Writing in the Oz, Alan Moran begins a case for wage cuts as a response to recession with the claim
Until the 1930s, recessions tended to be short and sharp, and financial ruin was largely confined to the speculators whose exuberance had diverted capital into ventures where it was less than productive.
Much the same assumption appears to underlie the thinking of those who propose a return to the macroeconomic policies of the 19th century, such as the gold standard. Economic statistics for this period aren’t exactly comparable to those available today, but, such as they are, they don’t support the claim. In the US, for example, the longest-ever recession, according to the National Bureau of Economic Research was that of the 1870s (following the Panic of 1873, which in turn followed the US shift from bimetallism to a gold standard). As the NBER data shows, 19th century recessions commonly lasted for more than a year.
In Australia, the long and deep depression of the 1890s, and the substantial wage cuts imposed during that depression (with employers getting the full backing of governments) were a major factor in the formation of the Labor Party and the shift to a parliamentary, as opposed to a purely industrial strategy, for the labour movement.
John Quiggin 
But Ian did qualify that post at 94. Now I have to go and look up contributions to GDP by industry sector Dagget. I cant remember everything. I saw the graph yesterday re finance.
daggett, it’s true that people receiving unemployment benefits are often put through the wringer.
But it must also be considered that only a minority of working-age welfare recipients are actually on unemployment. For people receiving payments like disability or single parent benefits, there is virtually no obligation attached to the payments.
Daggett#95 Actually I need to correct my comment. Its called finance, distribution and other services so it is bigger than just finance and it includes wholesale and retail trades (read the blurb under the graph).
here is the link on industry shares over time
http://www.abs.gov.au/ausstats/abs@.NSF/Previousproducts/1301.0Feature%20Article212005?opendocument&tabname=Summary&prodno=1301.0&issue=2005&num=&view=
Returning to the BCA paper.
Commonwealth expenditure per person increased from $6.000-12,000 between 1962 and 2006.
Major areas of increase in expenditure:
Defence: $300 to $600 – up $300(100% increase)
Education – $100 to $700 up $600 (600% increase)
Health – $200 to $1800 up $1600 (800% increase)
Social Security $800 to $4,000 up $3200 (400% increase)
These four areas account for more than the total increase in expenditure per capita – in other words,expenditure per capita on all other Federal government functions in toto has either been essentially constant.
Within the social security portfolio the largest expenditures by far are the aged pension and the family tax benefit.
http://www.treasury.gov.au/documents/1239/HTML/docshell.asp?URL=06_Appendix_A.htm
The principal driver of the increase in aged pensions has been the increase in the over-65 population.
Reported expenditure for pensions increased significantly in 1997/98 However this was due to pension increases to offset the impact of GST on pensioner incomes. Effectively churn increased but actual government expenditure didn’t – the increase in pensions simply covered the higher consumption taxes paid by pensioners.
“Ian, I never claimed that every specific figure I quoted was a self-evident fact. I merely claimed that the more general reality that the welfare state has been increasing significantly in the past few decades is a self-evident truth.
Hence, your comment @ 97 is an irrelevant snark.”
So you have no evidence to support your colaim and it’s “irrelevant snark” for me ot ask for one?
I’ll pass on the invitation to do your homework for oyu since I’ve spent the past several hours researching the claim by Alana that I’m spreading false information when I say federal spending on tertiary education has increased.
To return to Federal expenditure on tertaiary education.
At 75 I wrote “- more expenditure on higher education because more people are attending unis and TAFEs”.
Alana claimed this was false.
Note please that I didn’t say Federal spending had kept pace with the growth in student numbers or technology needs.
Nor did I make any claims about academic salaries.
Click to access financing.pdf
Per capita public expenditure per student has remained roughly constant since 1973 while student numbers have nearly tripled. Total expenditure has roughly tripled in real terms while falling slightly as a percentage of GDP (refer tables 7a and 7b)
These figures are up to 1999, anyone who wishes to provide more current figures is welcome ot do so.
As a result of the increase in student numbers, the percentage of Australians with tertiary qualifications has more than tripled.
Click to access 01cib04.pdf
The increase in real per capita government spending over the period 1962 to 2006 works out to approximately 1.6% per annum (compounding).
Does anyone have an figures for the growth in per capita income over the same period?
Re at 75.
That the point I was making (I explained in a post underneath – not false Ian – I meant just not proprtional – sorry). The funding has not kept pace with the growth in student numbers and nor has academic employment numbers.Per capita remaining constant since 1973 is in fact a decrease in funding when a higher proportion of youth are coming through the door.
Ian#107 that question is answered in your link. Where you got the 1.6% per annum growth in per capita government spending on higher education from. In context it becomes clearer so I will just paste the full quote from your link. Refers to higher ed sector of course.
“To get some idea of the potential pressure which growth in this sector put on the
public purse, it is instructive to take expenditure per capita in 1975, and index it by
the growth in participation and growth in real earnings4. In this hypothetical
scenario public expenditures would have increased by around 80 per cent between
1975 and 1996. Interestingly, public higher education expenditures as a percentage
of GDP would have been virtually unchanged over the period at around
1.6 per cent of GDP.
Id call that overcrowding and underinvestment.
Thanks for those figures. Alanna. Even given that the finance sector is only a component of the 50%, the figure still seems massively bloated, especially compared with levels of well under than 35% prior to the 2nd World War.
Whilst much of what is categorised as services may be necessary, the fact that it has gone up so much in size in comparison to the sectors which actually create wealth in any sense (including mining) seems to me to be yet another indictment of laissez-faire capitalism.
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Nick, I consider the treatment of the unemployed to be wanton sadism on behalf of the most spiteful, malevolent and incompetent Government, this country has ever known, namely the Coalition Government of John Howard.
After working extremely hard for two years at the ANU, I lost my job because of a combination of penny-pinching by the Commonwealth Government and cynical politics on the part of my co-workers.
Had I then simply been allowed to get on with re-skilling and applying myself to obtaining a job in the IT job market, largely destroyed by ‘race to the bottom’ off-shoring and awash with imported professionals, I just might have pulled through and got back into the industry.
Instead, I had to cope with the wanton legislatively mandated harassment by Centrelink and eventually made to accept unskilled work. The skills I had gained painstakingly are no longer considered current by potential employers.
(It would also have helped if my former manager had bothered to tell me that the application I had implemented over two years had been successfully used, amongst others, by Canadian Masters IT student, instead of gathering dust as I had been led to believe, but that’s another story.)
Ian#
There are lots of arguments for whether the mix should be private or public funding but at the moment I am biased to public. I think the students could do with a better deal right now (with rents the way they are – many are finding it tough and yet we need always need skills). Its an investment in human capital. You also have to consider students coming out of uni with HECS debts. Does the debt them more risk averse and prone to safe wage jobs to pay it off (less entrepreneurial) – and does it put them behind when they could be working towards saving for a deposit? Also universities are job generators at a time the jobs situation is not looking great.
“Ian#107 that question is answered in your link. Where you got the 1.6% per annum growth in per capita government spending on higher education from.”
That’s 1.6% increase per annum in total per capita government expenditure not in education spending.
Ian#112
That 1.6% is not total per capital government spending at all. You put the link there and Im reading it. The 1.6% growth is referring to a hypothetical situation is still discussing higher ed public spending growth (which is nowhere near student growth anyway) and its hypothetical as far as I can see. Best to get the real numbers.
I dont think this article is that well written actually.
As a percentage of GDP – public expenditure has been declining since 1986 (see figure 6) and
as quoted from this;
Figure 7 ( which isHigher education expenditure as a percentage of GDP) showed the level of public expenditure over time as a proportion of GDP. There has been a clear downward trend since
the middle 1980s suggesting that public expenditure will grow more slowly than
GDP.
My comment: Why should declining government expenditure as a percentage of GDP signal further reductions in the future?? It should be cyclical at least – not “its trending down so it will continue to trend down”. The level of spening is a policy setting or should be.
The other issue here is, if unemployment rises over the next few years many more schoolleavers will likely seek to go on to higher ed or Tafe. Now is the time the government should be waiving fees and opening the doors. If people are ageing also and more resources are needed for health – then the general idea is that government gets bigger when needed even if it means going into deficit, and smaller when not needed. Good old fashioned intervention and fiscal policy even if it means a deficit. I personally think if it had not stripped public sector employment quite so much over the past two decades it might have had a bigger tax base, and less of an unemployment problem draining welfare monies, to draw on now.
The idea that the government should always be lean and mean is all wrong.
Public sector debt has fallen, corporate sector debt fell over the past two decades – private sector household debt went through the stratosphere. What does that suggest. I think it suggests both the corporate sector and government have been shifting too many expenses to households (both in prices in concentrated industries with little choice aka supermarkets and in government user pays charges eroding household incomes) and that will come back to bite both of them because fewer people have reserves to now fall back on.
Alanna’s suggestion of removing barriers to education is a good one. However, I would not be confident that it will be taken up willingly by this Government.
As I have said before on this site, people need to read Naomi Klein’s “The Shock Doctrine” of 2007.
It shows that the ruling elites could not care in the least about the harm their policies cause to our economy as long as they can find ways to make others pay the price.
Thus, US taxpayers are paying for the recklessness of Wall Street investors over recent years with endless bailouts and, sadly, it appears as if this will continue under the new Obama administration.
So, the Australian ruling elites will happily skimp on education for a few more years expecting that they can once again use immigration to meet their skilled labour needs when once the economy picks up, just as happened in the Howard years.
Reading the Australian in recent days shows some of the ways that Murdoch would like to see ordinary Australians pay for the recklessness of his mates in Wall Street. Note the stream of articles which call upon the federal government to dishonour its election promise to repeal “Work Choices” including “Julia Gillard defiant on jobs as business asks for a rethink” – a most curious definition of ‘defiance’ I would have thought, only possible inside the parallel version of reality which inhabits the minds of Murdoch journalists.
Australians hardworking people will be paying for people who gambled companies into a black hole too. At least I wont have to listen to Tony Abbott saying “people who are unemployed are either lazy or on drugs”. No Tony – they are going to hardworking skilled financial markets employees – ordinary people dropped on the street by a crisis of poor economic management….yet
Did you read about the sellor of subprime mortgages in todays SMH in the US. Very interesting. At first he was just an ordinary mortgage broker running his little business but all around him rivals started cutting the minimum standards for loans in a race to the bottom and he found the only way to stay in business was to keep dropping his standards…he recalls thinking one day when he had just signed up a loan he knew would be bad thinking “what am I doing…” They didnt even make the first payment.
Daggett# 116 Translate Murdoch defiant on profit
Id like to make one comment about what I think is the quality of our economic direction since the 80s ie terrible). Id like to thank JQ for letting me exorcise 10 years of demons about the direction we have been heading in and continue to head in and Im waiting for the change we need. The direction has been predicated on the notion of competition and the supremacy of markets to deliver the best outcomes for all (and dont misinterpret me – I like markets, I like well run and well planned markets – not anything goes markets). From my recent post on competition faced by one seller for subprime loans makes the point that we really dont know the meaning of the word competition at all. For example, over the past decade how many times have we heard that executives needed to pay themselves rewards that most of us couldnt even get our heads around “in order to be competitive” yet they also tried with compliant governments to force wages down in the most unfair way through vehicles like workchoices where bargaining power is inequitable and remove the basic rights (and money) of people at work, in many cases in low paid jobs already, these rights established over many decades. “In order to be competitive” so the saying went, and under this premise Howard gave the powerbrokers workchoices and the electorate duly got rid of Howard. So one persons remuneration needs to rise to ridiculous and blatantly greedy heights “to be competitive” and another persons go down to the bare minimum to survive “to be competitive” and thats OK is it? No – back to the need for balance. Subprime loans were sold everywhere “to be competitive” and it brings about a global financial crisis. I suggest the very word competitive has no meaning whatsoever.
Whilst I think Alanna has made some good points in her previous post, I still think she is still far more deferential to the concept of competition than is warranted.
I think it is far more natural for humans to cooperate with each other than to compete and much more is likely to be achieved that is enduring in that way.
Whilst defenders of competition would point to the spectacular technological progress that has been made over the past two or three centuries apparently through competition, particularly during times of its most extreme form, namely wars, this ignores the cost incurred in destruction of non-renewable natural capital.
If humans had worked cooperatively over the same period of time, I think whilst it is highly likely that today our technology would, in many regards, be somewhere around the level attained in the late 19th century, our rainforests, fisheries, water supplies and reefs would be in a vastly more healthy state. Furthermore, our reserves of fossil fuels, rare metals and other non-renewable resources would be vastly less depleted and we would not be facing the threat of global warming.
In short, humankind would have achieved a far more enduring form of progress and would not be headed towards the precipice as it is now.
Perhaps competition might still have a role to play in a decent society, but I think its extent is likely to be much less than even many strong critics of laissez-faire capitalism would imagine.
Alanna, you point out that public expenditure on education has declined since the 1980s as a percentage of GDP.
But it seems that this would be an obvious consequence of the aging population and falling birthrates. The proportion of the population likely to be at either school or university would decline. As birthrates began falling significantly around the mid-1960s, by the mid-1980s one would expect the proportion of the population in the age group likely to be attending university to also start falling.
And as the population ages, this would lead to higher expenditures on health care. If some sectors of the economy (like health, aged care, welfare spending) are increasing as a share of GDP, obviously other areas will need to fall as a proportion of GDP.
But if you look at total welfare state expenditures (health, education, and welfare), they have actually increased quite heavily since the 1960s.
I’m having some real difficulty reading this web page for some technical reasons. However I did note one comment that I’d like to set straight. Daggart says I have been banging on for years about the bloated public sector as if there are too many public servants. This is probably a correct inference but it isn’t my primary charge. My primary charge is that government costs too much.
I realizse alot of dicussionhas gone through now. All i am saying is that just because the governement has to take it on it self to provide jobs does not mean you don’t have to be choosy about what jobs will be created.
Nick#121
Nick – you said “Alanna, you point out that public expenditure on education has declined since the 1980s as a percentage of GDP.
But it seems that this would be an obvious consequence of the aging population and falling birthrates. The proportion of the population likely to be at either school or university would decline.”
Nick, its not obvious – you need to measure the percentage changes in the birth rate over time and the ageing over the same period. You cannot assume this is obvious at all. Then you need to compare it to the percentage increases in high ed participation by students. As I said before higher ed participation has been increasing by between 3 to 4% from the mid 1980s. Yet higher ed expenditure has been falling as a percentage of GDP.
If you want to make an argument for lower government spoending on higher ed on the basis of the brith rate or ageing you need to measure the percentage changes in these to argue there is a case for reducing higher ed spending and I doubt you will find either changed at the rate of between 3 and 4 % a year on average over that period.
Even in your own link you can see that in 1980 we had 300,00- students and as at 1995 (14 years ago) we had 658,000 students. Did the population double between 1980 and 1995? Then there is no way that either ageining or birth rate could have changed by those same percentages.
The government has reduced higher ed funding significantly at the same time as there has been enormous increases in students. It is a partial privatisation model Nick whereby unis have had to rely increasingly on foreign students paying full fees and domestic students paying HECs. Its a move to a user pays system.
#Terjep. I understand what you are saying Terjep in terms of cost of government – I would rather have an additional one hundred nurses on 50,000 a year than another layer of 33 suits at 150,000 per year on committees telling nurses how to do their job .
Matrons use to do the adminstrators job just fine and the Chief Medical Officer used to run the doctor side just fine (although the interns were often arrogant and sometimes prone to mistakes and reluctant to listen to very experienced ward sisters) – the system worked along military lines – nurses were trained in hospitals using direct bedside experience (no better teacher) and it worked well but they completely messed the hospital systems up when they removed nurse training to universities and installed bureaucrats to tell doctors and nurses how to run hospitals. What they should have done was install bureaucrats to monitor the increasingly concentrated nature of the pharmaceutical industry and its growing monopoly power within hospitals concerning the supply of needed equipment, drugs and disposables. The government should have been investing in the creation of alternative supplies (many sterilised disposables would be that hard to produce locally) alternative sources, monitoring purchasing contracts granted to the Eli Lilys, Pfizers and Roches and the ATO should have been looking more closely at hospital supply, because a lot of profit has been made in Australia but tax wasnt paid in Australia because it went straight out of the country hidden in transfer payments.
Instead they compensated by cutting beds and staff and with a growing population, hence the mess we have now.
Nick#121 – I must correct another point you made as follows
“But if you look at total welfare state expenditures (health, education, and welfare), they have actually increased quite heavily since the 1960s.
”
You have this information in diagram 6 in your first previous red link Nick. I dont know where or how you are claiming it has increased drastically since the 1960s. Total public expenditure “welfare – ie health, social secuity, schools and Tafes in diagram 5 and there is something missing and that is higher ed but diagram 6 is the approx total (public “welfare” as you classify it) and it has been declining as a percentage of GDP from 1983 to 1997 where your graph ends.
Nick – you should post your sources or links for this type of statement (you can find numbers in the ABS you know and better to find your own numbers than take someone elses at face value).
Terje wrote, “Daggart(sic) says I have been banging on for years about the bloated public sector as if there are too many public servants. This is probably a correct inference but it isn’t my primary charge. My primary charge is that government costs too much.”
Whether or not the numbers of public servants are Terje’s primary concern, a consequence of the of the widespread propagation of these views is that the kind of employment opportunities that were available a generation ago are no longer there. Consequently as I have pointed out this has effectively consigned large numbers of people who would otherwise have been gainfully employed to unemployment or low-skilled jobs with no career path.
I have yet to see Terje demonstrate any concern about this human tragedy other than to assure us that when the extreme ‘free market’ nirvana that he advocates is achieved, all will be fixed.
Of course, until that is achieved any problems will be blamed on whatever residual amount of government intervention remains.
—
As Jill Rush and Allana have shown, the wider public has suffered because governments no longer provide the services they once did.
It seems to me that cost of public service of which Terje complains has much more to do with ‘free market’ ideology invading the public sector than with governments trying to perform a useful function.
Also, has anyone analysed how much supposed public spending is simply handouts to the private sector?
I remember reading of the NSW ‘Labor’ Government’s fire sales of office blocks in which state government departments were accommodated in the 1980’s. Then a few yeas late — surprise! surprise! — the cost of rent and the inconvenience of NSW government departments having to constantly relocate at the end of leases became a serious problem as I read in a Sydney Morning Herald article.
In more recent years, the Howard Government engaged in similarly idiotic sales and lease-back arrangements of government-owned buildings, particularly defence buildings.
How much additional public money is being paid as rent compared to what used to be paid?
Also, as I pointed out above, much of the so-called expenditure on social welfare is nothing more than subsidy for private landlords. Much of the social welfare budget was also squandered on the Howard Governments grotesquely inefficient privatised jobs network.
If all the money wasted in these ways was truly spent on public services, I think people would be happy not only with the current levels of public expenditure, but even increased levels of expenditure.
I agree re the Howard governmnents privatised model of Centrelink agencies like Mission Australia. In reality many were a sham – claiming public subsidies for running one hour or one day courses that the unemployed could attend in their offices (training – yeah right) but still not placing people in jobs because they made more money out of keeping them coming back for more “training.” That whole privatised system of job placement (and of course now that less jobs are forthcoming the private agencies are all crying for public bailouts) is a joke and was far better run in the hands of the public sector.
Unemployment services and placement of the unemployed is a public good and should be run by the government everywhere. The private agencies are a joke – agree 100% Daggett.
The problem is that the government needs to heed Japanese managemnt styles of a flatter base to provide more services as broadly as possible emplying as many as usefully possible and a flatter management style with less layers of ineffectual bureaucarcy. Since the 1960s it has done the opposite. Sacked the broad base of servive employees at the bottom and created narrow pyramidical hierarchical structures that have resisted employing people at the bottom and worked to ensure their own salary benefits and superannuation are maintained at the hierarchical levels. In other words a cone shaped structure that delivers very little real services to either individuals or businesses anymore. In one sense Terjep is right – why pay for their inefficient management layers when they are managing no-one?
I agree with Alanna on the changes that have reduced on the job training for nurses has made the situation vastly worse. It seems to me that the principle motivation was to avoid paying nurses a wage whilst they were being trained and to be able to sell off the accommodation that used to be provided to them. (Whether it was free or very cheap I can’t say).
For bizarre reasons, I still can’t understand, the nurses unions went along with this in the 1980’s. They seemed to imagine that by forgoing at least three years of wages and paying HECS that this would enhance the status of the nursing profession. All it seems to have done is reduce the supply of nurses and reduce the quality of their training.
Back then we had a system, which whilst it may have had its flaws, worked well on the whole.
However, then, as now, we were expected to embrace change for change’s sake, without stopping to pause to contemplate what we may be throwing away.
—
The other folly of the time was the closure of institutionalised psychiatric care under the warm, fuzzy, feel-good justification of ‘deinstitutionalisation’ which has simply left many people who would have been cared for properly now languishing on park benches or boarding housings, where they have not been closed down.
As a psych nurse who worked under the old system put to me, ‘deinstitutionalisation’ was a scam to break the power of the psych nurses’ union and to allow corrupt state governments to sell off valuable real estate to developers.
Sadly many ‘bleading heart’ leftist types fell for it at the time and helped propogate the lying rationale of ‘deisntitutionalisation’ to the wider community.
‘deinstitutionalisation’ was not a bad idea – it was an example of a reasonable idea being exploited by governments to further ends that had nothing to do with the giving of care. It could have been tested across a defined and monitored population with proper funding to see if there were benefits over and above the existing institutional care systems. It wasn’t.
The folly of the ‘bleeding heart leftist types’, then as now, was to believe that Labor governments were of a similar mind to themselves and actually cared for the disadvantaged as something other than a marketing tool and easily exploited supporter base.
nanks,
I don’t see a huge amount of difference between us, but shouldn’t ‘deinstitutionalisation’ always have been an option for more mild psychiatric cases where there were people in the community able to care for them?
There was no reason to shut them down wholesale and force them onto the streets, whether or not suitable care was possible in the broader community.
What was not understood by the ‘deinstitutionalisation’ ideologues was that many in psychiatric institutions enjoyed self-esteem and a sense of purpose through, for example, being able to grow food for themselves and for others.
—
BTW, I have on more than one occasion been forced to share a roof with people who should have been in instititutionalised care, so, to some degree, I am speaking from direct personal experience.
“How can you say it has fallen over fgour decades and when the rate of underemployment (yes underemploymnent and casual positions accounts for less of a weeks work for many). To claim it has fallen for four decades is a nonsense.”
I’m not, I’m claiming it’s fallen over the past decade at the same time as Federal government expenditure on social security has expanded rapidly.
That rise is due primarily to the increase in people in receipt of the aged pension.
“Ian#112
That 1.6% is not total per capital government spending at all. You put the link there and Im reading it. The 1.6% growth is referring to a hypothetical situation is still discussing higher ed public spending growth (which is nowhere near student growth anyway) and its hypothetical as far as I can see. Best to get the real numbers.”
No Alana, 1.6% per annum is the figure I calculated myself as producing a doubling over 44 years.
You might want to watch the use of words like “false” and “nonsense” and criticisms of other’s reading comprehension.
Yes daggett I think we are agreeing – although I agreed inappropriately and with undue haste 🙂 I too am familiar with people who need care and the ‘lack of’ is disgraceful in a welathy country like Australia.
After reading some of the most recent comments, perhaps it’s worth reminding people about Professor Kim Swales‘s approach to addressing unemployment with a Pigovian virtual subsidy carried by GST, that I wrote about here. I most recently wrote about it on an ALS blog thread.
Ian#135
I didnt mean to cause you offence but you should quote your sources more often or post links – merely to say “I calculated it” is not sufficient. Nick I suspect you of deliberately confusing with numbers so I will leave it that and not discuss it further. Your precise comment that I dispute was
“But if you look at total welfare state expenditures (health, education, and welfare), they have actually increased quite heavily since the 1960s.
”
Daggett
Nurses accommmodation wasnt free and it really couldnt be considered cheap either in a real sense although I suppose it was cheaper relative to private rentals. Nurse wages when training were very low actually (probably one of the lowest wages a person could receive) and the accommodation perhaps amounted to about a third of the wages and included hospital meals – so what was left was mostly spent on clothing and going out. How do I know? Thats where I started my working career. Beleive me, there wasnt much left for savings at all but at least you were fed and housed while you trained. It was actually a very sensible system. Too often nurses that went to university and then arrived at the hospitals really couldnt cope with the reality of illness. In the old system I recall we had nurse educators all around us and periods of block education (eg 4 weeks a few times a year) in buildings on site. Our very first week, they rolled out the projected slides of horror scenes we could expect to see (shock tactics – if you cant handle it – leave now). Nurses went white, then green and some ran from the room to be sick.
Oh and Dagget – nurses needed to go out to get away from the hospital on their days off! The shifts were rotating up to 10 days at a time and mostly very busy (often frantic and seemingly often short staffed and some days full of crises) hard work and you rarely got off without being an hour late sometimes more and you never got any overtime. Trainees worked hard for the money. Oh well – it did keep weight off, thats for sure!
The British return to the Gold Standard in 1925 was disastrous for British industry because British wage earners were not prepared to accept cuts in their nominal wages. And British wage-earners had the political muscle to prevent those cuts from happening.
Is it seriously argued that Australian wage earners are industrially less powerful in 2009 than British wage earners were in 1925?
Thus it is simply not possible politically to achieve real wage cuts in the way prescribed by Moran.
The other way to achieve real wage cuts is via inflation. Yet it seems that for the foreseeable future deflation will be the order of the day.
Therefore, it would appear that real wages (a least for those who remain employed) are likely to rise rather than fall in the immediate future.
Daggett and Alanna
Interested in your comments on the mentally ill and the winding back of institutionalised care. Sadly I have to agree. Institutionalising everyone or having inadequate resources for institutionalised care are two stupid extremes. A family member had schizophrenia and needed hospital care but could not receive it (lack of beds) for over a year. Much damage was done to her mental health in the mean time.
There has been an obvious push to reduce health costs via fewer nurses and shorter hospital stays over many years. I have heard state health officials state this objective quite explicitely when I worked in a State government. As the population ages and the health budget rises in real terms this push will increase.
Socrates#142 Its the wrong push. They looked at the labour end only in terms of cuts, not job creation (which returns income to GDP and taxes). The government abandoned their role as employers at the lower levels but I suspect this is a key mistake and has contributed to rising costs with less tax income. Its the difference between looking for efficiency in costs and looking for the efficiency of an investment.
Also they could have done so much more in terms of hospital equipment and consumables supply. These packaged sterilised disposable things (plastic forceps in cleaning packs for dressings etc) started out very cheap relative to running central sterilising departments, autoclaving and and using recyclables eg bottling fluids, re sterilising instruments etc
But of course as the entire supply was taken over by mostly big pharmaceutical firms by way of pre packaged sterilised disposables – of course the price went up and up didnt it when they got control, especially seeing as the phamaceutical industry have nice cosy almost monopolies in hospitals eg firm 1 only does cardio thoracic equipment, Firm 2 only does othopaedic equipment and there are only two firms supplying each area and both may be owned by firm 1 ie competition in name only.
This is where the dunderheads got all wrong and thats what annoys me. They have made a complete mess of a once very good system in the name of “efficiency”
Socrates #142
What has been passed off regarding the mentally ill as a caring philosophy once again has been taken over as an extreme public service disinvestment policy that has seen hundreds and hundreds of mentally ill people abandoned to their own fate on the street. It is a disgrace not to mention the costs it has caused in revolving admissions, short stay drug therapy and then early discharge with little to no follow up, and of course readmission again and the cycle goes on.
Thanks for your comments and for showing your appreciation, socrates.
So, was the object to reduce the numbers of nurses and not the numbers of bureaucrats or to reduce both?
From having read “The Shock Doctrine” by Naomi Klein, even though it doesn’t cover Australia in any substantial way, it seems likely to me that the drivers of the deinstitutionalisation of our mental health care had motivations similar to those of ‘free market’ disaster capitalists of which Klein writes. It seems likely to me that they would have understood the likely consequences of their actions but simply did not care.
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Allana, thanks for the information about your own experience as a nurse. It seemed likely that you had some close association with nursing.
I appreciate that the situation for trainee nurses would have been a long way short of ideal and needed to be greatly improved.
Nevertheless, I think the situation that you describe would have still been vastly preferable to having to study for three years often with no income whatsoever, having to incur a HECS debt and, at that, still receiving a lower standard of training.
I also suppose no one would listen to my ideal plan for hospital. All wards would be single level, no one ward would share an airconditioning system with another ward (thats what I think moved infection around hospitals – in fact better not to have air con at all – fans and windows and opening courtyards at the end so people can be moved to the sun to allow wounds to heal). Forget private rooms – awful things happen in them when staff are busy and no other patient can see the patient in the private room – its a hospital, not a hotel. Curtains between patients are fine. There was a lot to be said for the old Nightingale ward. You could see the whole length of it. I worked in those in UK hospitals and thats probably showing my age now. Hospitals in Australia used systems used by military nurses in WW2. (you had to stand back from any lifts or stairs to let all senior ranks of nurses and doctors pass before you etc). Responsibilities were granted only with seniority so you didnt have any responsibility to dispense medicine in first year for example (had to get two stripes for that). These systems worked well, better than current systems from what I see when I have visited people.
The bureaucrats need reducing and more nurses should be trained and the powers given back to nurses to run nursing and medicos to run the medical side. Bureaucrats started messing with good hospital systems and wrecked them.
Daggett#145 – In terms of the wage – nursing was never ideal even then but what really made a lot of nurses exit the profession was being short staffed as a norm with no overtime. There is tremendous team pressure to stay late when all know the person on the next shift will be just as busy as you and struggling to get through their own work, let alone any residual from your shift. Nurses left in droves in the 1980s. I think this worsened also when training shifted to unis and there was never enough nurses.
“There is tremendous team pressure to stay late when all know the person on the next shift will be just as busy as you and struggling to get through their own work, let alone any residual from your shift”
That’s the scam they run at Uni’s now, but any position that involves actual contact with and care for other people is wide open to exploitation.
Perhaps the whole ‘team’ thing has gained such widepsread use as it is so effective for exploiting underlings with the psychological blowtorch.
Yes Nanks – and a lot of it is the push to greater “efficiency” by bureacracies hell bent on stripping the public sector at the direct service provision level – not at their level but at the level of the lowest paid and often most useful actually. A certain level of efficiency hunting just tears down good systems and goes the full circle and gives rise to gross inefficiency and bureacrats dont ever realise they went too far in the hunt for efficiencies in the first damn place!
The whole notion of ever increasing labour “productivity” and “efficiency” is a complete sham but as usual the first response to crisis is to employ another suit to tell them what the problems are (translate -model some numbers on a computer and say what they want to hear – where more “costs” can be saved). They cant see the bleeding obvious in the pursuit for a leaner meaner government (mean is right).