The slides from my Keith Hancock lecture at ANU, which I gave last week, are here. More on this soon.
-
Follow
Following
Already have a WordPress.com account? Log in now.
The slides from my Keith Hancock lecture at ANU, which I gave last week, are here. More on this soon.
John Quiggin 
A few questions and observations:
1. What does the term “Vice-Chancellor’s Senior” mean?
2. Do people find that slides (talking points without the talk) sort of lack something? đ
3. Automation and new methods of production, not just robots, have taken many jobs.
(I guess this point is made in the talk.) That’s often a good thing of course.
It was a good thing when children were no longer were used in weaving mills
and coal mines.
https://museum.wales/articles/2011-04-11/Children-in-Mines/
4. I must admit I lean to the parsimonious explanation for wages.
Neoliberal policy has worked as intended.
5. What was the explanation for stagnation in the talk?
6. Hawke busted the pilots’ strike in 1989 with a national emergency and used air force
and overseas pilots as strike breakers. Domestic pilots were forced into mass resignation.
This demonstration of worker busting and union busting set the stage for the 1990s.
See Note 1:
7. If automation obsoletes (a portion of) work is “worker” (partly) an obsolete income category?
Is there a need to rethink ownership of production?
8. “Compare inaction on wages theft” is a good point.
9. Agree with IR Policy options. Could probably think of more.
10. Agree with “democratic and non-authoritarian” workplaces.
Note 1: Some confusions of tense and poor grammar in the paras quoted below, but still worth reading:
“John Pilger in his book Secret Country wrote about graft and corruption in Australia Today. He mentions several various powerful individuals. These same individuals, Sir Peter Ables, Rupert Murdoch, Bob Hawke all were involved in the conspiracy to smash the Australian Federation of Air Pilots. Because Peter Ables and Rupert Murdoch were involved in the Airline Industry explains why they were so keen to confront the Australian Federation of Air Pilots, the union legally representing pilots flying in Australia. This was on their agenda because of the future deregulation of the industry, with its consequent greater competition. So the AFAP had to be eliminated from the industry, because of their success in gaining adequate salaries for pilots in the past. But there were other reasons.
The AFAP is one of the few unions in which the officials, all pilots, are elected by their own members. They are not paid. The pilots run their own union.
Australian pilots through their Federation were highly regarded for their work and achievements in world aviation safety, security and all technical matters.
It is no secret therefore that Australian aviation has never had a jet fatality and this is the envy of the world. But this would change if the AFAP is not allowed to operate.” – Radical Tradition
Iko
The pilots’ union made a huge tactical error by having pilots from both airlines go on strike at the same time. This created the pretext that there was a national emergency and the necessity to bust the strike and the union. In previous disputes the pilots had gone out one airline at a time. Not only was there then no national emergency, because one airline was still flying, the management of the strike airline, seeing all their customers go to the other airline, quickly caved on the dispute. Job done on airline #1, the union went after airline #2.
Ikon – good points but I’ll wait for the write up.
Smith9Â – reading your comment it sounds like 100% unions fault. Is this correct? And my partner lost out due to the strike, break, dereg, privatising etc and fallout although not a pilot. Just collateral. Who could have managed it better?
***
Uber with $29Bn venture capital sounds like the perfect MMT Job Guarantee contractor for “wait employment “. Margret Thatcher may as well have said “no society AND no government – Uber… “.
“Uber Is Not the Future of Work”
“Gig-enabling apps are a distraction from the uncertainties that affect far more people: Will workers get paid enough and are their jobs safe?”…
…”Most tellingly, Plouffe said that âfor most people, driving on Uber is not even a part-time job âŚitâs just driving an hour or two a day, here or there, to help pay the bills.â He noted that half the drivers work less than 10 hours per week, and, even then, significantly adjust their schedules week to week as needed. Plouffe noted that âthe average number of hours driven continues to fall; in fact, itâs down more than 10 percent since the beginning of the year.â The work is frequently transitory: As Plouffe observes, âa third of drivers said they used Uber to earn money while looking for a job.â
https://www.theatlantic.com/business/archive/2015/11/uber-is-not-the-future-of-work/415905/
See also the fate of Uber X companies ten years on. Good links and real data. Jims Mowing on a cloud on steroids.
“The Servant Economy…
“Ten years after Uber inaugurated a new era for Silicon Valley, we checked back in on 105 on-demand businesses.”
“Now, a decade since Uber blazed the trail, and half that since the craze faded, we built a spreadsheet of 105 Uber-for-X companies founded in the United States, representing $7.4 billion in venture-capital investment. We culled from lists,dug in Crunchbase, and pulled from old news coverage. Itâs not a comprehensive list, but it is a large sample of the hopes and dreams of the entrepreneurs of the time.”…
… “What the combined efforts of the Uber-for-X companies created is a new form of servant, one distributed through complex markets to thousands of different people. It was Uber, after all, that launched with the idea of becoming âeveryoneâs private driver,â a chauffeur for all.”…
… “An unkind summary, then, of the past half decade of the consumer internet: Venture capitalists have subsidized the creation of platforms for low-paying work that deliver on-demand servant services to rich people, while subjecting all parties to increased surveillance.”
Who is watching the private watchers?
KT2
the union leadership stuffed it up bigly.
One consequence of the strike was that an Ansett pilot, Debbie Wardley, lost her job. Wardley was the first woman major airline pilot in Australia, who got to be a pilot by winning an anti-discrimination case against Ansett in the 70s. Ansett’s arguments against hiring women as pilots, which were made in all seriousness, were that that pilots needed strength, even though there was no strength test for pilots; that unions would object; that women’s menstrual cycles made them unsuitable; and that pregnancy and childbirth would disrupt a woman’s career to the point where it would jeopardise safety and incur extra costs for the company.
People should ponder that as they reminisce about the employment paradise that was the pre neo-liberal era in Australia.
@Smith9
As someone not yet born in the 1970s, I was genuinely shocked when doing a bit of historical research to come across classified employment ads from that era.
It was a silly response, of courseâI knew how open and rampant discrimination was at this time, but it didnât prepare me for seeing it for myself.
I saved a copy of one page of ads from 1970, listing jobs for âmen and boysâ and âwomen and girlsâ separately.
âAttractive girl, 18-20 yrs, for Ice Cream Barâ is the first listing in the latter section. Someone else sought a âProtestant lassâ, aged 20-30, for clerical work. The best job on offer for women on the page was for a âfemale accountantââa rare professional opportunity amongst a sea of vacancies for âjunior girlsâ, secretaries and typists. But she could be at most 40 years old, and had to be âcapable of participatingâ in a âpredominantly male sphere of businessâ.
@Luke Elford
I think if you looked at ads from the late 70s you’d find they weren’t as bad. Attitudes had largely changed. The overt sectarianism that would lead to someone placing an ad for s “Protestant lass” had largely gone, at least in the sense that they wouldn’t put it in an ad, but if a Mary O’Connell or Bernadette Murphy applied for the job they’d have no chance.
Interesting points above. But, it’s important to remember that neoliberalism (a men’s movement for the most part) was not responsible for, was not the cause of, improving treatment for women in the workforce and elsewhere. The cause for that was the Women’s Movement (under various names) which can be traced all the way back to Mary Wollstonecraft, or earlier.
What neoliberalism, and capitalism in general, do is subvert and profit upon social movements in one manner or another. An example is the double-income household (fine in itself as women were getting more work and economic independence) being used essentially to assist in stoking over-consumption and inflating house prices. What masked much of the later pain of rising house prices was access to easy credit. Before that what masked the pain of high interest rates was the rise of the two income household.
Slides 15 &16. Anti-Union laws & Discretionaru Use of State Power
What, no mention Hawke, nor of the BLF, Painters and Dockers, and Pilots? No mention of resorting to serving military scabs and military fleet used for union busting, strike breaking, and mass sackings in the interests of close rich mates? No mention of AFP or ASIO, no mention of deregistrations?
Slide 19. 1983, working week reduced to 38 hours (?)
IIRC many had to wait for much longer. Rather a 38 hour week then was for only a few. Definately it was not for many in 1983 Queensland. Recall the sell-out AWU deal with Joh. The AWU (the biggest anti-progressive self-seeking power block within Qld ALP still) back-stabbed the wider union movement when the 38 hour week campaign was nearly won by breaking ongoing rolling strike action to which the AWU as usual for spongers had contributed hardly at all. Recall the AWU, at truly great cost to workers in some other industrial sectors accross the State, did that dirty deed in exchange for a Joh backed AWU take-over of mine worker coverage Joh managed via the QIRC to strip from other unions. More workers, more dues, more delegates to ALP conference = more apparatchiks of the right stuff boosted into and maintained in parliaments. Bastards all, and always!
Svante,
I agree with all those statements, except in defence of J.Q., the list of boss, LNP, ALP and reactionary union anti-worker perfidy is far too long to mention in a 25 slide presentation of talking points on a wider subject. The anti-worker perfidy points alone would fill the 25 slides.
You do not provide much evidence in support of your many claims. I agree it was a verbal address.
RBA Governor Lowe, e.g., finds it implausible that labour’s share of output has fallen because of changes in the IR system: See also below. Labour’s share is about where it was prior to the mining boom but, during that boom, the wage share rose strongly because the value of labour’s expected marginal product rose. Most economists would argue that wages are determined by labour productivity (perhaps relative to productivity in other countries) but not much by the the official IR system and the rapidly vanishing trade unions. There are exceptions e.g. the waterfront where there is a squabble between labour and capital over a duopolistic surplus and, for a while, in mining developments.
Living standards have improved substantially in Australia since 1991-92, wages have not remained stationary and inequality has not worsened. We have never as a nation come close to current levels of prosperity. It is surprising given our inept politicians that we have done as well as we have.
https://www.afr.com/news/policy/industrial-relations/no-longterm-decline-in-labours-share-of-profits-study-finds-20190311-h1c8ax
The ‘research’ spruiked by John Kehoe in the Financial Review has gone unreported for a reason.
There’s no doubt about the decline in the labour share; the figures on relative shares of labour income and of profit in Australian GDP, and GDP elsewhere, and other estimates of the economy as a whole (such as GNP), show unequivocally that there’s been a class war going on, and, as Warren Buffet concluded, ‘My class is winning’. That was said by him about the USA, but the Australian figures are similar (though without the sustained decline in real wages found in the USA).
The ‘research’ Kehoe was given works by seeking to find ‘profits’ of industry sectors; estimate them down with a variety of adjustments; reject, on various grounds, the industries where even then the labour share has clearly fallen; and then hand-wave away the GDP figures to say that there’s a sense of ‘share of profit’ that hasn’t fallen for (some) wages.
But the ‘profits’ analysed by industry sector are anything but robust or objective estimates even to start with. Their adjustments appear to be so poorly founded as to be specious. The exclusion of some industry sectors seems tendentious to make out the result wanted rather than justified by facts independent of the outcome for the argument. And the reconciliation with the robust GDP (and other macro economic) share figures is effectively non-existent. The reconciliation with estimates of profits taken from those industry sectors is similarly lacking.
I suggest anyone interested should ignore the ‘research’ as a tendentious and unfounded outlier.
If there are ‘most’ economists arguing that real wages are determined by labour productivity I must spend too much time on the arguments of others: the Australian economists who have repeatedly analysed the way Australia’s wages for a number of years have not reflected productivity growth much at all. Those are the same economists who have noted that nearly all real growth has gone to the profit share. And that’s before one notes that those whose wages have grown best are the top wage earners who are high level managers and who are successfully clipping the coupon of the profit takers.
@Harry Clarke:
âLabourâs share is about where it was prior to the mining boom but, during that boom, the wage share rose strongly because the value of labourâs expected marginal product rose.â
The ABS disagrees. See their estimates for the labour share in Table 14 of 5260.0.55.002 – Estimates of Industry Multifactor Productivity, 2017-18.
The labour share for the 16 market sector industries stood at 60% at the start of the series in 1993-4, and again in 2000-01, having fluctuated between 59% and 61% in intervening years. Since then, it has fallen to 55% in 2017-18. It had reached 56% by 2008-09, and staged a recovery between 2012-13 and 2015-16, reaching 59%, but has since collapsed.
Your AFR link is paywalled. I managed to repeatedly click on refresh, gaining a few seconds each time to read the opening paragraphs of the articleâenough to catch a name to google. This led me to this paper which I gather is the basis for the article (the link is to the non-paywalled discussion paper version):
Click to access staff_discussion_paper_issue_2_–_adjusting_the_australian_wage_share-_trott_and_vance.pdf
The main problem with the paper is that it only includes data up to 2015-16, when the labour share seemed to be recovering. When the discussion paper came out in 2018, there was already an additional year of data available suggesting that the recovery was illusory; now we have two.
As the authors themselves note, the ABS labour share estimates are produced using a far more sophisticated method for allocating mixed income between labour and capital compared with theirs, which assumes rather arbitrary and fixed shares over time. Depreciation, as they note, has changed very little, so the fact that the ABS estimates donât take it into account is of negligible significance. The issue of housing is irrelevant to the ABSâs labour share for the 16 market industries.
Regarding changes in the labour share between 1959-60 and the early 1990s (before the ABS estimates start), their results are consistent with the idea that all or nearly all of the large increases in the labour share that occurred during the 1970s had been lost by then. This is the same argument advanced by Matt Cowgill and the ACTU.
The key dispute is about what has happened since 2000. The ABSâs estimates are both more sophisticated and more timely, and they support the idea of a decoupling of wages from productivity.
@ Ikonoclast March 14, 2019 at 8:30 am
What does the term âVice-Chancellorâs Seniorâ mean?
I am torn between âProf. Quiggin is older than the Vice-Chancellorâ and âProf. Quiggin is the Vice-Chancellor’s bossâ. However both could be true.
Do people find that slides (talking points without the talk) sort of lack something?
Have you read The Gettysburg Powerpoint Presentation ?
https://norvig.com/Gettysburg/
Luke, this is the AFR article. The graphs – important to the argument that labor’s share took a bump but showed no secular decline – did not cut-and-past.
“The share of income going to business over workers has been exaggerated by critics â such as Labor and the trade unions â and has largely been driven by swings in mining profits, according to previously unreported economic research.
Adjusting for measurement anomalies for housing, self-employment and capital depreciation shows the overall non-housing labour share of income was around its long-term average in 2016.
Labour’s share of income experienced a larger decline during the mining boom and recovered quicker after the resources boom busted, according to a former economist at the federal Department of Jobs and Small Business, Declan Trott, in the Economic Society of Australia’s Economic Papers article.
Opposition Leader Bill Shorten has declared the election is a referendum on wages. Christopher Pearce
“Overall, there is little sign of a long-term decline in the labour share,” Mr Trott notes in the July 2018 paper, Adjusting the Australian Labour Share for Depreciation, Housing and Other Factors, 1960â2016.
“We similarly find that the mining boom accounts for a large part of the fluctuations in the labour share since the 1990s.”
Extending the data timeline beyond the paper’s 1960 to 2015-16 end point, a more recent big rise in commodity export prices for iron ore and coal suggest capital’s share of income over labour would have risen in the past two years.
Trade unions and Labor have rallied against the big rises in corporate profits and subdued pay rises for workers in recent years.
Missing graph.
Opposition Leader Bill Shorten said on Monday he would “get wages moving again for workers” if Labor wins the upcoming federal election, after earlier flagging a higher minimum wage, restoring weekend penalty rates, giving unions more powers and the possible return of industry-wide bargaining for some low-wage industries.
Official statistics show the wages share of the economy’s total income is 52 per cent, near the lows last recorded during the height of the commodity price boom in 2009 and previously recorded around the 1960s.
The profit share of 28 per cent of total factor income is near a record high.
The Australian Bureau of Statistics’ official measurement of labour versus capital income includes depreciation and imputed housing rents, which reduce labour’s share of income, but “do not represent a true shift of income from employees to employers”, according to the Economic Papers’ research.
“Therefore, labour shares of income should be calculated net of depreciation, and excluding housing,” Mr Trott says.
He removes depreciation and imputed housing rents from the calculation.
Reflecting that some small business income is in effect labour income, he also splits unincorporated income between labour and capital, which the ABS does not allocate to either employees or business.
Since the 1960s, there was a sharp rise in labour’s share of income in the 1970s and early 80s as wage inflation broke out before a dip in employees’ share of income during the mining boom in the 2000s.
“Our findings appear compatible with a tendency for the labour share to remain fairly stable over the long run, but with large fluctuations upwards during the oil, wage, and other shocks of the 1970s, and downwards in the mining boom of the 2000s,” Mr Trott notes.
“In particular, recent fluctuations in the labour share appear very closely tied to the terms of trade and the fortunes of the mining industry.”
Missing graph.
Reserve Bank of Australia governor Philip Lowe told The Australian Financial Review Business Summit last week that wages had failed to keep pace with labour productivity gains in the past five years, but this might be a payback for wages growing faster than productivity in the earlier half of the past decade as a result of the mining industry’s fluctuations.
“There is something deep and structural going on and in my own view it is not really coming from the industrial relations system,” Dr Lowe said.
“It’s probably the case that some of what we’ve seen in the past five years is the unwinding but I also think it’s partly structural because we’re seeing in many countries around the world the same phenomenon play out.
“We’re seeing in many countries the growth of real incomes of workers fall short of growth of productivity and I think the underlining factor here is perceptions of competition from globalisation and technology weighing on everyone’s pricing power.”
RBA research has concluded small and incremental minimum wages increases recorded in Australia have not adversely affected employment via hours worked or job losses.
@Harry Clarke
The graphs are presumably taken from the paper that I linked to and have read.
Iâve already explained why the conclusion that the labour share âonly took a bumpâ but recovered is inconsistent with the most recent evidence. There are even sections of the newspaper article which acknowledge this.
Regarding the role of mining, in the 2016-2017 edition of âEstimates of Industry Multifactor Productivityâ, the ABS includes a feature analysing changes in the labour share of income since the late 1990s:
https://www.abs.gov.au/ausstats/abs@.nsf/Previousproducts/5260.0.55.002Feature%20Article32016-17?opendocument&tabname=Summary&prodno=5260.0.55.002&issue=2016-17&num=&view=
It analyses more up-to-date data than the studies that are mentioned in the Trott and Vance paper as investigating the role of the mining boom in affecting the labour share.
It conducts a shift-share analysis, using average value added and labour income shares for 1997/8-2006/7 and 2007/8-2016/17 to avoid sensitivity to short-term fluctuations. It finds that, of a 2.29% fall in the average labour share between these two decades, only 17% is attributable to changes in industry composition, because the large increase in the value-added share of capital-intensive mining was largely offset by growth in labour-intensive industries such as professional services.
The vast bulk, 83%, of the fall in the labour share was attributable to within-industry shifts. The labour share in mining was virtually the same in both decades, so factors affecting the profitability of the mining sector were irrelevant over the medium term.
Slide 13 The labour market since the 1980s / Slide 15 Explaining the decline in wage share…
Should not the rapid and huge reduction in local manufacturing employment pursuant to industry relocation offshore get a mention here? The point about “technology, trade, and changing working patterns” may allude to this. And where is the bastard “accord” sell-out on wages?
(Perhaps industry offshoring should be mentioned at Slide 17 – Discretionary Use of State Power – following tariff reduction/removal, and financial deregulation facilitating offshore capital and jobs transfer? From Hawke onwards…)
“The parsimonious explanation – policy has worked as intended.” – A very good catch all, no matter what explanation given at the time. Irony much? I’ll go with an ironical take on it. A cynical view, though just as valid, arouses far too much heat to be healthy.
Smith9: I agree “the union leadership stuffed it up bigly.” Just so you know the stuffed up in a social, politcal, temporal and kuchooral environment.
These two clips are sweets for this OP.
Thanks to Jason at kottle dot org
“Alexandria Ocasio-Cortez was asked by an audience member about the economic challenge of a significant percentage of our labor force being replaced by automation. She responded, in part, by suggesting we decouple the idea of employment with being able to remain alive:
“We should not be haunted by the specter of being automated out of work. We should not feel nervous about the toll booth collector not having to collect tolls anymore. We should be excited by that. But the reason weâre not excited by it is because we live in a society where if you donât have a job, you are left to die. And that is, at its core, our problem.”
Then she went on to say:
“We should be excited about automation, because what it could potentially mean is more time educating ourselves, more time creating art, more time investing in and investigating the sciences, more time focused on invention, more time going to space, more time enjoying the world that we live in. Because not all creativity needs to be bonded by wage.”
Her full answer, including a bit about âautomated inequalityâ, is worth worth watching in full, starting at ~55:15:
In a 1970 article in New York magazine, the architect and futurist Buckminster Fuller wrote about the collision of technology and âthis nonsense of earning a livingâ:
“We must do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian-Darwinian theory, he must justify his right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.”
I entered the Australian labour force as a junior casual in 1967. Work environments were highly hierarchical. No one spoke to the big boss except his flunkies. Everyone had someone to boss around except the juniors. Also the union movement was strong but still only represented fifty-six percent of all workers in Australia. A lot of European migrants were flooding into casual work on building sites and in small businesses. The big changes came under the Labor government of 1984-1996. First unions were amalgamated. Then wage determination was changed dramatically. Finally compulsory superannuation was introduced. The strange sight of a Labor government getting a union deregistered added to this bizarre series of events. Since then The Coalition government of 1996 to 2007 made further changes to workplace environments. There was a temporary rollback of strict workplace conditions under the labor government of 2007 to 2013. But since then things have got worse for workers under the current government. Wage stagnation is now the norm except in the public sector. It may be coincidental that only the public sector has a vigorous union leadership. What the future holds for the Twenty-First Century worker is anyone’s guess.
Unions amalgamated to meaningless, useless, neoliberal government fanboy irrelevancy. Superannuation: compulsory so as to gift the big end of town and subsidise high income earners. The public sector was downsized and contracted out. It is how the Rudds et al get to make their millions. A sham rollback of workplace conditions was staged 2007-10. And, as if we needed it, we also got a doubling down on Big Australia!