’.
Regards and Happy Easter
April 14th, 2006 at 6:34 am
“But can people, who are both toilet cleaners and shareholders be accused of extortion against themselves?”
I thought the liberal argument was that people are EITHER toilet cleaners or shareholders but never both at the same time. If a shareholder is damaging company property, then he’s just a very stupid person, unless you think people who damage their own property are successfully telling off anyone other than themselves.
April 14th, 2006 at 7:10 am
Ok - hope those enthusiastic people out there will join in the launch of the Clean Start campaign come next Thursday.
Where’s it happening? At a place near you!
Here’s a list showing where you can join a rally in the ten-city launch of the Clean Start campaign
April 14th, 2006 at 5:20 pm
1. No argument.
2. No argument.
3. The ‘glue-job parable’ is all nice. The parable is not where the seat glueing idea first came into this discussion. When it was first introduced it was presented as a form of extortion against the employer. You have re-written the story for your own reasons. Your version seems to neglect the fact that there may be other shareholders besides the cleaners or the perception that the consumers of toilet services will have towards glued seats. Perhaps you can rework it to accomodate these issues. I won’t hold my breath.
4. Some micro-economic reforms (eg user pays) can be argued on the grounds of fairness. ie ethical arguments not economic ones.
5. Its not like your parable stuck to the story being discussed.
6. It seems to me that you don’t have any signficant point to make.
April 14th, 2006 at 9:33 pm
Terje,
The purpose of the parable was not to generate an opportunity for point scoring. One of the aims of this little exercise was to bring out a few issues associated with the corporate form of business. These issues are totally wiped under the carpet with simplistic mental models involving ‘the employer’ and ‘the employee’. Another point was that it is one thing to have theoretical models which characterise an ‘efficient allocation’ (eg marginal product = price). It is another to find out what happens in reality. IMHO, doctrinaire market people confuse the two. This is unreasonable because it is a confusion of what one would like to have with what exists in reality. The most annoying aspect (at least for me) of these doctrinaire people is that they start moralising - all over the place and incoherent.
To give you a real life example (ie I have direct knowledge), a hospitality worker has been working for 7 years without a pay increase. The amount of work increased during the period, prices of goods and services increased during the same period. The pay at the beginning of the period was ‘minimum pay’. The person became ill. Can’t work anymore at all. During the same period, ‘the employer’ has hired a public relations person who ‘needs to’ go on overseas trips - business class. Take the ‘needs to go’ as given. What about the business class air fares?? How does such a situation come about? Simple, people get talked into contracts which make increases in pay dependent of the profitability of the enterprise. Obviously, the hospitality worker was not asked whether the enterprise should pay for the difference between economy and business class air fares. So, in what sense is the ‘wage’ market determined - if it is the fashion to for enterprises to have PR managers who like to travel ‘business class’? And, how would one measure the productivity of a PR manager? Could be negative. The advice to go somewhere else is simplistic in the sense that it works only in some special circustances.
As to your specific question, what happens is there are more shareholders (in the parable). This is a version of my question: Extracting a better deal’: Who is extracting a better deal from whom in the ‘glue-job parable’ and in which sense?
Setting all other possible issues aside, if the marginal product of the cleaners is higher than their wage then the cleaner-shareholders are subsidising the non-cleaner shareholders.
April 15th, 2006 at 7:44 am
Ernestine,
Do you believe that employees should be paid an amount equivalent to their marginal product? If so why? If not then why not?
Regards,
Terje.
April 15th, 2006 at 3:30 pm
Terje,
I don’t understand your question.
I refer to a paper by Mr J. Humphreys, ‘Reform 30/30: rebuilding Australia’s tax and welfare systems, ‘Perspectives on Tax Reform (10)’, Centre for Independent Studies Policy Monograph 70, Sydney, December 2005, which was submitted to the Government. This paper contains a statement which corresponds to a theoretical result (marginal product = price) from a body of theory known as the ‘marginal productivity theory’ but it is written as if it would be an empirical fact or self-evident truth.. I have quoted the relevant excerpt from Mr Humpheys’ paper in an earlier post.
Please ask Mr Humphreys for the empirical evidence in support of all of the assumptions underlying the theoretical model for which the marginal conditions can be shown to hold and for empirical evidence that people’s wages do correspond to their marginal product.
If Mr Humphreys hasn’t got the data, then I am saying his submission is ‘doctrinaire’ as defined in my earlier post.
My believes are irrelevant.
April 15th, 2006 at 4:45 pm
Increasingly I am inclined to agree.
April 15th, 2006 at 6:58 pm
Terje,
Happy to hear you are inclined to agree with me.
So where is the data to support the statement in Mr J. Humphreys, ‘Reform 30/30: rebuilding Australia’s tax and welfare systems, ‘Perspectives on Tax Reform (10)’, Centre for Independent Studies Policy Monograph 70, Sydney, December 2005, regarding the relationship between ‘marginal products and prices (including wages).
April 15th, 2006 at 7:50 pm
On the subject of whether union membership is increasing, the ABS figures that Andrew Leigh refers to were collected eight months ago, before people started to understand the impact of WorkChoices.
More recent Roy Morgan polling, in October 2005, reported a small increase in union membership, to about 24 percent. I haven’t seen the survey, and don’t know the confidence levels, but this seems to suggest a 1 percentage point increase compared with the August 2005 ABS figures, which placed union membership at 22.4 percent.
The ABS figures also reported a 4 percent increase in actual membership numbers since August 2004, and that’s the basis of the claim by David Peetz, which neophyte points to. Andrew dismisses that claim on the basis that the increase is absolute, not proportional, but business and organisations frequently cite absolute sales and membership figures, and they do so legitimately.
Given that the full impact of WorkChoices have become apparent to most people only over the past few weeks, it’s likely that the upward membership trend identified by the Morgan polling last year will be confirmed.
April 15th, 2006 at 8:03 pm
Why don’t you ask John Humphreys? It seems that he wrote the paper in question. If you need help in locating his email address I am sure I can help track it down.
April 15th, 2006 at 9:16 pm
Fair enough regarding Humphreys’ paper. Not sure though whether publishing Humphreys’ email address on this site is allowed. Perhaps forwarding the question to John Humphreys could work.
April 15th, 2006 at 10:51 pm
If you wish to contact John then go to the following webpage. Johns email address is referenced in the bottom text box.
http://www.gravett.org/yobbo/quiz/graph.php
If you want to get there the long way you can do the actual quiz first at the following link:-
http://www.gravett.org/yobbo/quiz/quiz.htm
The quiz will pigeon hole you politically based on a narrow set of questions and a bit of inference. You may not enjoy the process.
April 16th, 2006 at 9:12 am
Thank you, thank you for this entertaining thread.
(1)which is why the ALP has a political problem. It’s largely unionist membership (can’t be a member unless your a union member, remember)
I’m not sure that this is correct. My mum, that frothing 84-year-old overthrower of the social order, joined the ALP a couple of years ago. I’m pretty sure she doesn’t qualify to be in any union, other than the Feisty Old Grannies union.
I told her she was wasting her time joining what has become really the alternative Liberal government.
(2) Ernestine, that is a brilliant idea. Why have toilet seats that go up and down, and have to be cleaned underneath, in a public toilet that is “woman-only”? Totally unnecessary! I think you are really onto something here.
And Terje’s dogged pursuit of the subject, while not allowing any of this undignified levity to creep in, is hilarious.
April 16th, 2006 at 10:24 am
Helen, you can have more entertainment if you click on the second web-site listed by Terje. There are 10 questions. There are pre-selected answers that are said to represent the current state of ‘politics’. There is a sort-of Pavlovian click on box titled “Please judge me, Dear Leader”. When pressing this Pavlovian click on box, a diagram appears. For the pre-selected answers the program shows ‘your’ position as being just a little to the north-east of a box labelled ‘ALP’ but quite a bit to the south-west of a box labelled ‘LP’. Interesting. I would have expected that the current state of ‘politics’ on the 10 questions would have to result in ‘your’ position corresponding with the box labelled ‘LP’.
One could write a treatise on the questions. But, lets just focus on one. The economics question on the share of Gross Domestic Product under the control of the government is interesting - at least for me - because an option, which I would consider sensible, is not an option - so much for ‘freedom of choice’. The sensible option I have in mind is “it depends on the circumstances”. The available choices are percentages or a range of percentages; a bit like recipies in cookbooks.
April 16th, 2006 at 12:32 pm
I wonder if anyone here has cleaned toilets for a profession. Anyone who cleans a toilet properly is lifting the lid. (Helen, don’t come to me looking for a job cleaning toilets)
April 16th, 2006 at 3:01 pm
Terje - I would be interested in your score. I got 18 and 14.
April 17th, 2006 at 3:16 pm
Andrew,
I primarily posted the link because it offered a contact email address for John Humphreys.
However I have done the quiz and my score is:-
Quizes like this one are interesting provocations. However they are only ever going to be good for a little fun. In terms of labels I do think Liberal Democracy is a better description for what I believe in than the others available.
Another quiz of a similar nature is available here:-
http://www.self-gov.org/quiz.html
Regards,
Terje.
April 17th, 2006 at 3:39 pm
I’ve always found the political compass quiz to be one of the better ones, although its not Australia specific.
The Political Compass
April 18th, 2006 at 10:11 am
Anyone who cleans a toilet properly is lifting the lid. (Helen, don’t come to me looking for a job cleaning toilets)
You have misinterpreted Ernestine’s invention, Steve. The idea is not to have a lid that lifts at all.
Of course, rather than glueing down toilet seats, you’d have a toilet with the seat nicely incorporated into the structure.
Ernestine, get down to the patent office before someone else does.
As for the implication I’d even be interested in a job cleaning Steve’s toilets, I can only give a mystified look.
April 18th, 2006 at 11:00 am
Which is all nice and innovative, but way off the originial topic in which Steve Munn said:-
Steve Munn was encouraging sabotage as a wages and conditions bargaining tool rather than toilet seat innovation as a productivity booster. Ernestine offered cover for Steve by mudding the waters and effectively changing the topic whilst keeping the toilet seat example. A clever form of argument rather than an intelligent one.
It would be interesting to see if Helen and Ernestine will come clean and tell us their views on sabotage as a bargaining tool. Do they condone it? Do they think sabotage should be legal. Do they think it should be encouraged in the way that Steve Munn does?
April 18th, 2006 at 11:42 am
Terje: Well put.
Helen: No surprise to learn that getting your hands dirty is anathema to you.
April 18th, 2006 at 2:15 pm
No, no, no Terje, this is not the way to go.
Contrary to your assertion, I did not offer ‘cover for Steve Munn’. I don’t know Steve Munn but I assume he is enough of a man to not need cover from anybody.
I did not muddy the water. I provided an answer to your question. The question was: “If people are paid to clean toilets and instead they spend their time glueing them down, then how is this worthy behaviour?� You correctly say that my answer contains an example of a productivity gain.
You say my answer was “A clever form of argument rather than an intelligent one.� I have to correct you. My answer involved no more than applying economic concepts, drawn from the non-dogmatic literature (known as mathematical economics) to provide an answer to your question – a kind of routine job, if you like.
Frustrating as it may be, I am not going to be fool enough to bite into your rhetorical challenge.
April 18th, 2006 at 2:58 pm
Ernestine,
I said:-
This comment was unnecessarily flippant and I apologise. I pretty much concede all your points (which are divergent to the point made by Steve Munn).
What I should have said was that “the discussion with Ernestine has muddied the waters and provided cover for Steve Munn”.
When I said:-
I was being unnecessarily bitter about the distraction that I encountered in your divergent point. In practice the distraction was largely my fault because:-
1. I failed to explicitly limit my original question to the issue of sabotage.
2. I failed to grasp the essence of your divergent parable in the first instance.
My frustration stems from this waste of time and it was wrong of me to pin this waste on you. You have been more than patient in explaining your point and so projecting this bitterness at you is unfair. So again I apologise.
If you will accept this apology then I would like to get back to my point about the comment by Steve Munn and the use of sabotage as a bargaining tool. A discussion that you may or may not wish to involve yourself in.
Regards,
Terje.
P.S. Thanks for hanging in there until I got your point.
April 18th, 2006 at 3:47 pm
Terje, no need to apologise so profusely. I would suggest all of us extent thank you to John Quiggin for setting an example in allowing open debate on a respectable blog-site.
April 20th, 2006 at 6:33 am
Today’s the big launch date - Here’s hoping John you can attend your local launch - and report to your many readers.
April 20th, 2006 at 6:36 am
If you are looking for the exact details of the Clean Start rallies across Australia and New Zealand today go no further than:
http://www.lhmu.org.au/lhmu/campaigns/Clean_Start/
April 20th, 2006 at 9:32 am
Helen: No surprise to learn that getting your hands dirty is anathema to you.
*Whistling noise as the point I was making sails right over SATP’s head*
April 20th, 2006 at 9:33 am
Oh, and I clean toilets frequently at home without getting my hands dirty. It’s all about rubber gloves. You clean toilets bare handed? obviously we have vastly different standards of hygeine. Remind me not to drink anything served up in your establishment.
April 20th, 2006 at 8:55 pm
Apparently there are less germs on your average toilet seat than on your average kitchen benchtop. I think it has something to do with available nutrients. In essence licking the toilet seat in most houses would be safer than licking the kitchen bench.
Regards,
Terje.
P.S. I don’t bother with rubber gloves when I clean the loo unless I am using some nasty cleaning agent.
April 20th, 2006 at 10:07 pm
St Mary’s Catholic Church South Brisbane hosted the launch of the Fair Deal for Cleaners Campaign in Brisbane today. The campaign was also supported by the Community of St Francis Church in Melbourne as well as religious and community leaders, including Bishop Patrick Power of the Catholic Archdiocese of Canberra and Goulburn and Sister Libby Rogerson, a Loreto sister currently working as the Coordinator of Social Justice and Director of Caritas in the Diocese of Parramatta.
In South Brisbane, Father Terry Fitzpatrick blessed the campaign banner in the presence of a large number of members of the Liquor, Hospitality and Miscellaneous Union (LHMU) and supporters. The union has its Brisbane Office across the road from St Mary’s. South Brisbane is on the edge of the Central Business district which employs many of the cleaners whose positions and working conditions are the focus of this campaign. The banner which was blessed as part of the campaign launch was in eight languages reflecting the cultural diversity of those in the cleaning industry
Fr Fitzpatrick said:� As a Catholic community we are called to promote Catholic Social Teachings and action on behalf of the rights of the worker are part of our tradition�
A recent the research paper from the LHMU, A Clean Start for the Property Services industry, states that in Australia and New Zealand, traditionally it was the cleaning industry that offered one of the prime ways for immigrants to enter the mainstream – to build a future for themselves through hard work in cleaning. Now the industry has become a workplace kept behind locked doors where the most vulnerable are kept in an unending cycle of exploitation and marginalisation.
Fr Fitzpatrick said “ Catholic Social Teaching reminds us that it our duty to reaffirm that the remuneration of work is not something that can be left to the laws of the marketplace; nor should it be a decision left to the will of the more powerful. It must be determined in accordance with justice and equity; which means that workers must be paid a wage which allows them to live a truly human life and to fulfil their family obligations in a worthy manner. Mother and Teacher, #71�
Contact: Rev Terry Fitzpatrick 0738449122
Tony Robertson ( Images of event ) 0417792509
April 20th, 2006 at 10:43 pm
It’s not actually clear to me what the campaign is attempting to achieve. Is it regulatory interventions or merely social awareness?
April 20th, 2006 at 11:21 pm
Terje, I understand you are in favour of advocacy - don’t you like competition?
April 20th, 2006 at 11:47 pm
Helen: I do not compel people to drink, only to pay. You are free to spill/ignore/etc as you wish.
Lots of things fly over my head Helen, just now it was a succession of potted palms, then some chairs. Just so long as what is flying over doesn’t connect with my jaw I consider it a good day. Did I miss a point?
My toilets are as clean as those at Planet Hollywood, (however sans attendant brushing collars whilst the “job” is in progress) In fact, if Terje were inside my toilets, & in the interests of science got the urge to lick the place, there would be no adverse effects on Terje’s health.
In a break from domestic circumstnaces the same would apply to licking my kitchen, except for the stove hotplate, licking of which would cause agonising burns to Terje’s tongue.
April 21st, 2006 at 12:18 am
Terje the Norwegian says: “If you will accept this apology then I would like to get back to my point about the comment by Steve Munn and the use of sabotage as a bargaining tool.”
Where people are being grossly exploited, for instance by being paid less than a living wage, I have no problem with them using sabotage to improve their position if all else fails.
We live in an era where the Government forces companies in certain industries to fine workers 4 hours pay for stopping work for a few minutes to collect money for a dead colleague. F*ck one sided fairness.
The Government and industry representative bodies have declared class warfare. Let them cop some of the pain they happily dish out.
April 21st, 2006 at 12:55 am
This campaign first came to my attention today while I was watching the late news, after completing two jobs cleaning, firstly, professional offices and, secondly, a rather large office and plant in the boonies.
My natural sympathies lay with the workers; I know exactly how they feel - tired, often exhausted, and sometimes left wondering why on earth they work so hard for so little return on their efforts. Where my situation diverges from many of them is that we, my family, took a commercial risk and purchased a franchise. It’s been interesting and hair-pulling to see all the smiles and gladhandling evaporate after we handed over a rather hefty cheque. The kinds of contracts we identified as fitting our business model, and which we were assured would be ‘fine’ are still not forthcoming. In fact, with the exception of one contract we are spending hours each day in back-breaking labour on exactly the kind of work we identified as being totally unsuitable. Caveat emptor.
The hourly rate in the contracts is generally fine, but in our experience and opinion the only way to make a go of things is to work at a fever pitch. We get to know our clients and enjoy great relationships with them; they think we’re human dynamos and they’re right, but we have to be. After franchise fees, administration fees, chemical costs, and everything else that goes into it we’d be making babysitting money unless we moved fast. Honouring the agreement with our clients means that we refuse to take shortcuts in quality, so governed by that and the fixed contract rate all we can do work as quickly as humanly possible; anything less and our hourly rate plummets - we effectively become volunteers.
We’ve often discussed expansion, not only as a way to make more money (we took large salary drops to become self-employed) but also with a real regard to creating worthwhile employment for others. We’ve noticed that the contract cleaning world has a large proportion of people who don’t speak English as a first language and often lack the confidence and skills required to negotiate a better deal or a better livelihood. They probably don’t have a great deal of knowledge about their rights, because often they come from countries that don’t enjoy our brand of freedom and democracy, and in some cases unions may be outlawed. Then there’s the cultural background to consider; making money is good, paying union dues are incomprehensible.
I believe that a strong union movement that is fair and equitable is an absolute must, and it must reach out and be representative of anyone who has the right to live and work here. There’s a huge job cut out for the unions in that.
It’s a bit naive to expect that most business people and large companies have a care and a sincere and practical interest in the well-being of their own staff, let alone contract staff who are largely invisible. Obviously, I am for the worker. I will employ as many as I can under as fair a system as I can, not because I’m a good bloke but because I am human. Labor and Liberal both seem to forget that their decisions and actions have far-reaching consequences and often impact the most on those who can adequately represent themselves the least.
To put into perspective what a small employer like we wish to be would make, based on our current contract rate less franchise fees and costs, and travel (currently 280km a week) expenses (not including our time), if we paid a worker, say, $16.50 per hour on our current contracts we would make after expenses but before tax $1.50 per hour. And that’s before we take administration and statutory reporting time into account.
Heaven help the employed cleaner! Without representation I suspect we’ll see the continued erosion of what little they earn and what small amount of benefits they get. And heaven help the employer! Unless we can find staff who’re prepared to work as quickly, efficiently, conscientiously and cleanly as us, we’ll actually lose money on each contract.
April 21st, 2006 at 1:47 am
Steve,
Do you honestly believe that sabotage is going to improve their situation? If I had hired a cleaner that came in and wrecked equipment, particularly that of a client, I would like to make sure that I sacked them before every other cleaner I employed lost their job because I went out of business.
Grow up. Vandalism is a crime for a good reason.
April 21st, 2006 at 2:41 am
I’m a pretty easy person to track down. My e-mail address is posted on my personal blog — http://www.chapter5.blogspot.com
The issue of whether the labour market is efficient has been covered by more emperical studies that I would ever want to read. Nobody claims that the IR market (or any other market on earth) is perfectly efficient, especially according to static equlibirum analysis. But it’s close enough. If the studies (which overwhelming show the market following behaving like a relatively efficient market - ie price floors lead to excess supply) aren’t good enough for you — I suggest common sense, which will lead you to the same concluion.
April 21st, 2006 at 7:10 am
John Humphreys,
1. The paper, J. Humphreys, ‘Reform 30/30: rebuilding Australia’s tax and welfare systems, ‘Perspectives on Tax Reform (10)’, Centre for Independent Studies Policy Monograph 70, Sydney, December 2005, was submitted to the Government. This paper contains a statement which corresponds to a theoretical result (marginal product = price) from a body of theory known as the ‘marginal productivity theory’ but it is written as if it would be an empirical fact or self-evident truth.. I have quoted the relevant excerpt from Mr Humpheys’ paper in an earlier post on another thread.
Where is the evidence for the statement of ’self-evident truth’ regarding the relevance of the marginal productivity theory (including evidence that the minimum wealth constraint is ensured) and that prices (wages) at not below the marginal product.
2. You refer to “IR market” I understand there are money making opportunities for “IR” (industrial relations) consultants. Please provide empirical evidence that the marginal product of industrial relations consultants is at least equal to their consulting fees.
3. Please provide evidence that the ‘marginal product’ of HIH directors was approximately equal to their income.
4. Please explain how you measure a ‘marginal product’ in the presence of ‘transfer pricing’.
5. Please explain how the marginal productvity theory is relevant at all, given that markets are incomplete.
6. Please provide evidence that Solomon Islanders (in particular people employed in the fishing industry) were paid their ‘marginal product’.
7. How do you measure the marginal product of public relations people.
April 21st, 2006 at 10:14 am
“price floors”
There was a prolonged period of excess supply of office space in the Sydney CBD. I take it that it was ‘price-rigidity’ in the rental market which prevented ‘market clearing’. By ‘price-rigidity’ I mean the rental price did not fall to ‘clear the market’ as assumed in Humphreys’ preferred theory.
Why is there no legislation against ‘price-rigidity’ (price floor) in the market for office space?
Why is there no legislation against ‘price-rigidity’ in to debt market?
April 21st, 2006 at 4:21 pm
I am not sure I understand this question. Are you implying that the point of the “Fair Deal for Cleaners Campaign” is advocacy? And if that is the point then fine, I have nothing against advocacy. However I am still interested to know what the advocate is trying to achieve.
Regards,
Terje.
April 21st, 2006 at 4:29 pm
Just so you know, I am not a Norwegian. I was born in Gosford District Hospital in 1970. My mother is Norwegian but you can leave her out of this.
Do you limit your support of sabotage to the glueing of toilet seats or are you in favour of car bombs and burning down buildings?
So why blame the company? If their hand is being forced then surely you should be targeting the government that is forcing their hand.
I fail to see how glueing down toilet seats will inflict pain on the government.
April 21st, 2006 at 7:24 pm
Andrew Reynolds says: “Do you honestly believe that sabotage is going to improve their situation? ”
I think you will find that sabotage is as old as industrial relations itself. Sometimes it succeeds, sometimes it doesn’t. Without wanting to be seen as supporting the worst excesses of construction workers, things like snap strikes before a concrete are I suppose an effective form of sabotage. Such tactics also undoubtedly account for the construction industry being in the vanguard of workers’ rights.
You say grow up. Do you also say grow up to employers who deprive their workers of an income through an aggressive lockout, sack workers without just cause or seek to ramp up profits by screwing down the wages and conditions of workers?
April 22nd, 2006 at 1:32 am
John Humphreys wrote : Nobody claims that the IR market … is perfectly efficient, especially according to static equlibirum analysis. But it’s close enough.
With a massive global over-supply of labour (and a looming under-supply of non-renewable resources) there may be no practical limit as to how low the wages of cleaners and other low-skilled workers can go, unless some constraints are placed on the operation of the markets.
I think those who advocate unrestrained free market determination of wage levels should have the honesty to state just how much more than the miserable remuneration paid to workers in third world countries, cleaners in Australia are entitled to.
April 22nd, 2006 at 1:54 am
By what measure is there an oversupply. Roughly speaking there is a pair of hands for every mouth which would seems to me to be about the right ratio.
I think the real problem is a lack of capital in many regions of the world and a lack of capital overall. Capital is the lever that means the worker does not need to till the soil with his/her naked fingers.
The ratio of capital to labour is highest in the most developed nations. Those nations that are without capital are now adopting policies that offer an opportunity for the owners of mobile forms of capital. In so doing they threated to reduce the capital to labour ration in the developed world.
The supply shock posed by China (and other nations) will have ramifications thoughout this century. It is much better than the human waste that would be created by perpetually impoverished China.
Cleaners in Australia are unlikely to be threated by competition from labour in China. Until buidings and houses can be flown to China for a quick tidy up, cleaners in Australia will be competing only with other Australian resident cleaners. A better example might be factory workers.
One thing the government could do to both help marginal workers and to advance the cause of economic freedom would be to increase the tax free threshhold.
Out of interest how much do you think the cleaners working in China are entitled to, and what do you think stops them from getting it?
April 22nd, 2006 at 1:12 pm
Terje, traditionally Chinese used to crap in their gardens. I doubt if the sanitation industry has reached equilibrium yet.
April 22nd, 2006 at 4:13 pm
Terje,
Your response does not appear to be a serious one. The flaws in your logic should be self-evident and I should not have to point them out.
As I wrote in another thread there are more than 1 billion human beings alive in the world who have no economic role and are forced to live miserable existences on shanty towns on the outskirts of sprawling third world metropolises. Much of this is has been caused by mechanisation of agriculture based unsustainably upon non-renweable peteroluem.
It is because of this surplus of human beings that unscrupulous employers have been able to move much of the world’s economic activity to these countries where people are prepared to work for so little, and in doing so, have massively reduced the demand for less skilled labour in Australia.
This in turn has made it possible for unconscionable Australian employers backed by this objectionable Coalition Government to pay their workers less and less and less (and don’t believe Howard’s fraudulent statistic about wages having risen 14% since he came to office in 1996) for working harder and harder as so well described in Elisabeth Wynhausen’s excellent “Dirt Cheap”.
April 22nd, 2006 at 4:59 pm
James,
We have missed you. We needed reminding that, in some way, we need to get rid of a quarter (or more) of the world’s population. Personally, one child per family smacks of us all moving to China. I like the food, but not the system of government that would come with that move - or the force needed to implement it.
BTW - you should tell the unskilled labourers up the north of WA that they are being paid less than they were. Over 100K, with living expenses covered by the company, is truly awful pay. I just don’t know how they survive. It must be hell.
April 22nd, 2006 at 6:03 pm
Andrew Reynolds wrote :
You should know perfectly well that that is an unusual situation based on a distorted and increasingly dysfunctional world economy, and cannot last. Those workers engaged unsustainably in the extraction of non-renewable minerals are being paid highly at the expense of our planetary environment and of future generations. There is no possible way that all workers in this country, let alone the whole planet, could hope to enjoy that kind of income in the long term.
What is far more typical are the kinds of working conditons described in “Nickel and Dimed” and “Dirt Cheap“
April 23rd, 2006 at 12:30 am
James,
At current projected extraction rates, I think in the 1 to 2 centuries that it takes to exhaust the iron ore resources up there we may have identified a solution. Even for beings as silly as humans who seem to want to breed in such an inconvenient fashion.
As we have had this argument ad nauseum before I will just say that I regard your position as overly pessimistic. I take it you would say I am overly optimistic. We shall just have to differ.
As for this bit
it is wrong on so many levels it is difficult to know where to start - perhaps some basic trade theory revision may be in order. If you can disprove comparative advantage I can smell a Nobel Prize for economics in your future. This was said about it, quite accurately -
My guess is that you are one of those thousands.
The rest is a normal anti-Howard diatribe, and so can be ignored. The man may have faults, but he is not evil - despite the eyebrows.
April 23rd, 2006 at 8:23 am
Andrew Reynolds,
I don’t agree with your advice on international trade theory.
1. The international trade theory result, known as ‘comparative advantage’ is conditional on a set of assumptions. These may not be valid in all empirical circumstances.
2. A distinction is to be drawn between ‘gains from trade’ and the distribution of gains from trade between ‘countries’. That is, even if there are gains from trade empirically, these gains are not necessarily ‘fairly’ distributed between ‘countries’.
3. A distinction is to be drawn between the distribution of gains from trade between ‘countries’ and the distribution of gains from trade within a ‘country’.
4. A distinction is to be drawn between ‘international trade’ between economies where the ‘minimum wealth condition’ is approxiately fulfilled (eg all working people are ensured an income such that they can raise a family in a ‘decent’ way - exact wording may differ) and economies where this is not the case.
5. Empirically, international trade is carried out by multinational firms, many of which are also ‘multinational producers’. Distribution of ‘gains from international production’ raise additional problems.
6. The comparative advantage trade theory (Ricardo) totally ignores ‘negative externalities’ in the form of air and water pollution which is associated with transport.
Note, even your wiki- reference uses the term “can be” rather than “is”
“In economics, the theory of comparative advantage explains why it can be beneficial for two countries to trade, even though one of them may be able to produce every kind of item more cheaply than the other. What matters is not the absolute cost of production, but rather the ratio between how easily the two countries can produce different kinds of things. The concept is highly important in modern international trade theory.”
So, your economic theory advice makes no sense to me.
April 23rd, 2006 at 8:44 am
As EG hints, this discussion of comparative advantage is based on the false premise that it is “countries” that trade with each other. “Countries” hardly ever trade with each other.
Classically, international trade takes place between business entities that are taxed and are subject to the legal and other institutional circumstances of diverse polities.
All this has less relevance when:
1. Much “international” trade takes place between different branches of the same multinational corporation. Transfer pricing enables a disguise of the actual profitability of the activities of these branch offices.
2. Free floating exchange rates make more uncertain the calculation of relative levels of efficiency.
Firms begin making certain products because they believe that they can turn a profit. They continue making those products when those beliefs turn out to be true. Comparative advantage helps to explain past success. The concept does not pattern current behaviour of firms.
April 23rd, 2006 at 11:09 am
One has become three of the thousands. Are all of the thousands here?
Comparative advantage also works all the way down to the individual level. Think about it. What is the difference between a person, producing their own output and a country doing so?
Ernestine’s point 6 is about the only one that makes sense; negative externalities are a problem. That is what government are there to deal with and, as an individual, you are free to highlight this problem to get changes. That process works quite well in developed countries, but the lack of a free press in many underdeveloped countries is a problem that needs to be addressed.
.
The reason behind the “can be” is because there is one case where it does fall down - where there is no difference in the “…ratio between how easily the two countries can produce different kinds of things.” This is a unique, and trivial, case in that is is so unlikely as not to be worth considering.
.
I have a few minutes, so I will deal with each of the points.
EG-
1. It is not conditional on anything other than the ability to trade freely. All restrictions to trade therefore limit its ability to work and therefore reduce wealth. QED.
2. Define ‘fair’. Trade happens between individuals, and so it depends on the individual’s ability to deal. I have found that some of the least educated people can be the best at dealing, so I do not see this as a problem.
3. See my point on individuals above.
4. Why? This makes no sense to me, Surely the gains are more important where the minimum wealth conditions are not met? This is shown by the numerous studies showing the greatest gains are for poor countries that open up.
5. The vast bulk of international trade is not carried on within these firms, but between them, other firms and individuals. Unless you are suggesting some vast conspiracy between all these firms against everyone else, this point is simply wrong.
6. Discussed above.
.
Katz.
1. See above. Transfer pricing is a problem where tax rates are substantially different. Other than tax revenue, there is no other problem.
2. Why do you need to calculate this? The price mechanism does this seemlessly and is dealt with literally millions of times a day.
April 23rd, 2006 at 1:23 pm
Andrew,
you wrote : As we have had this argument ad nauseum before …
Perhaps you should respond, some time, to Greg Wood’s excellent post in a previous thread, “Yet more nonsense on global warming” which comprehensively demolished your neo-liberal case against limits to growth.
Andrew Reynolds wrote : At current projected extraction rates, I think in the 1 to 2 centuries that it takes to exhaust the iron ore resources …
One or two centuries, even if we were to accept your estimates, is a blink of the eyelid in terms of total human history. No-one knows what will replace iron ore, let alone other vastly more scarce materials (fossil fuels) when they are exhausted, so to advocate the continuation of this at current rates, let alone at exponentialy increasing rates is reckelessly irresponsible.
it is economically absurd to suggest that one group of workers should be worth $14.00 an hour or less ($29K per annum) whilst another group on a different part of the continent with roughly equivalent skills should be worth $100K per annnum (let alone the remuneration paid to the HIH directors). The only reason this is possible is the extreme distortion in the world economy, partly as a result of the current minerals export boom which, even in the case or iron ore, will be extremely short-lived in terms of overall human history.
To return to my original point, the advocates of total freedom of of the markets to determine wage rates have been, and are continuing to be, extremely duplicitous towards ordinary Australians. On the one hand they try to fraudulently assert that all Australians have derived benefit from the past and continuing globalisng neo-liberal economic ‘reforms’. One example is the patently absurd claim by Peter Saunders of the (so-called) Centre for Independent Studies that living standards have more than doubled since the 1960’s, (which I believe I demolished in an Online Opinion forum). Another is John Howard’s claim made last year that ‘real wages’ have risen 14% since he achieved office.
On the other hand they tell the Australian workers, such as, most recently, the QANTAS maintenance engineers, that they will need to accept cuts to their wages and working conditions in order to stop the QANTAS managers from choosing, instead, to have maintenace done by Malaysian workers working for far less.
The simple fact is that part of the supply and demand equation is the huge over-supply of labour caused by, amongst other factors, the billion human beings living with no econoimc role.
John Howard, and his apologists on this forum, as much as they try to obfuscate on this point, are more than happy to use this surplus to take away from ordinary Australians what they had come to take for granted in previous generations, whilst further lining their own pockets.
They would happily have them work on-call 7 hours per day evenings, afternoons and days without holidays, workers’ compensation, superannuation, sick pay or meal breaks.
Andrew Reynold’s wrote : The rest is a normal anti-Howard diatribe, and so can be ignored. The man may have faults, but he is not evil - despite the eyebrows. vote for this person?
April 23rd, 2006 at 1:25 pm
Something was lost in at the end of my last post. Here it is again :
Andrew Reynold’s wrote :The rest is a normal anti-Howard diatribe, and so can be ignored. The man may have faults, but he is not evil - despite the eyebrows.
He allowed nearly $300 million dollars of Australian money to go in to the pockets of a regime that he told us in 2003 was such a dangerous threat to the world that we had no choice but to immediately attack that country. It was either astonishing incompetence or worse. Please tell me, Andrew, where you stand on this question. Is such a man fit to be Prime Minister?
Do you actually intend to vote for this person?
April 23rd, 2006 at 2:16 pm
Andrew,
1. Writing ‘QED’ is not the same thing as proving something (you seem to be at risk of practising ‘text’). Apparently, you are not even aware of the work done many decades ago by Australian Professors, M. Kemp and A. Woodland regarding transport costs - not to mention externalities. Professor Kemp has been awarded the v. Humboldt prize. Why don’t you at least read the labels on the axes of diagrams which illustrate Ricardo’s (late 18th-early 19th century) ‘comparative advantage’ trade theory. You might notice that it is assumed that both ‘goods’, which are considered for ‘international trade’, are locally available in the two ‘countries’. Until such time when you provide empirical evidence to the contrary, I maintain the hypothesis that elevators for 20, 30, 50 or more storey buildings are not uniformly produced or used across the ‘global economy’ at present and not for the foreseeable future. For example, I maintain such elevators are not locally available in many parts on a continent called Africa and they aren’t available in central NSW either. You might also notice that the ‘countries’ in these diagrams have no location. Upon reflection, you might notice that the diagrams are the same as those illustrating two individuals swapping say apples for pears over the fence. In other words, the label ‘country’ is substituted for the label ‘individual’. (I developed and used this method of detecting ‘re-labelling jobs’ for the purpose of examinations in my undergraduate time – it worked like a charm because I could reduce the amount of ‘stuff’ to be available for recall tremendously. This was before I considered economics as a serious and important discipline).
2. Wonderful. You now agree with me that Ricardo’s ‘comparative advantage’ trade theory result represents trade between two individuals across the fence and not between geo-politically defined ‘countries’.
3. See 2 above.
4. “Why? This makes no sense to me, Surely the gains are more important where the minimum wealth conditions are not met? This is shown by the numerous studies showing the greatest gains are for poor countries that open up.� I believe you that it makes no sense to you. But there is nothing I can do about it because the literature you advised me to read does not contain any theoretical result where the term ‘minimum wealth condition features. My hypothesis is that you have not read any economic theory where the abbreviation ‘QED’ is used by ‘non-text’ people.
5. “The vast bulk of international trade is not carried on within these firms, but between them, other firms and individuals. Unless you are suggesting some vast conspiracy between all these firms against everyone else, this point is simply wrong.� Andrew, you misquoted me, most likely not deliberately. Setting this aside, I don’t need any conspiracy theory. But one needs more than the economics texts you tell other people to read. We’ve been there before. In desperation, so to speak, I am considering a version of ‘experimental economics’ which involves ‘learning by doing’. On 22 April I wrote an outline what you can do to live in your preferred world (ie one that corresponds to the theory you promote). While being at it, I thought it was a good idea to also allow for the preferences of those who advocate ‘no taxes’ and preferably ‘no government’ and no restrictions on ‘monopoly’. I refer to my post on http://johnquiggin.com/index.php/archives/2006/03/30/rock-against-workchoices/.
Incidentally, the said experiment also provides an opportunity to learn about the distinction between inflation and relative price changes. If there is no other way to learn about the main-stream economic method of knowledge creation and dissemination, involving empirical observations, new theoretical results, empirical tests of hypothesis while keeping a sceptical mind about the certainty of ones knowledge at any time, then maybe this ‘learning by doing what one preaches’ is the way to go.
I have no difficulties with Katz’ points. Knowledge of late 20th century economic theory on incomplete markets is helpful in this regard. Note, the authentic (as distinct from the nonscience-social science ‘text’) ‘QED-literature’, has been translated – at least to some extent – into words and diagrams (eg Krugman and Obstfield’s textbooks on International Trade, available since the early 1990s)
As for ‘transfer pricing’ – it is an assumption on your part that the only reason is differential tax rates. But, before going into this part, lets see how the ‘learning by doing what one preaches’ project is going.
April 23rd, 2006 at 7:33 pm
James,
Please point out Greg’s “demolition” of the case by reference to a single comment. That thread is long and there is a lot of verbage of dubious value in there, including some long comments by Graeme Bird. To link to a comment, use the url under the date and time of the comment. I cannot find any such demolition, but perhaps you believe you have it.
As for voting, I will vote for the person that I believe is best suited of the options. At the last elecion that was him, as I believed that Latham and the Labor Party, were unstable and unfit to rule. The majority of Australia agreed and I believe that subsequent events have further proved the case.
I am not, and never have been, a great fan of our current PM. He is a nationalist as opposed to a federalist and, particularly as treasurer under Fraser, leaned too far to the conservative and anti-free trade positions, where I believe his true sentiments really lie. It speaks volumes that Keating was a more free-trade liberal treasurer than he was. The current attempts to free up the labour market, while an improvement, are far to bureaucratic in nature. I could go on, but you get the picture.
As for the resourses boom - if one to two centuries is the blink of an eyelid then what is the development time period that has taken us from mechanical calculators to the internet? Significant developments happen very quickly and, on current projections, world population will have levelled out and commenced to drop in the two centuries to come.
Ernestine’s comments deserve some more time, so I will deal with them when I have that.
April 23rd, 2006 at 10:48 pm
Andrew,
Perhaps you should have a closer link to my previous post. In it, you will find a link to the post by Greg Wood to which I was referring and to which you had not posted a response.
So, you believe that a man capable of allowing the AWB bribery scandal to occur may be ‘best suited’ to be PM.
Why?
Surely, assuming that you don’t believe him to have been so inept as to have not known what was happening, you must be saying that you are not troubled by the fact that he must have knowingly helped to arm a regime that was a menace to world peace?
In fact, I don’t buy the argument that the Hussein regime, for all its corruption and brutality to its own people, has been a threat to world peace since 1991, and I don’t believe that Howard bought that argument either. But wherever the truth lies, John Howard, one way or another, helped to start that conflict which has cost at least tens of thousands of lives and hundreds of billions of dollars.
I cannot, at the moment, think a single more heinous act committed by any Australian political leader.
April 24th, 2006 at 9:34 am
The last sentence in my previous post should have read : “… think of a single more heinous act …”.
My apologies.
April 24th, 2006 at 10:58 am
James,
Wow. Our PM such a major player in the world. Considering the billions that Saddam made from exporting oil to Turkey and Jordan, that 300 million must have had some real impact.
Back on the main point - of course I am troubled by this. At best, it indicates that the government was less than vigilant (and no-one even put it all into a spreadsheet). It is easy to be wise after the event, however and I am prepared to wait for the enquiry to finish before judgement is passed.
As for best suited - Latham’s instability is now well known, and decried, even by his previous supporters. He is also currently on a couple of sets of criminal charges relating to physical assault - which, of course, we have to wait for the courts to pronounce on. The first (the instability) at the very least would have made him very difficult as a PM. I remain convinced that we (the nation) made the right choice.
As for whether the oil for food program finds, as a matter of fact, that he knew about this, or should have known, lets wait for the report, as we must wait for judgement on whether Latham is a common criminal.
.
BTW, no need to correct for the dropped word, I understood without the correction. We all make the occasional spelling or grammatical error in here.
April 24th, 2006 at 11:32 am
AR
“2. Why do you need to calculate this? The price mechanism does this seemlessly and is dealt with literally millions of times a day.”
But don’t you see that the theory of comparative advantage makes no allowance for the possibility that the relative efficiencies of different industries are subject to change?
If producers organised their productive efforts accrding to calculations made on the following basis:
“What matters is not the absolute cost of production, but rather the ratio between how easily the two countries can produce different kinds of things. The concept is highly important in modern international trade theory.â€?
Then producers would never change what they made and what was traded between producers and consumers in different polities.
The state of affairs assumed by this statement of the theory of comparative advantage is fairly reasonable when environmental and climatic impediments stand between (let us say) Norwegian farmers and a flourishing banana industry. But it is much less so for capital intensive and knowledge intensive industries.
In short, what is required is not a theory that explains and justifies why producers shouldn’t change what they happen to be most efficient at producing at a certain time. What is required is a robust explanation of the circumstances that encourage and enable producers to stop making low value-added goods and services and start making and selling high value-added goods and services.
The theory of comparative advantage tends to do the opposite based on a rationale that is becoming, for reasons hinted at above, less compelling over time.
April 24th, 2006 at 11:34 am
Ernestine,
Let me start by saying that, as you would know, I am not a professional economist. I started in economics and found the partisan Keynesianism of my lecturers unbearable so I switched to commerce. I now work in banking risk management, so reading Humbolt prize winning work is not my usual area. Nevertheless, I maintain an interest in the area.
No problem with your point 1 - as I noted above, and as you and I concur, trade works on all levels, from individuals to corporations to countries and, I am sure that if and when we meet aliens and, if they are peaceful, that trade would work with them. 2 and 3 give similar responses.
4. I am trying to keep this within the confines of a blog comment - but I did not raise the ‘minimum wealth conditions’ point. As far as I can see, you did. Could you please elaborate.
5. As for ‘learning by doing what one preaches’ I do it every day when I catch the bus, walk or drive to work. I negotiate my pay with my employer in exchange for the work I do. I am not a member of a union, so I do it myself. My employer is not incorporated, so the partners of the firm, as owners of the firm, negotiate with me. If I am not happy with the deal offered, I am free to deal with another firm or go and work for myself. I negotiate with our clients to agree a fee for our work with them. What am I doing that I am not preaching?
April 24th, 2006 at 11:51 am
My guess is that you meant to say “What am I preaching that I am not doing?”
April 24th, 2006 at 2:17 pm
Terje,
Looks like my comment on getting things wrong occasionally in blogs is pertinent.
.
Katz,
Of course the theory of comparative advantage makes an allowance for the relative efficiencies of different industries being subject to change. That is the point - relative prices are constantly changing. The relative costs are expressed through the price mechanism. If country A / company A / individual A (pace Ernestine) had a comparative advantage in widget production and the price of widgets (as expressed in terms of other traded goods or services) to A changes then the comparative advantage position will change. The same is true from A’s counterparty’s position.
A then either increases / reduces / eliminates production of widgets depending on whether they can meet or beat the adjusted price.
Correct me if I am wrong, but you seem to believe that there needs to be, or is, some controlling mechanism other than prices, whether expressed in nominal currency terms or in relative good / services terms. There does not need to be.
If your comparative advantage is in producing low value added goods, then that is what you will be doing. If you try to do otherwise you will end up making yourself poorer, not richer.
April 24th, 2006 at 2:23 pm
Or else make yourself richer at a slower rate than what you would have done otherwise.
April 24th, 2006 at 2:59 pm
Perhaps I should have said “poorer than you otherwise would have been”.
April 24th, 2006 at 3:51 pm
AR,
You’ve overlooked the fact that I never said I denied the validity of the theory of comparative advantage.
My comments revolve around the observation that the theory has grown less valuable for prescribing behaviour.
April 24th, 2006 at 4:54 pm
Andrew,
I don’t agree with your interpretation of what I wrote.
You can learn about the conditions under which Ricardo’s comparative advantage result works by going to my post of 22 April on the site http://johnquiggin.com/index.php/archives/2006/03/30/rock-against-workchoices/ , referenced above.
Even casual reading of economic history reveals that the ‘gains from international trade’ are not necessarily distributed between the ‘countries’ (China versus Europe) or among the people ‘within countries’. These are two of my initial points. Another one concerned MNCs. Regarding the latter, Medicci (Italy) and Fugger (Germany) are two of several fore-runners of multinational corporations. They specialised in ‘long-distance trade’. To save space, I’ll only talk about the Fugger clan. The Fugger clan became so rich from international trade that it lent money to the King of Bavaria and graciously tore up some of the debt obligations when the King could not pay. The Fugger clan even had mercy on their ‘workers’, ‘the poor’. They built a little village, part of which is still preserved in the town of Augsburg and is known as the ‘Fuggerei’. Of course, the Fuggers wouldn’t have had to pretend to be so magnanimous and philanthropic, if they would have paid more taxes and paid higher wages to their workers in the first place. [Not sure though whether more taxes would have resulted in the poor being better off, given that the King at the time seemed to have excelled in demonstrating the notion of ‘non-satiation’, on which market economies rely, and there was no parliament and no highly educated population to provide a constraint on his (it was a him) ‘non-satiation’]. (This point justifies my post under the heading of the thread.)
Your job as ‘bank risk manager’ (or any other risk manager) would be redundant if there would be a ‘price mechanism’ such that Ricardo’s comparative advantage theory would hold for economies with technologies a little more complex than that described in the above mentioned site. Chief Financial Officers’ jobs would be redundant too because the financial decision making could be out-sourced to anybody who can put numbers into a spreadsheet and perform a few routine calculations.
I understand Ricardo’s old ‘comparative advantage’ theory was dug out during the early days of the ‘globalisation’ propaganda campaign. We don’t hear much about ‘globalisation’ these days – maybe it is just me who has found an appropriate information filter.
Incidentally, Ricardo’s ‘comparative advantage’ result can be usefully applied in some situations by managers within some enterprises when allocating work among people who each can do at least two things but not equally well. There are potential ‘productivity gains’. Another application in the present context is self-evident.
April 24th, 2006 at 4:59 pm
Andrew,
I don’t agree with your interpretation of what I wrote.
A longer reply is in the pipeline.
April 24th, 2006 at 5:57 pm
Ernestine Gross,
I take it the posts got turned around and that the longer reply is in fact the one you have posted.
I am mystified by how relevant those little Fuggers (or even the Medici) are to this thread. How the gains from trade were distributed when an arbitrary state power sought to gather them to themselves and believed in the tenets of merchantilism are re