It’s time, once again for the Monday Message Board. Civilised discussion and no coarse language, please.
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John Quiggin 
JQ
Will you be supporting the Cowboys this weekend?
I heard this morning that David Hicks might be receiving British citizenship soonish. If he does, and if the Brits push for his immediate release (as would seem likely) I wonder if the Au govt will try to prevent him returning to this country.
And why on earth would the UK give David Hicks citizenship? Unless it’s some automatic right that they cannot stop… As a ‘character question’ they’d have to knock him back.
Ross Gittens on this occasion makes a useful contribution to the debate about industrial relations reform.
http://www.smh.com.au/news/business/unions-cant-be-trusted-on-apprenticeships/2005/09/25/1127586747074.html
Ross is at his best when he educates his readers about the basics of economics.
EXTRACT:-
”
When you see newspaper letter-writers concluding that the plan to have the proposed Fair Pay Commission set minimum wage rates for apprentices and trainees will allow bosses to exploit young workers, it makes you despair of the public’s understanding of market forces.
It seems people can live all their lives in a market economy without gaining any understanding of how demand and supply work. These simple souls seem to believe that, if some tribunal were to cut the minimum wage for apprentices, employers would cry “You beaut!” and slash wages accordingly.
The implication being that employers will always pay the lowest wage the government permits them to. Really? It’s news to me.
We even had someone arguing that if employers cut apprentices’ wages to the extent it’s presumed the pay commission will make possible, they won’t have many takers among young people.
D’oh! Of course. That’s why it won’t happen. The only circumstances where employers might seize the opportunity to cut apprentices’ wages would be where they already had more tradespeople and apprentices than they needed, and far more applicants for apprenticeships than they could accommodate.
“
Terje, that lesson for the allegedly simple minded would be fairly easily tested.
In the great days of apprenticeships a generation or two ago, there was also a free market.
Did employers pay above award through those high-demand post WW2 decades?
If they didn’t, how would you explain it?
Wilful
I understand that David Hicks’s mother was born in the UK, providing for automatic granting of UK citizenship to him. There’s a report in the SMH about it, and possibly the other papers too.
Not sure that he’d necessarily fail a ‘character question’ anyway. Not yet, at least.
Glenn Milne’s continues his propaganda exercise in today’s Oz re Israel and the ALP. To seriously suggest that the ALP is anti-Israel is about as logical as suggesting Howard is violently anti-Bush.
Read on:
http://antonyloewenstein.blogspot.com/2005/09/same-old-story-rehashed.html
Tony Blair does a U-turn on the Kyoto protocol. He no longer support it:-
http://mathaba.net/0_index.shtml?x=367088
Mike: Did employers pay above award through those high-demand post WW2 decades?
If they didn’t, how would you explain it?
Response: If they didn’t then the award was evidently equal to or above the free market rate. In other words the minimum was pushing up wage prices.
David Hicks’s US Military Attorney, Major Michael Mori, discovered Hicks’s British claims to citizenship in the context of discussing the English Ashes win over Australia.
It seems that Maj. Mori is a cricket fan!
How many US Military attorneys have any knowledge at all of cricket?
Does this huge coincidence have the status of a “force majeur” in this bizarre and dishonourable story?
If Hicks had replied that he was barracking for Australia, what chance that a text message from Warney to Howard might get Little Johnny to come across for David Hicks?
There are many astounding things about Major Mori. And somehow, I don’t think he’s going to spend a lot more time in the USMC at the end of this mock trial.
Major Mori is indeed interesting.
But couldn’t the argument be put that it bodes rather well for a much maligned system, that an advocate such as Maj. Mori is prepared to be so forthwright in defending his client. Last time I lloked he was still employed by the Marine Corp.
Terje,
go to wikipedia and look up the articles on “monopsomy” and “consumer surplus”.
“I understand that David Hicks’s mother was born in the UK, providing for automatic granting of UK citizenship to him.”
It’s not at all “automatic.’ He’s able to apply because of his birthdate in relation to his mother’s citizenship, but he’s by no means guaranteed approval. The process – as the Brits advised today – takes 6 to 12 months.
” A Fair Pay Commision” for all ,says John Howard.
When he is prepared to bring in the C.E.O’s ,into the fold,he might have more respect.
The Gittins story was a load of crap. Sometimes he writes interesting stuff, but mostly he’s embarrassing.
I’m not sure what his underlying beef is, here, but his arguments are just silly. He’s mixed in a bunch of stuff:
a) lowering the minimum wage won’t affect things, because demand exceeds supply.
b) unions set apprentice wages artificially high to protect the jobs of existing tradespeople.
c) unions won’t allow mature age apprenticeships, again, to protect the jobs of existing tradespeople.
He offers no evidence in support of this crap. The facts are that apprentice wages are pretty freakin’ low already. A first year apprentice in the building trades in NSW can expect a minimum of about $231 per week, as opposed to a tradesman’s minimum of about $660 per week (from the same link).
The link also shows that there is specific provision for adult entrants, indeed with a higher rate (about $100 more per week).
A pox on both Howard and Gittins.
Ian I could not find “monopsomy” at Wikipedia. However I found it elsewhere.
Are you suggesting that there is only one employer in the labour market?
It’s spelled “monopsony”.
The related relevant term is oligopsony.
Here’s a hypothetical for you. Hicks has difficulty getting UK citizenship as he has to apply in person. Then he forfeits Australian citizenship as he is deemed to have relinquished it merely by applying for another citizenship. Finally, he becomes stateless (and yes, I know there are rules against that being thrust upon anyone).
By the way, recent ISP upgrades are preventing me downloading all of certain pages, and this affects my accessing the ends of some JQ pages. I may not be able to interact properly hereabouts until the ISP comes through with configuration options to make their upgrade work effectively.
PML,
The requirement to drop your Aus citizenship when you apply for others was dropped in 2001. Personally, I think this is a good move for him. I think the government’s attitude on this is woeful. Maybe the UK will do a better job. BTW, I do not think he is entitled to UK nationality – if your mother was born before 1980 descent is only through the father unless you were born there. Worth a try, though.
BTW, reports now coming out in the US indicate that the violence and death in the New Orleans Superdome reported were mostly rumour and overheated supposition.
The 200 bodies? The roaming packs of rapists? the murders? the raped babies? the victims tossed from the top of Superdome? the “five nights of terrifying violence and depravity” that the Aussie tourists suffered through? “Ninety-nine percent bullshit” says one soldier on the spot. Too late too make any difference to people’s perceptions though-I’m sure that for most the story they take away will be “aren’t those people horrible.”That is sad.
The government’s attitude on Hicks has been woeful? Absolutely, he should have been shot years ago.
SJ is correct on the spelling.
Oligopolies and oligopsonies tend to act to act similarly to monopolies.
There’s a whole branch of economic theory that deals with oligopolistic competition.
another perspective on the same issue: An employer knows that if he pays salary A he will attract X number of apprentices who in turn will provide him with .9x tradespeople 2-3 years down the track. He also knows that if he pays .9A he will only attract .9X apprentices leading to only .8X tradespeople.
Assuming he needs .9X tradespeople, he should pay salary A right?
Maybe. On the other hand he could hire no apprentices and pay a marginal above-market rate for tradespeople, effectively capturing the return from the investment other employers make in training apprentices.
Assuming a sufficient number of employers adopt the second strategy, the supply of apprentices will declien and wages for tradesmen will rise – but individual employers will be reluctant to increase their apprentice salaries because they need to remain competitive with the employers who aren’t hiring apprentices.
But that assumes that all employers are beggar thy neighbours ‘rational’ economic actors, with perfect knowledge, and that apprentices are totally useless.
Another view on the hurricanes in the US.
So now, after Rita, four out of the five worst hurricanes in U.S. history–in terms of insured losses–have occurred in the past 13 months: Katrina, Charley, Ivan, and Rita. What does that tell you? “Hey, like wow, man, we’ve had some really bad weather lately.” Well, yes, that’s true. “There’s global warming?” Possibly.
But how about this? More and more party people are choosing to live on the southeastern coasts. That means more homes, more stores, more electric lines, more cars, and more ice cream trucks. More everything! Also, the oil and gas business, never mind chemicals, too, has expanded greatly in the gulf over the past 20 years
Wilful,
No, it assumes that enough of them might be rational “defectors” to make “defection’ the rational procedure for all participants.
Similarly, in the absence of pollution laws it only takes a handful of firms skimping on pollution control measures to threaten the economic viability of any firms acting responsibly.
WORD OF THE DAY: oligopsony
Ian, are you suggesting that there are only a few employers in the Australian labour market. As I understand it over 50% of people work for a small business, implying that there are many, many employers.
Terje,
It many also be halpful to point out that, in the heavily unionised industries like construction, the union effectively acts as a monopolistic supplier of labour. The same could also be considered true where the award conditions are above the going rate and are rigidly enforced – a fairly frequent occurence (IMHO).
Terje – the majority of “small businesses” are self-employed individuals who never have and never will employ anyone else.
The labour market is actually a series of loosely connected markets with limited flows of resources between them. If one wants an apprenticeship in, say, bricklaying the number of employers offering apprenticeships in plumbing is likely to be of secondary importance. (This is especially true if one has already completed part of an apprenticeship in a particular field – some component of the training is likely to be a sunk investment not transferable to other ifleds.)
Andrew – technically unions in that situation act as rentiers rather than monopolists. They don’t actually supply the labor they just extract an economic rent from suppliers and purchasers.
Ian,
OK, so technically the workers themselves are the monopolists. They have constructed a cartel of labour by collectively bargaining through a union.
Ian,
I agree that this is the situation technically – but on a practical level if you are able to allow or disallow anyone from working in the industry (by giving or withdrawing a union card) and can effectively set the wages and conditions under which they work you have moved beyond being a rentier.
ab,
Yes – but given that the employers did the same thing and did it first, you can hardly fault the workers for trying to get soem degree of parity back into the situation.
regarding hicks’s citizenship bid: the UK has some very odd laws on citizenship. a friend of mine has a British father, but since she is illegitimate (her parents were married when she was born – just not to each other) she isn’t allowed to become a citizen on merit of her father’s blood.
weirdos.
This is a day late, unfortunately, but I was just reminded that yesterday is the 22nd anniversary of the non-destruction of the world.
Three cheers for Stanislav Petrov!
“if you are able to allow or disallow anyone from working in the industry” – can you please point out the industry? No ticket no start disappeared many moons ago comrade.
Also can you point me in the direction of one of the heavily unionised industries where the union supplies the labour? I would love to get in on that racket – union organised labour-hire!
I would also suggest that “going rates” are above the (minimum) award rates and that rigidly enforcing what a worker is entitled to and has bargained for is what a union is a formed for, and why a worker chooses to join one.
The major buyers of labour that have a near industry wide monopoly position would be in the government sector. ie teachers, police, nursing. However even these have many dispersed private sector alternatives.
When Optus first started a number of Telstra employees suddenly found they had an alternative buyer for their skills. Many traded in their old job for better conditions. I think if we had more of a market in teaching and nursing that those within these professions would be generally better rewarded.
It is true that there is some sunk cost associated with an apprenticeship half way through. However at the entry point to the profession there are many alternatives and people will no doubt choose with an eye on what those already within the industry are earning.
The closest I can see to a private sector monopoly buyer situation is a coal mine in a remote community. And even that assumes that people are unwilling to move. And the reality is that people in these industries are incredibly well paid.
I suspect that the issue is more a theoretical problem than a real one. If a profession really offers crap pay then people will retrain and move professions.
It may be worth exploring the conflict of interest that those within a profession have in determining the length of apprenticeships.
And would anyone like to take a guess at which groups of employees are most heavily unionised in Australia? Teachers, Police, Nurses. Coincidence maybe? Don’t think so.
There already is a market. Teaching and nursing are both high mobility professions. Where do you get the idea that “if only we could bust the unions, pay would be higher“? It makes no sense at all.
QUOTE SJ: Where do you get the idea that “if only we could bust the unions, pay would be higher�? It makes no sense at all.
RESPONSE: You have put a comment in quotations as if it is something that I have said. I never said that unions need busting. Where did you get the idea that I think unions need busting?
For the record I don’t generally think unions need busting.
What I was infering was that if schooling was for instance provided by a multitude of competing private sector buyers of teaching labour, rather than dominated by the state sector, then maybe individual teachers would have more pricing power. Dito for hospitals and nurses.
If there are any monopoly buyers in the labour market they are mostly governments.
lurch,
If you think ‘no ticket no start’ disappeared many moons ago, try looking at most Perth building sites.
.
SJ,
In teaching, at least, there are many purchasers of teaching services – the private schools compete for teachers with the government schools. Guess who pays more? The (non-union) private schools. It is probably because they pay more to get better staff. This is not proof of the point either way, but may be taken to indicate that, if freed from government control, there may be an improvement in both the pay and quality of teachers.
Andrew
First point on teachers is that private schools do have a union, albiet a weak one. Also their salaries don’t happen in a vacuum, they may be over and above what is the determined union rate, they may then be getting a free ride. Finally the increased salary is seen as a way of compensating for higher demands on teachers for extra curricular activities like coaching and clubs.
Not to say that a pay increase under a union or non-union circumstances would be unwelcome.
Er.. Elizabeth: Maj Mori is a serving officer in the US Marine Corps, he is not “employed” by the Corps. (Pedantic outburst for the day) 🙂
McD: Even if Hicksy is declared a pom & released to Australia, his reception may not be all that warm. Mamdou Habib is clearly a man with much to hide, & when exposed to the public as a free man (press, TV etc), it may transpire that David Hicks inadvertently reveals himself as a far from innocent party. As one who carried arms (irregularly) against his country, the mere fact that return to his country does not mean manacles & a swift trip to the gallows makes him an extremely fortunate young man.
Whilst in US custody he is at least physically safe, except perhaps from the occassional lost sleep during questioning & maybe some low IQ sniggering at his genatalia. As a man walking the streets of Australia he may find there are some in the Australian population with a very fixed view about those who carried arms against us, & he may wish he was back safely in custody at camp X-ray.
“Carried arms against us”?? Listening to too much propaganda I think.
test
Wilful, hicksy was not taken into custody wearing a slouch hat or any other aussie uniform, he certainly wasn’t one of ours. He made his bed, he can lie in it.
I think what most of us want to see, Steve at the pub, is an actual trial with actual evidence. You’re just having a wank.
Fantastic idea SJ, lets send him to Afghanistan to be tried under the reign of the recently legitimately elected Afghan government. After all, THAT is where his alleged crimes were committed.
As for wanking, do I detect some jealousy from you that I am able to get my hands on something longer than a smartie?
Count me in with Steve as one of those who’d like to see Hicks shot like a dog.
When you say “most of us” you really mean “people who think like me”. Recent election results would suggest that most people who comment here hold views that are in the minority in Australia.
I think Hick’s chances of living a long life in Australia are very slim indeed. But then, I haven’t lived all my life in a sheltered latte oasis.
Here is the immediate future of Australia. Steve at the Pub and Yobbo with their sweaty Turner Diaries fantasies. Fake tough adolescents and yes Steve wankers.Little boys pretending to be grown ups.
>When you say “most of us� you really mean “people who think like me�. Recent election results would suggest that most people who comment here hold views that are in the minority in Australia.
So the 51% of the population who voted for the Coalition are automatically assumed to support summary execution without trial?
“So the 51% of the population who voted for the Coalition are automatically assumed to support summary execution without trial?”
Given the reported public reaction to the ‘bali nine’ case obviously not….
Which of this idiot’s fellow prisoners has been summarily executed? I obviously missed that news item.