tag:theconversation.com,2011:/au/topics/labour-markets-20166/articles
Labour markets – The Conversation
2023-10-10T06:12:47Z
tag:theconversation.com,2011:article/215302
2023-10-10T06:12:47Z
2023-10-10T06:12:47Z
Nobel prize in economics: Claudia Goldin’s work is a goldmine for understanding the gender pay gap and women’s empowerment
<p>Women stirred up a “quiet revolution” in the labour market, according to Claudia Goldin, the Henry Lee Professor of Economics at Harvard University. She is the <a href="https://www.nobelprize.org/prizes/economic-sciences/2023/press-release/">2023 winner of the Nobel prize in economics</a> for her analysis of gender differences in the labour market, particularly the persistent problem of the gender pay gap. </p>
<p>“Most of her research interprets the present through the lens of the past and explores the origins of current issues of concern,” according to <a href="https://scholar.harvard.edu/goldin/biocv#:%7E:text=Most%20of%20her%20research%20interprets%20the%20present%20through%20the%20lens%20of%20the%20past%20and%20explores%20the%20origins%20of%20current%20issues%20of%20concern.">Goldin’s Harvard bio</a>. And this really does capture the essence of her work and how influential it has been. </p>
<p>As an economic historian, Goldin studies, documents and illuminates the <a href="https://www.aeaweb.org/articles?id=10.1257/000282806777212350">changes</a> in female economic empowerment over time in labour markets, as well as the <a href="https://scholar.harvard.edu/goldin/publications/power-pill-oral-contraceptives-and-womens-career-and-marriage-decisions">causes</a> and <a href="https://scholar.harvard.edu/goldin/publications/grand-gender-convergence-its-last-chapter">challenges</a> ahead for all of us who want to make the world a more equal place in which to live and work.</p>
<p>Despite some progress, gender inequality remains a global concern. It varies across countries of course, but women’s participation in the labour market falls short of men’s <a href="https://genderdata.worldbank.org/data-stories/flfp-data-story/">everywhere in the world</a>. </p>
<p>And when women work, their wages fall short of men’s. If you want to understand what’s driving the dynamics of these gender gaps – and dig into their many facets – Goldin’s work is a goldmine. </p>
<p>The role of education, family and organisation of work are some of the themes explored in her research that explain the historical evolution of gender gaps in labour participation and wages.</p>
<h2>A quiet revolution</h2>
<p>Goldin coined the term “quiet revolution” to describe the dynamics of the gender gap in the labour market and the increase in labour force participation of married women in the US in the 1970s. She showed that there are two key ingredients to this quiet revolution: investment in education, and postponement of age at first marriage – the latter was helped along by the launch of <a href="https://www.theguardian.com/society/2007/sep/12/health.medicineandhealth#:%7E:text=It%20was%20approved%20for%20release,ages%20of%2016%20and%2049.">the contraceptive pill in the 1960s</a>. </p>
<p>As the average age at which women married increased over this time, going to college became a critical investment for them. They could plan for an independent future and form their identities before marriage and family. </p>
<p>This triggered a strong upswing in women’s participation in the labour market. And education is still critical for women’s participation to the labour market today. <a href="https://gpseducation.oecd.org/revieweducationpolicies/#!node=41763&filter=all:%7E:text=On%20average%20across%20OECD%20countries%2C%20higher%20educational%20attainment%20is%20associated%20with%20higher%20employment%20rates%20for%20each%20age%20group.">In most countries</a>, women with higher levels of education are more likely to be employed. </p>
<p>Family also strongly influences female labour force participation, with childbirth typically setting mothers and fathers on different paths – <a href="https://www.nber.org/papers/w31649">children contribute</a> to gender gaps. Goldin’s work shows that the size of these “child penalties” (that is, the lower labour force participation of women compared to men) have shrunk over time. </p>
<p>But the penalty hasn’t vanished. Goldin and her coauthors’ research also shows the motherhood penalty declines over a woman’s lifetime, but the earnings gap between two heterosexual parents persists due to <a href="https://www.nber.org/papers/w30323">a fatherhood premium</a>.</p>
<figure class="align-right ">
<img alt="Line drawing of Claudia Goldin" src="https://images.theconversation.com/files/552809/original/file-20231009-29-a0j810.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/552809/original/file-20231009-29-a0j810.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/552809/original/file-20231009-29-a0j810.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/552809/original/file-20231009-29-a0j810.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/552809/original/file-20231009-29-a0j810.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/552809/original/file-20231009-29-a0j810.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/552809/original/file-20231009-29-a0j810.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Harvard professor Claudia Goldin was awarded the 2023 Nobel for economics ‘for having advanced our understanding of women’s labor market outcomes’.</span>
<span class="attribution"><a class="source" href="https://nobelprize.qbank.se/mb/?h=f142eee16bc09dd5247dd753fd9ef889">Ill. Niklas Elmehed © Nobel Prize Outreach</a></span>
</figcaption>
</figure>
<h2>Flexible working patterns</h2>
<p>Examining how workplaces are organised and how that influences the gender gap is another key insight of Goldin’s work. According to her research, the gender pay gap would be <a href="https://www.aeaweb.org/articles?id=10.1257/aer.104.4.1091">considerably smaller</a> if firms did not disproportionately reward individuals who work long and particular hours. </p>
<p>Industries such as technology have seen changes in how work is organised that have enhanced employee flexibility, but this is not yet as common in the financial and legal worlds, for example. There is more work to do to promote gender equality and Goldin’s will help with this.</p>
<p>Goldin’s research mainly focuses on the US, but her approach and insights have influenced and inspired researchers across the world. Her work has helped to make gender an essential ingredient in understanding how labour markets work, as well as how the <a href="https://www.nber.org/programs-projects/projects-and-centers/gender-economy?page=1&perPage=50">economy</a> works more generally. </p>
<p>There is now a field of research called “gender economics” and we should certainly thank Claudia Goldin for that.</p><img src="https://counter.theconversation.com/content/215302/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alessandra Casarico receives funding from the Italian Ministry of University.
</span></em></p>
The Harvard professor was awarded the Nobel prize for economics for her work on women in the workforce.
Alessandra Casarico, Associate Professor of Public Economics, Bocconi University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/210897
2023-09-03T20:03:03Z
2023-09-03T20:03:03Z
Being the main breadwinner didn’t necessarily keep married mums in work during the pandemic
<figure><img src="https://images.theconversation.com/files/540668/original/file-20230802-19-2o1z8i.jpg?ixlib=rb-1.1.0&rect=0%2C24%2C5447%2C3596&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>In the toughest days of the pandemic, many dual-income families made the difficult choice to drop down to one income. </p>
<p>With dads being the primary earners in many heterosexual households, it was often the mother who gave up her job to manage all the extra housework, homeschooling and childcare the pandemic brought.</p>
<p>But what about heterosexual households where the mother was the primary earner?</p>
<p>Our <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/jomf.12926">study</a>, published in the Journal of Marriage and Family, involved analysis of 7,139 different-sex married parents in the United States, captured at multiple time points. We found many married mothers who earned half or more of the family’s income got knocked out of employment during the first 18 months of the pandemic. </p>
<p>The employment rate of fathers who earned the bulk of the money over this time dropped much less, we found. In fact, it barely changed.</p>
<p>Our study also found the ability to work remotely was an important lifeline for mothers to retain employment. Overall, earning more of the income couldn’t guarantee mothers would be protected from employment loss, but working remotely was crucial to mothers remaining employed. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/540669/original/file-20230802-19-6hm10h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/540669/original/file-20230802-19-6hm10h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/540669/original/file-20230802-19-6hm10h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/540669/original/file-20230802-19-6hm10h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/540669/original/file-20230802-19-6hm10h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/540669/original/file-20230802-19-6hm10h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/540669/original/file-20230802-19-6hm10h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/540669/original/file-20230802-19-6hm10h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The pandemic pummelled mothers through added childcare, housework, and homeschooling.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-great-resignation-didnt-happen-in-australia-but-the-great-burnout-did-201173">The 'great resignation' didn't happen in Australia, but the 'great burnout' did</a>
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</em>
</p>
<hr>
<h2>Even earning more, many mothers were knocked out of employment</h2>
<p>To track US mothers’ employment over the duration of the pandemic, we used data from the Annual Social and Economic Supplement of the Current Population Survey. The data are collected by the US Census Bureau.</p>
<p>Our sample included civilian respondents aged 25–54 who were different-sex, married parents with children 12 years or younger. In each case, both the respondent and their spouse reported working for pay in 2019, before the pandemic started.</p>
<p>We used this data set to follow mothers’ and fathers’ employment patterns over the first year of the pandemic (January 2020 to May 2021). </p>
<p>We found fathers in this group who were primary earners tended to remain employed over this period. </p>
<p>The employment rate for mothers, by contrast, dropped significantly in the first few months and never fully recovered. It didn’t matter if mothers were primary earners or not – their employment rate still dropped.</p>
<p>In fact, by the March to May period of 2021, mothers’ employment was over four percentage points lower than pre-pandemic levels – regardless of their earnings.</p>
<p>So, earning more of the family income didn’t necessarily shield mothers from employment loss. What did matter, however, was access to telecommuting. </p>
<p>Mothers who could work online had significantly higher employment rates across the period of our study than mothers who couldn’t. Additionally, the positive effect of telecommuting on employment was four times larger for mothers than for fathers.</p>
<p>Telecommuting was a lifeline for mothers’ employment during the pandemic.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/541587/original/file-20230807-25-qhmckc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A woman exams documents and works from home while her pre-schooler plays in the background. Half-eaten food and mess sits near her computer." src="https://images.theconversation.com/files/541587/original/file-20230807-25-qhmckc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/541587/original/file-20230807-25-qhmckc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/541587/original/file-20230807-25-qhmckc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/541587/original/file-20230807-25-qhmckc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/541587/original/file-20230807-25-qhmckc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/541587/original/file-20230807-25-qhmckc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/541587/original/file-20230807-25-qhmckc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Earning more of the family income didn’t buffer mothers from employment loss.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>The pandemic-pummelled mothers</h2>
<p>These findings build on our previous research showing US mothers’ employment was hit hard during the pandemic. </p>
<p>At the start of the pandemic, our previous research found nearly 250,000 more mothers than fathers <a href="https://journals.sagepub.com/doi/full/10.1177/2378023120947997">exited employment</a> from February to April 2020.</p>
<p>We also found in prior studies that US mothers with children aged five or under reduced their work time <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7361447/">four to five times more</a> than equivalent fathers.</p>
<p>We also showed that in-person learning in the latter part of 2020 <a href="https://journals.sagepub.com/doi/full/10.1177/08912432211001300?te=1&nl=nyt-parenting&emc=edit_ptg_20210324">was lower</a> in US districts with higher proportions of Black and Hispanic students. Remote learning across the <a href="https://www.rsfjournal.org/content/rsfjss/9/3/134.full.pdf">2020–2021 school year</a> led mothers’ but not fathers’ employment to drop, especially for those with less education and limited access to telecommuting. </p>
<p>And our earlier research revealed how US mothers stepped into more <a href="https://journals.sagepub.com/doi/full/10.1177/1097184X21990737">housework and childcare</a>, causing sleep problems, anxiety and stress.</p>
<p>As we discussed these findings with researchers and the community, one question would keep coming up: isn’t all this just the consequence of fathers earning more? </p>
<p>Isn’t it a “rational” choice to shield fathers from job loss, rather than mothers, because men tend to be the primary earners?</p>
<p>Our recently published <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/jomf.12926">research</a> shows that, no, this was not necessarily about who made more money in the household – it is often about who is expected to provide care when times get tough. </p>
<p>Many mothers got knocked out of employment even when they were the family’s highest earner.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/541586/original/file-20230807-15-tgnnsz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A young Asian mother works from home on a laptop while her child plays next to her." src="https://images.theconversation.com/files/541586/original/file-20230807-15-tgnnsz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/541586/original/file-20230807-15-tgnnsz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/541586/original/file-20230807-15-tgnnsz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/541586/original/file-20230807-15-tgnnsz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/541586/original/file-20230807-15-tgnnsz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=425&fit=crop&dpr=1 754w, https://images.theconversation.com/files/541586/original/file-20230807-15-tgnnsz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=425&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/541586/original/file-20230807-15-tgnnsz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=425&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Working remotely has been critical to mothers remaining employed.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Where to from here?</h2>
<p>US mothers have now returned to employment at pre-pandemic levels. But we can’t ignore the fact many mothers stepped into the added care of the pandemic while also trying to maintain their work lives. Many couldn’t and employment dropped. Others experienced significant <a href="https://osf.io/preprints/socarxiv/py8bj/">earnings losses</a> even while remaining employed. </p>
<p>For those with the option to work remotely – who are largely employed in professional jobs – this benefit was and remains critical to their ability to hold onto their job. Despite this, employers are increasingly removing this lifeline and demanding a return to the workplace.</p>
<p>These lessons also extend to other Western nations. In Australia, for example, <a href="https://journals.sagepub.com/doi/full/10.1177/1097184X21990737">mothers</a> picked up more housework and childcare at the expense of their health and wellbeing (as did <a href="https://theconversation.com/covid-forced-australian-fathers-to-do-more-at-home-but-at-the-same-cost-mothers-have-long-endured-154834">fathers</a>). Australian workers want <a href="https://www.work-futures.org/publications">remote work to remain</a> which has long been critical to mothers maintaining employment and to avoid <a href="https://theconversation.com/the-great-resignation-didnt-happen-in-australia-but-the-great-burnout-did-201173">burnout</a>.</p>
<p>The pandemic showed care work is critical to our lives and we must support those who do it. </p>
<p>For married heterosexual mothers, this means acknowledging the tolls of the pandemic and ensuring access for all in relevant occupations to critical resources like telecommuting.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/yet-again-the-census-shows-women-are-doing-more-housework-now-is-the-time-to-invest-in-interventions-185488">Yet again, the census shows women are doing more housework. Now is the time to invest in interventions</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/210897/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Leah Ruppanner receives funding from the Australian Research Council. </span></em></p><p class="fine-print"><em><span>Liana Christin Landivar is a senior researcher at the US Department of Labor. Views expressed are those of the author and not necessarily those of the US Department of Labor.</span></em></p><p class="fine-print"><em><span>Caitlyn Collins and William Scarborough do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
With dads being the primary earners in many heterosexual households, it was often the mother who gave up work to manage extra work at home during the pandemic. But what about heterosexual households where the mother was the primary earner?
Leah Ruppanner, Professor of Sociology and Founding Director of The Future of Work Lab, The University of Melbourne
Caitlyn Collins, Associate Professor of Sociology, Arts & Sciences at Washington University in St. Louis
Liana Christin Landivar, Faculty Affiliate, University of Maryland
William Scarborough, Associate Professor of Sociology, University of North Texas
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/178497
2022-03-17T16:55:15Z
2022-03-17T16:55:15Z
Provincial competition law needed to address the power of gig work platforms
<figure><img src="https://images.theconversation.com/files/452278/original/file-20220315-17-1aeiqvu.jpg?ixlib=rb-1.1.0&rect=0%2C368%2C5414%2C3194&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Gig work is at a greater risk of monopsony than other platforms because of the role platform owners play as regulators and collectors of user data.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>With the invention of gig-based platforms like Uber and SkipTheDishes, the gig economy has not just become an integral part of the labour industry, but also digital society as well. </p>
<p>Along with the meteoric rise in popularity of these platforms, many of these companies have “monopsonies” in their industries. A <a href="https://www.investopedia.com/terms/m/monopsony.asp">monopsony</a> is similar to a <a href="https://www.investopedia.com/terms/m/monopoly.asp">monopoly</a>, except instead of a single <em>seller</em> dominating a supply of goods and services, a single <em>buyer</em> controls the market.</p>
<p>Businesses gain monopsony power in labour markets when workers lack meaningful outside options for employment. <a href="https://equitablegrowth.org/monopsony-market-power-labor-market/#:%7E:text=The%20classic%20example%20of%20a,of%20labor%20in%20the%20town.">When workers have fewer options for where to work</a>, they are forced to take on unstable, exploitative work for less pay to make ends meet.</p>
<p>Currently, government regulators have limited tools to address the market power of these gig-based platforms. Recent discussions on <a href="https://lmic-cimt.ca/what-does-gig-work-mean">gig work</a> in Canada have focused on benefits like <a href="https://www.canada.ca/en/employment-social-development/programs/ei/consultation-better-program-backgrounder.html">reforming Employment Insurance</a> and classification (<a href="https://gigworkersunited.ca/">seeking employee status</a>), but have overlooked anti-competitive behaviour and the role of employer monopsony. </p>
<h2>Gig work especially vulnerable</h2>
<p><a href="https://www.investopedia.com/terms/g/gig-economy.asp">Gig work</a> — especially those housed on digital platforms — are at a greater risk of monopsony than other platforms because platform owners are also the regulators and collectors of user data. For instance, Uber <a href="http://economicstudents.com/2017/03/uber-is-problematic-but-youll-keep-using-it-anyway/">acts like a monopsonist</a> when it purchases all trips from riders before connecting them to drivers. </p>
<p>Some scholars have argued that <a href="https://doi.org/10.1093/jeclap/lpab017">gig work platforms are essentially price-fixing schemes</a> between contract workers, which is yet another manifestation of monopsony power. </p>
<p>Gig platforms’ use of data may also further increase the monopsony power they wield against workers. For instance, <a href="https://doi.org/10.1093/ser/mwab028">carrot-and-stick incentives</a> based on data collected, like <a href="https://www.wired.com/story/how-to-fix-ratings-in-the-gig-economy/">rating systems</a>, <a href="https://www.varicent.com/blog/variable-compensation-and-the-gig-economy">bonuses</a> and the <a href="https://www.zdnet.com/article/ruled-by-algorithms-gig-workers-remain-powerless-against-automated-decision-making/">threat of being punished by management</a>, can coerce workers into taking jobs they may not usually consider.</p>
<figure class="align-center ">
<img alt="A woman moving grocery bags from a shopping cart into the trunk of a car" src="https://images.theconversation.com/files/452280/original/file-20220315-27-v28zqj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/452280/original/file-20220315-27-v28zqj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=384&fit=crop&dpr=1 600w, https://images.theconversation.com/files/452280/original/file-20220315-27-v28zqj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=384&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/452280/original/file-20220315-27-v28zqj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=384&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/452280/original/file-20220315-27-v28zqj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=482&fit=crop&dpr=1 754w, https://images.theconversation.com/files/452280/original/file-20220315-27-v28zqj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=482&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/452280/original/file-20220315-27-v28zqj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=482&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Carrot-and-stick incentives, like rating systems and bonuses, can coerce workers into taking jobs they may not usually consider working.</span>
<span class="attribution"><span class="source">(AP Photo/Ben Margot, File)</span></span>
</figcaption>
</figure>
<p>Given that technology trends are enhancing monopsony power through algorithms, regulators must examine the tools that they have to curb this power. They should also empower themselves with new ones built for modern markets, controlled by digital technologies and algorithms. </p>
<p>Our <a href="https://vivicresearch.ca/PDFS/Competition-Data-Driven-Markets-Final-Report-2022.pdf">new working paper</a> co-authored with <a href="https://www.linkedin.com/in/ana-qarri-b25a6858/?originalSubdomain=ca">Ana Qarri</a>, a recent graduate of McGill University’s Faculty of Law, uses labour monopsony power as a case study to explore competition issues in data-driven markets.</p>
<h2>Provincial legislation is needed</h2>
<p>One of our recommendations to better address monopsony power in labour markets is to establish separate provincial competition legislation targeted specifically at employers. </p>
<p>Our analysis found that authorities traditionally focus on addressing the strategies companies use to exert their monopsony power, like <a href="https://www.competitionpolicyinternational.com/no-poach-and-wage-fixing-agreements-in-canada-so-whats-the-issue/">wage-fixing and non-poaching agreements</a>. However, they have done little to address monopsony directly, mainly because <a href="https://laws-lois.justice.gc.ca/eng/acts/C-34/">competition law</a> does not provide many tools for tackling it at its root. </p>
<p>Even in instances where competition law does provide tools for protecting workers, it is likely that the Competition Bureau is not enforcing the law to the full extent. The most notable example is mergers and acquisitions that <a href="https://economics.princeton.edu/working-papers/monopsony-in-the-labor-market-new-empirical-results-and-new-public-policies/">lead to monopsony power in some labour markets</a>.</p>
<figure class="align-right ">
<img alt="A man in a suit standing up and giving a speech" src="https://images.theconversation.com/files/452281/original/file-20220315-17-1cymjso.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/452281/original/file-20220315-17-1cymjso.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=705&fit=crop&dpr=1 600w, https://images.theconversation.com/files/452281/original/file-20220315-17-1cymjso.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=705&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/452281/original/file-20220315-17-1cymjso.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=705&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/452281/original/file-20220315-17-1cymjso.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=886&fit=crop&dpr=1 754w, https://images.theconversation.com/files/452281/original/file-20220315-17-1cymjso.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=886&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/452281/original/file-20220315-17-1cymjso.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=886&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Canada’s minister of industry, François-Philippe Champagne, recently announced that Canada’s competition law will be examined.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Adrian Wyld</span></span>
</figcaption>
</figure>
<p>While the Competition Bureau has the power to investigate and even challenge mergers that lead to substantial monopsony power, we found no evidence that it ever has. A provincial authority may be better positioned to address competition issues in labour markets, given that labour law is generally under the purview of the province. </p>
<p>Such an authority could consider <a href="https://accesstomarkets.org/the-latest/potentially-unfair-or-coercive-business-contract-terms/">coercive contract terms</a> that prevent workers and consumers from enforcing their rights under law and other anti-competitive tactics that entrepreneurs and small business owners may face. </p>
<p>Industry Minister François-Philippe Champagne <a href="https://www.canada.ca/en/innovation-science-economic-development/news/2022/02/minister-champagne-maintains-the-competition-acts-merger-notification-threshold-to-support-a-dynamic-fair-and-resilient-economy.html">recently announced</a> that Canada’s competition law will be examined, specifically mentions addressing wage fixing agreements, which is encouraging. </p>
<p>This update could also make it possible for Canada’s competition commissioner to pursue cases against digital platforms on the basis that they are price-fixing conspiracies for contractors operating on platforms, as <a href="https://doi.org/10.1093/jeclap/lpab017">some scholars</a> have proposed. </p>
<h2>Workers need protection</h2>
<p>However, there has been little demonstrated awareness of the role of monopsony power in influencing worker welfare, both in the government and in competition and labour policy circles. The absence of a strong role for the provinces on competition issues may have contributed to the <a href="https://www.cigionline.org/articles/canadas-competition-law-is-it-really-up-to-the-task/">general lack of innovation on the topic</a>.</p>
<p>Still, the province currently has a <a href="https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03886.html">memorandum of understanding</a> with the bureau that promotes co-operation and knowledge exchange. Last year Canada’s labour minister made Ontario the first province to <a href="https://www.thestar.com/business/2021/10/25/ontario-government-bans-noncompete-clauses-freeing-up-workers-to-change-jobs.html">ban non-compete agreements</a>, which restrict workers’ abilities to change jobs freely. </p>
<p>Policy-makers should aim to prevent — and even reduce — monopsony power itself. Readdressing gig workers through the Employment Standards Act will not curb the monopsony power digital firms hold over workers. </p>
<p>While employee reclassification will unlock more benefits and worker rights, such as termination pay, minimum wage, minimum or core benefits, pay stubs and notice of termination, an entirely new legislative approach is needed to curb the profound and growing ability of gig platforms to obtain and exert monopsony power over workers in Canada.</p><img src="https://counter.theconversation.com/content/178497/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Vasiliki "Vass" Bednar is affiliated with the Public Policy Forum (Fellow) and the Centre for International Governance Innovation (CIGI) (Senior Fellow).
She has received funding from the Ministry of Innovation, Science and Economic Development and the Ministry of Government and Consumer Services (Ontario) for policy research on competition. She has also received funding from the Ministry of Labour, Training and Skills Development of Ontario as a member Ontario's Workforce Recovery Advisory Committee (2021-2022). </span></em></p><p class="fine-print"><em><span>Robin Shaban is the owner and co-founder of Vivic Research. They have received funding from Unifor and the Canadian Centre for Policy Alternatives for research and educational services related to competition policy. Robin is affiliated with the Canadian Centre for Policy Alternatives. </span></em></p>
New legislation could strengthen the social contract between workers and platforms.
Vasiliki Bednar, Executive Director, Master of Public Policy in Digital Society Program and Adjunct Professor of Political Science, McMaster University
Robin Shaban, PhD Candidate, School of Public Policy and Administration, Carleton University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/175612
2022-02-01T01:05:08Z
2022-02-01T01:05:08Z
Omicron will only add to looming workforce shortages already faced by key New Zealand industries
<figure><img src="https://images.theconversation.com/files/443054/original/file-20220127-28-jjcn5m.jpg?ixlib=rb-1.1.0&rect=8%2C0%2C5455%2C3637&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">GettyImages</span></span></figcaption></figure><p>The Omicron wave about to wash across New Zealand will exacerbate an already tightening labour market. High employment and ongoing border restrictions mean regional labour forces are nearing peak capacity – and the country is running out of time to find solutions.</p>
<p>With border restrictions in place for much of the past two years, the domestic labour market has been the main source of human capital – and will likely continue to be for some time. </p>
<p>Combined with an ageing workforce, this is causing labour market tightening in most industries. Some form of intervention will be required to find skilled workers to fill the gaps emerging in specialised jobs – especially as the economy grows and older workers retire. </p>
<p>By looking at the Canterbury region as an example of how successive disasters influence the labour force, we can see how <a href="https://www.beehive.govt.nz/release/immigration-changes-support-rebuild">immigration policies</a> can affect short- to medium-term labour requirements. Since the earthquakes of 2010 and 2011, Canterbury has been able to rely on skilled workers from outside the region to support economic activity. </p>
<p>According to a <a href="https://www.lincoln.ac.nz/news-and-events/rebounding-canterbury-economy-in-need-of-workers/">recent study</a> of the region’s ability to navigate the pandemic, this pre-pandemic labour influx, coupled with slower economic activity in 2019-20, meant there was still a sufficient labour supply – even after the rebuild when employment opportunities decreased. </p>
<p>But this buffer is quickly reducing. It is estimated the region’s labour market is likely to peak as soon as 2023 due to more workers retiring and border restrictions limiting new labour supply. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/443055/original/file-20220127-18-cq3sy7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/443055/original/file-20220127-18-cq3sy7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/443055/original/file-20220127-18-cq3sy7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/443055/original/file-20220127-18-cq3sy7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/443055/original/file-20220127-18-cq3sy7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/443055/original/file-20220127-18-cq3sy7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/443055/original/file-20220127-18-cq3sy7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Christchurch rebuild offers a snapshot of how immigration policies affect economic growth.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>The ageing workforce</h2>
<p>What is taking place in Canterbury is reflected on a national level as well. <a href="https://www.stats.govt.nz/news/labour-force-will-grow-and-age">Labour force projections</a> to 2033 reveal an increasing proportion of people above the age of 65 in the workforce. </p>
<p>This reflects lifestyle changes and could offset some of the current labour tightening – especially at a time when there has been a <a href="https://www.stats.govt.nz/news/departures-lift-border-crossing-numbers">net outward migration</a> of people from New Zealand, even with border restrictions in place. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/pandemic-disruption-to-phd-research-is-bad-for-society-and-the-economy-but-there-are-solutions-173982">Pandemic disruption to PhD research is bad for society and the economy – but there are solutions</a>
</strong>
</em>
</p>
<hr>
<p>But <a href="https://www.mbie.govt.nz/business-and-employment/employment-and-skills/labour-market-reports-data-and-analysis/jobs-online/">job vacancies</a> are higher than pre-COVID levels, and <a href="https://www.stats.govt.nz/information-releases/national-labour-force-projections-2020base-2073">population projections</a> show the international labour market remains key to future population growth in New Zealand. </p>
<p>These projections show natural population change – numbers of births minus numbers of deaths – is expected to tip into negative growth in the long run. Hence, net inward migration is expected to be the main driver of population and labour force growth. </p>
<p>The ageing workforce also needs addressing, especially at an industry level. As the labour market peaks and unemployment remains low, pressure on industry-specific labour supply is emerging, as the graphs below show. </p>
<hr>
<iframe src="https://flo.uri.sh/visualisation/8568272/embed" title="Interactive or visual content" class="flourish-embed-iframe" frameborder="0" scrolling="no" style="width:100%;height:600px;" sandbox="allow-same-origin allow-forms allow-scripts allow-downloads allow-popups allow-popups-to-escape-sandbox allow-top-navigation-by-user-activation" width="100%" height="400"></iframe>
<div style="width:100%!;margin-top:4px!important;text-align:right!important;"><a class="flourish-credit" href="https://public.flourish.studio/visualisation/8568272/?utm_source=embed&utm_campaign=visualisation/8568272" target="_top"><img alt="Made with Flourish" src="https://public.flourish.studio/resources/made_with_flourish.svg"> </a></div>
<hr>
<h2>Some industries will be harder hit</h2>
<p>The growing proportion of workers over 60 is visible in some industries, but not all. Manufacturing, hospitality and construction have a noticeably lower share of people in the 60-plus age group. </p>
<p>On the other hand, four industries stand out as having a high and growing share of over-60s: </p>
<ul>
<li><p>health care and social assistance</p></li>
<li><p>education and training</p></li>
<li><p>rental and hire services and real estate services</p></li>
<li><p>transport and storage (with possible supply chain disruption stretching beyond an Omicron wave).</p></li>
</ul>
<p>In the short term, this trend is not surprising and aligns with the ageing population and baby boom generation moving through. But it is still worrisome in the context of a peaking labour force.</p>
<p>The likely impact of the Omicron variant, ongoing border closures and an ageing labour force are generating substantial shocks that are likely to cause further transformation in the economy. </p>
<p>While the ageing of the labour force is to be expected, restrictions on the movement of labour during the pandemic have created a labour market peak earlier than anticipated. </p>
<p>Aside from replacing retiring workers, immigration (including expats returning to New Zealand) further benefits the economy through the new skills and improved systems and production techniques that skilled migrants bring, which all enhance productivity.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/covid-will-dominate-but-new-zealand-will-also-have-to-face-the-triple-planetary-crisis-this-year-175044">COVID will dominate, but New Zealand will also have to face the 'triple planetary crisis' this year</a>
</strong>
</em>
</p>
<hr>
<h2>Urgent action needed</h2>
<p>How will the gaps be addressed? We could see industries replace labour with other means of capital or technology. But this will take time and is expensive. It’s possible some businesses might relocate, while others might even have to close. </p>
<p>Without significant changes in productivity, regions and countries that have historically relied on immigration to support their economies are likely to continue to rely on labour supplies from beyond their borders. </p>
<p>But New Zealand’s window to act is closing. While less stringent border restrictions would provide short-term relief, identifying likely shortages and implementing practical solutions should be the longer-term goal. </p>
<p>This should include encouraging vocational training in key industries, and providing the incentives and support to retain and train skilled workers in key industries – thus reducing potential outward migration when borders do reopen.</p><img src="https://counter.theconversation.com/content/175612/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Dyason does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
An ageing labour force and ongoing border closures will put severe pressure on
New Zealand’s economic reliance on immigration.
David Dyason, Senior Lecturer in Property Studies, Lincoln University, New Zealand
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/162162
2021-06-21T01:00:02Z
2021-06-21T01:00:02Z
Are low-paid jobs really a stepping stone to better pay? A new study suggests it’s not that simple
<figure><img src="https://images.theconversation.com/files/406898/original/file-20210617-25-sz0udd.jpg?ixlib=rb-1.1.0&rect=0%2C8%2C6000%2C3979&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>A job – any job – is generally thought of as better than no job at all. Consequently, low-paid work is often considered a “stepping stone” to a higher-paid job. But how easily do low-paid workers climb up the pay scale, really?</p>
<p>Our <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/1475-4932.12609">new research</a> suggests past studies may have considerably overstated the chances of moving from low to higher pay. This has significant implications for understanding labour market behaviour.</p>
<p>Given the NZ$3.3 billion <a href="https://www.workandincome.govt.nz/about-work-and-income/news/2021/2021-budget.html">increase in welfare payments</a> announced in New Zealand’s recent budget – dubbed the “biggest lift in a generation” – and the ongoing focus on inequality and minimum wage rates, how we measure income mobility is increasingly important.</p>
<p>In particular, what are some of the characteristics of the low-paid workforce? How likely or unlikely is it that an individual can transition from low to higher pay?</p>
<p>Past research has described low-paid work as a stepping stone if there is a greater chance of moving to higher pay relative to someone who is unemployed. </p>
<p>Furthermore, the data have suggested relatively high likelihoods of making the transition from low to higher pay — estimates range from 47% to nearly 90%, based on studies from the UK, Australia and Germany.</p>
<p>However, this research has mostly had to rely on survey data based on individual responses to an annual set of questions. This means we can only observe a snapshot of any given labour market once a year.</p>
<p>When determining whether an individual is unemployed, low paid or higher paid, a lot of information between those annual surveys falls into the unknown.</p>
<h2>What traditional research misses</h2>
<p>Why does this matter? It helps to imagine three different individuals, with different labour market experiences, answering a survey about their employment status in October 2019 and again in October 2020:</p>
<ul>
<li><p>one was low paid in the first survey and remained in low pay every month until the second survey</p></li>
<li><p>the second oscillated between low and higher pay between surveys but happened to be in low pay at each survey point</p></li>
<li><p>the third regularly moves between low pay and unemployment but is also in low pay at the time of each survey.</p></li>
</ul>
<p>Because of the lack of information between survey time points, all three individuals will fall into the same category. In turn, this may influence estimates of movement out of low pay.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/nz-budget-2021-women-left-behind-despite-the-focus-on-well-being-161187">NZ Budget 2021: women left behind despite the focus on well-being</a>
</strong>
</em>
</p>
<hr>
<h2>What more detail reveals</h2>
<p>In New Zealand we have the advantage of the integrated data infrastructure (<a href="https://www.stats.govt.nz/integrated-data/integrated-data-infrastructure/">IDI</a>), a large research database published by <a href="https://www.stats.govt.nz/">Stats NZ</a>. </p>
<p>As well as being population-wide, this provides monthly administrative tax records that reveal labour market states at a much higher frequency.</p>
<p>Our research uses these detailed data to look at the male low-paid workforce aged between 21 and 60 in New Zealand. The results are illuminating.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/nzs-second-well-being-budget-must-deliver-for-the-families-that-sacrificed-most-during-the-pandemic-160528">NZ's second 'Well-being Budget' must deliver for the families that sacrificed most during the pandemic</a>
</strong>
</em>
</p>
<hr>
<p>First, we mimicked conventional earlier research by looking at the labour market from only one month each year. Through this lens, New Zealand looks similar to Australia, with the probability of moving from low pay to higher pay estimated to be 74%.</p>
<p>When we use the detailed monthly income records, however, it is clear the picture is not as rosy. Most importantly, the likelihood of moving from low pay to higher pay is much lower than traditional methods suggest.</p>
<p>In fact, for those who have been in low-paid work for all of the prior 12 months, we found the likelihood of them moving into higher pay in the following month was only 28%. Being continuously in low-paid work, it seems, means it isn’t easy to climb out.</p>
<h2>A limited stepping stone</h2>
<p>On the other hand, our research confirms the stepping-stone effect does exist in the New Zealand labour market: compared to being unemployed, you’re more likely to move into higher pay from being low paid.</p>
<p>Specifically, someone unemployed for the previous 12 months has only a 1% probability of moving into higher pay in the next month. That compares to 28% for those in low-paid employment for all of the previous 12 months.</p>
<figure class="align-center ">
<img alt="Work and Income office sign" src="https://images.theconversation.com/files/407156/original/file-20210618-24-zdp0p6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/407156/original/file-20210618-24-zdp0p6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=388&fit=crop&dpr=1 600w, https://images.theconversation.com/files/407156/original/file-20210618-24-zdp0p6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=388&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/407156/original/file-20210618-24-zdp0p6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=388&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/407156/original/file-20210618-24-zdp0p6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=488&fit=crop&dpr=1 754w, https://images.theconversation.com/files/407156/original/file-20210618-24-zdp0p6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=488&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/407156/original/file-20210618-24-zdp0p6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=488&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Moving from low-paid work to better pay may be difficult, but moving from an unemployment benefit to higher pay is even less likely.</span>
<span class="attribution"><span class="source">GettyImages</span></span>
</figcaption>
</figure>
<p>Overall, our research highlights the value of detailed, high-frequency, integrated data in assessing the nuances in the labour market landscape.</p>
<p>On top of that, it illustrates the real difficulty in climbing the wage ladder for those in long-term low-paid work. This suggests policymakers should focus on pathways to wage growth, as well as on job creation itself.</p><img src="https://counter.theconversation.com/content/162162/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gail Pacheco is a Commissioner at the NZ Productivity Commission</span></em></p><p class="fine-print"><em><span>Alexander Plum and Kabir Dasgupta do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Past research has possibly overstated the likelihood of climbing up the income ladder for low-paid workers.
Alexander Plum, Senior Research Fellow in Applied Labour Economics, Auckland University of Technology
Gail Pacheco, Professor of Economics, Director of the NZ Work Research Institute, Auckland University of Technology
Kabir Dasgupta, Senior Research Fellow, Auckland University of Technology
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/133279
2020-04-06T15:43:30Z
2020-04-06T15:43:30Z
How youth skills training in Kenya can reduce inequality
<figure><img src="https://images.theconversation.com/files/324565/original/file-20200401-66130-7ho6qb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The mismatch between youth skills and labour market expectations makes it challenging for young people to succeed in the world of work.</span> <span class="attribution"><span class="source">Author provided/APHRC</span></span></figcaption></figure><p>Sub-Saharan Africa’s burgeoning population of young people is considered one of its greatest <a href="https://www.unfpa.org/sites/default/files/resource-pdf/SWOP%202014%20fact%20sheet%20-%20Youth%20in%20SUB-SAHARAN%20AFRICA.pdf">untapped resources</a>. Young men and women aged 15-24 constitute about a <a href="https://research.cornell.edu/research/exploding-youth-population-sub-saharan-africa">fifth of the total population</a>. It’s a huge resource because, if well tapped, it could significantly drive productivity and growth. </p>
<p>Providing requisite skills required by both current and future labour markets is one of the main challenges for governments. The big question remains, what’s the best way to tap this huge resource?</p>
<p>Typical of other sub-Saharan countries, Kenya has high youth unemployment rates. In 2019, the World Bank put the figure <a href="https://data.worldbank.org/indicator/SL.UEM.1524.ZS?locations=KE">as high as 18.3%</a> for those aged 15-24 years. A more recent <a href="https://www.knbs.or.ke/?wpdmpro=quarterly-labour-force-report-forth-quarter-2019">tally</a> from the Kenya National Bureau of Statistics put it at 10%. </p>
<p>Every year, between 500,000 and 800,000 youth enter the labour market in Kenya after leaving primary and secondary schools and post-secondary school institutions. Of those completing technical and vocational education and training, <a href="https://www.britishcouncil.co.ke/sites/default/files/ng_kenya_youth_employment_in_kenya.pdf">roughly 40% enter the labour market</a>. However, there are <a href="http://www.tifaresearch.com/wp-content/uploads/2018/12/Skills-Mismatch-Survey-Report.pdf">concerns</a> that skills acquired in these vocational training institutions do not meet the needs of potential employers. </p>
<p>For instance, the 2018 <a href="http://documents.worldbank.org/curated/en/295641532463546573/pdf/128788-STEPESKenyaWorkingPaperFinalMayFULL.pdf">report</a> of an employer survey found that 30% of Kenyan firms felt that a poorly skilled workforce was a major barrier to their growth. The corresponding figure in 2007 was 3%. Generally, youth graduating from these institutions have difficulties accessing, creating and retaining jobs.</p>
<p>This mismatch between youth skills and labour market expectations makes it challenging for young people to succeed in the world of work. But there is a dearth of research about the level of academic skills. More importantly there is little information on the soft skills acquired by youth in Kenya’s technical and vocational training institutions.</p>
<p>This is important because there is evidence from developing country contexts that a <a href="https://adamfletcher.net/wp-content/uploads/2014/01/ASGTHYD.pdf">whole youth development approach</a> is vital for skill acquisition. This approach is premised on the notion that for youth to be productive and improve their well-being, they should develop holistically. This includes social, physical, educational, emotional, spiritual, ethical, and psychological development.</p>
<p>In a <a href="https://aphrc.org/wp-content/uploads/2020/03/TVET-short-report-FINAL.pdf">study</a> conducted in 2018-2019, we examined what skills those leaving training institutions had. Such information could inform the skills development policy in Kenya. In summary our findings show that whole youth development is not well integrated within the training curriculum as well as within training practices.</p>
<p>We also found that Kenya’s youth skills development perpetuates inequality. The system is well-resourced for urban and well-off families, but leaves the poor and mostly rural youth inadequately prepared, if at all, for the labour market. </p>
<h2>The landscape</h2>
<p>Kenya has three types of post-school skills training institutions. National polytechnics, which offer higher diplomas, are at the top of the pyramid. Below them are technical training institutes and vocational training centres. The first two types are funded by the national government, though there exist private technical training institutes. Vocational centres are mainly funded by county governments but increasingly by a variety of non-governmental entities. </p>
<p>In 2018, total enrolment in these institutions was <a href="https://www.knbs.or.ke/?wpdmpro=statistical-abstract-2019">estimated</a> at 363,844, spread over 1,400 institutions. The institutions are managed under a 2013 law. A competence-based education training <a href="http://www.tvetcdacc.go.ke/wp-content/uploads/2019/07/COMPETENCY-BASED-EDUCATION-AND-TRAINING-CBET-POLICY-FRAMEWORK.pdf">curriculum</a> was initiated in 2019.</p>
<p>Our study relied on primary data from a survey of 182 institutions – at all three levels – spread across nine counties. We used questionnaires, assessment tools and focus group discussions to collect information from trainees, instructors, institutional managers and technical staff at the education ministry.</p>
<p>Our study revealed three important drivers of whole youth development. These are individual qualities, community influences and supply side factors, such as funding. </p>
<h2>The findings</h2>
<p>Our multilevel analysis results show that at the individual level, age and gender play a leading role in the acquisition of holistic skills. For instance, older youth exhibit better life and emotional skills compared to those younger. This could be due to their length of exposure to their lived environment and experiential learning. </p>
<p>On the other hand, overall, male youth exhibit higher acquisition of holistic skills than female youth. This difference could be <a href="https://naerjournal.ua.es/article/view/271">explained</a> by gender stereotyping where boys and girls are socialised differently based on societies’ preconceived ideas of what they should be in future. Consequently, it is not unusual for boys to experience greater exposure to activities related to science, technology, engineering and mathematics during their life course. </p>
<p>That said, female youth do better in life skills and emotional skills than male youth. This could explain employers’ preference for female employees for jobs such as public relations, human resources and early grade teaching that require use of emotional skills.</p>
<p>From a community influence perspective, we found that socio-economic and geographical location of the youth matter a lot. Students from well off families and those from well off counties, if not both, demonstrated higher acquisition of holistic skills than those from disadvantaged backgrounds. </p>
<p>In fact, the influence of the family background is so strong that there was no difference in acquisition of skills among youth from advantaged social economic background who attend vocational centres, the lowest level of training, and those who attend national polytechnics, highest level.</p>
<p>This matters because if employers screen potential employees for acquisition of holistic skills, youth from disadvantaged backgrounds are likely to remain longer out of employment. This may also create a huge social gap between those entering paid employment and those entering self-employment. Indeed, a recent UNDP human development report 2019 <a href="https://www.ke.undp.org/content/kenya/en/home/presscenter/speeches/2019/statement-by-mr--walid-badawi--undp-resident-representative-in-k.html">warned</a> that </p>
<blockquote>
<p>“Children from poor families may not be able to afford an education and are at a disadvantage when they try to find work. These children are likely to earn less than those in higher income families when they enter the labour market, when penalised by compounding layers of disadvantage”. </p>
</blockquote>
<p>In the third category of influencers is resources. Managers of national polytechnics (57%) and technical training institutions (44%) reported having adequate equipment. This compared to only 22% of managers in the vocational training centres. The two also enrolled youth with relatively good grades compared to vocational training centres. </p>
<p>The majority of vocational centres on the other hand are located in rural areas, mainly accessed by poor rural youth, and are not properly equipped. These dynamics of resourcing training institutions play out in the acquisition of whole youth development skills and create inequalities that could last through generations.</p>
<h2>Implications for policy</h2>
<p>Our results have stark implications for policy and research. First is the need for post-school training policies and institutions to be seen to close the possible growing gap in acquisition of whole youth development skills based on social economic backgrounds as this could alienate a section of the population. </p>
<p>Second, it would be important to create effective linkages between training institutions and industry. This is especially in rural centres as they play the key role of preparing young people to transition into work places.</p><img src="https://counter.theconversation.com/content/133279/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Moses Ngware receives funding from African Population and Health Research Center (APHRC)</span></em></p>
The system is well-resourced for urban and well-off families, but leaves the poor and mostly rural youth inadequately prepared.
Moses Ngware, Senior Research Scientist, African Population and Health Research Center
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/109569
2019-01-20T18:54:26Z
2019-01-20T18:54:26Z
Why are teachers mostly female? Because men get better pay in other professions
<figure><img src="https://images.theconversation.com/files/254440/original/file-20190118-100273-1et8dqy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Men and women face different trade-offs when choosing careers.</span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>Women are considerably over-represented in the teaching profession. Recent data show, among recent Australian university graduates, 97% of pre-primary teachers, 85% of primary teachers and 68% of secondary teachers are female. Similarly, large proportions of women in teaching are also observed <a href="https://data.oecd.org/teachers/women-teachers.htm#indicator-chart">across the OECD</a>. </p>
<hr>
<p><iframe id="kNCax" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/kNCax/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<hr>
<p>The share of male teachers in Australia has been <a href="https://www.sciencedirect.com/science/article/abs/pii/S0272775717303278">declining since 1977</a>. What can explain this notable and persistent gender imbalance? Generally, it’s attributed to gender differences in occupational preferences and social roles. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/male-teachers-are-an-endangered-species-in-australia-new-research-83464">Male teachers are an endangered species in Australia: new research</a>
</strong>
</em>
</p>
<hr>
<p>But our <a href="http://ftp.iza.org/dp12027.pdf">research</a> suggests economic forces may be a key contributing factor. Understanding and addressing the reasons for the gender imbalance in teaching is important. It represents a distortion in this particular labour market. It could also send and perpetuate unhelpful signals about the career aspirations of men and women, to the detriment of both.</p>
<h2>“It’s the labour market, silly!”</h2>
<p>In a recent <a href="http://ftp.iza.org/dp12027.pdf">paper</a>, we considered whether women (and men) choose to become teachers in line with or in spite of economic incentives. In the context of Australia, <a href="http://andrewleigh.org/pdf/performancepay.pdf">research</a> <a href="https://pdfs.semanticscholar.org/f63d/3548b2f65a8dd9b68d9e46d93dbb6850cdb4.pdf">shows</a> the quality of people who choose to go into teaching responds to the relative wage distribution in the labour market. In other words, a higher wage attracts better quality teachers. </p>
<p>Our analysis investigated whether the gender composition in teaching reflects the relative wage distributions for women and men. In particular, we compared the salaries of women choosing to become teachers to that of women choosing other professions. We also carried out a similar analysis for men. </p>
<hr>
<p><iframe id="ulk05" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/ulk05/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<hr>
<p>This approach helps explain the observed gender distribution. For men, the opportunity cost of becoming a teacher relative to choosing another profession is high. Men give up a higher potential salary by choosing teaching over a non-teaching career. </p>
<p>For women, the opposite occurs. Average salaries are lower in non-teaching occupations, so the choice to become a teacher comes at a substantially lower opportunity cost. It can even be a more profitable career choice than others because for women with a Bachelor of Arts (BA), teaching is one of the best paying jobs. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/we-need-to-support-more-men-to-become-primary-teachers-86775">We need to support more men to become primary teachers</a>
</strong>
</em>
</p>
<hr>
<p>This suggests wage structures in the labour market underpin occupational choices. Men and women face different trade-offs and opportunity costs when choosing careers. This may contribute to the observed concentration of women – or <a href="https://www.tandfonline.com/doi/abs/10.1080/09540250802190156">feminisation</a> — in certain occupations. </p>
<p>Clearly, the concentration of women in teaching is problematic from a gender equality perspective. Parents, students and schools value the exposure to a diverse workforce that is more representative of society. </p>
<h2>What can be done to attract more men to teaching?</h2>
<p>A seemingly obvious solution is to increase teachers’ salaries across the board. But this may, in fact, raise the concentration of women in teaching even more. Higher salaries would further increase the returns in teaching relative to other professions for women. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/254453/original/file-20190118-100270-18hv4v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/254453/original/file-20190118-100270-18hv4v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/254453/original/file-20190118-100270-18hv4v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/254453/original/file-20190118-100270-18hv4v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/254453/original/file-20190118-100270-18hv4v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/254453/original/file-20190118-100270-18hv4v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/254453/original/file-20190118-100270-18hv4v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Raising salaries for all teachers wouldn’t necessarily encourage more men to go into teaching.</span>
<span class="attribution"><span class="source">from www.shutterstock.com</span></span>
</figcaption>
</figure>
<p>But it would have a small or negligible impact on the returns for men. Men would continue to be attracted to the higher salaries in professions other than teaching. </p>
<p>Efforts to raise the share of male teachers are likely to have limited success until the underlying structural economic incentives are addressed. That is, the higher wages in non-teaching jobs, which tend to pull men away from teaching. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/primary-schools-are-losing-more-and-more-male-teachers-so-how-can-we-retain-them-82017">Primary schools are losing more and more male teachers, so how can we retain them?</a>
</strong>
</em>
</p>
<hr>
<p>Discussions around the gender composition of different occupations, particularly teaching, tend to focus on factors such as gender predisposition, social influences and job attributes, such as greater flexibility and work-life balance. These factors may play an important role to varying degrees, but reviewing and reforming the monetary incentives which influence gender segregation in occupations is a good starting point. </p>
<p>Additional ways we could address this are by: </p>
<ul>
<li>providing additional scholarships for men in teaching </li>
<li>ensuring teaching career plans fulfil the ambitions and expectations of both male and female teachers</li>
<li>improving the image of teaching as an essential job to enhance a society.</li>
</ul><img src="https://counter.theconversation.com/content/109569/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Massimiliano Tani has received funding from Graduate Careers Australia for this project, carried out with Jaai Parasnis (Monash) and David Carroll (Monash). </span></em></p>
For women with a bachelor of arts degree, teaching is one of the highest paying jobs. The opposite is true for men.
Massimiliano Tani, Professor of Finance and Economics, UNSW Sydney
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/109654
2019-01-10T23:45:15Z
2019-01-10T23:45:15Z
Graduate employment is up, but finding a job can still take a while
<figure><img src="https://images.theconversation.com/files/253166/original/file-20190110-32154-p9mpdh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Full-time employment is up, the gender gap has widened, and employers are generally satisfied with the quality of Australian graduates.</span> <span class="attribution"><span class="source">Photo by Caleb Woods on Unsplash</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>Four years on from the <a href="http://www.graduatecareers.com.au/wp-content/uploads/2015/06/AGS_REPORT_2014_FINAL.pdf">worst new graduate employment outcomes</a> ever, the 2018 statistics <a href="https://www.qilt.edu.au/about-this-site/graduate-employment">released today</a> show cause for optimism. Although full-time employment rates remain well down on a decade ago, they are improving.</p>
<h2>Graduates in health-related courses fare the best</h2>
<p>In early 2018, about four months after completing an undergraduate course, 73% of new graduates who were looking for full-time employment had found it. This continues a positive trend since the low point of 68% in 2014. But apart from the early 1990s recession, it’s still a poor result by historical standards. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/253165/original/file-20190110-32139-1uru41s.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/253165/original/file-20190110-32139-1uru41s.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=435&fit=crop&dpr=1 600w, https://images.theconversation.com/files/253165/original/file-20190110-32139-1uru41s.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=435&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/253165/original/file-20190110-32139-1uru41s.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=435&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/253165/original/file-20190110-32139-1uru41s.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=546&fit=crop&dpr=1 754w, https://images.theconversation.com/files/253165/original/file-20190110-32139-1uru41s.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=546&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/253165/original/file-20190110-32139-1uru41s.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=546&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Full-time undergraduate employment rates, approximately four months after completion.</span>
<span class="attribution"><span class="source">Department of Education and Training, Graduate Outcomes Survey and Graduate Careers Australia, Graduate Destination Survey</span></span>
</figcaption>
</figure>
<p>These overall results hide substantial differences between graduates of different degrees. As usual, health-related occupations have the best employment rate, with medicine, pharmacy and physiotherapy recording more than 90% employment. </p>
<p>Also as usual, graduates in the visual and performing arts have the worst outcomes, with just over half in full-time employment. Biological sciences graduates did better in 2018 than 2017, but with 58% in full-time employment they’re still in a tough labour market.</p>
<p>A <a href="https://www.qilt.edu.au/docs/default-source/gos-reports/2018-gos-l/2018-gos-l-national-report-final.pdf?sfvrsn=742e33c_2">follow-up survey three years after graduation</a> suggests employment rates improve significantly over time, although the strong fields at the four-month point usually retain their top position. </p>
<h2>Job quality is stable</h2>
<p>Compared to 2017, job quality for new graduates in 2018 is stable. In both 2017 and 2018, 72% of graduates working full-time were in professional or managerial occupations. On a more subjective measure, in 2018 27% of graduates with full-time jobs felt they were not fully using their skills, slightly up on 2017. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/five-myths-about-australian-university-graduate-outcomes-87074">Five myths about Australian university graduate outcomes</a>
</strong>
</em>
</p>
<hr>
<p>Unfortunately, graduates from courses with poor overall full-time employment rates also have relatively low rates of professional and managerial employment and relatively high rates of reporting their job does not fully use their skills. </p>
<h2>Starting salaries are up slightly, but the gender gap has increased</h2>
<p>Median starting salaries also differ significantly between fields in 2018, ranging from a high of A$83,700 for dentistry to a low of A$47,000 for pharmacy. This reflects their <a href="https://www.pharmacyboard.gov.au/registration/internships.aspx">system for professional registration</a>. </p>
<p>The overall median starting salary in 2018 was A$61,000, up from A$60,000 in 2017. This roughly reflects salary increases <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/CBC188AEC406299BCA25817D0019F9CC?opendocument">across the overall labour market</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/253336/original/file-20190110-43529-1yjnfzk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/253336/original/file-20190110-43529-1yjnfzk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/253336/original/file-20190110-43529-1yjnfzk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/253336/original/file-20190110-43529-1yjnfzk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/253336/original/file-20190110-43529-1yjnfzk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/253336/original/file-20190110-43529-1yjnfzk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/253336/original/file-20190110-43529-1yjnfzk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The gender pay gap for graduates widened again in 2018.</span>
<span class="attribution"><span class="source">from www.shutterstock.com</span></span>
</figcaption>
</figure>
<p>In 2017, the graduate gender pay gap had narrowed to men earning 2% more than women. But in 2018 it widened again to 5%, or A$3,000 a year. Some of this is due to men choosing courses that lead to higher-paying jobs. But even in highly-feminised fields such as nursing and teaching men report slightly higher median salaries. </p>
<h2>Prestige universities do not provide better outcomes</h2>
<p>At first glance, the most surprising results in this survey are those reporting outcomes by university. Students from some of the most prestigious universities report poor employment and salary outcomes, while students from some regional universities do very well.</p>
<p>These counter-intuitive results highlight the importance of looking carefully at other characteristics of graduates. Regional universities enrol more mature-age students than big-city sandstone universities. Older people often already have work histories and current jobs, which is why they earn more when they graduate.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/does-it-pay-to-graduate-from-an-elite-university-not-as-much-as-youd-think-95658">Does it pay to graduate from an ‘elite’ university? Not as much as you'd think</a>
</strong>
</em>
</p>
<hr>
<p>Sandstone universities are also more likely to have large arts and science faculties, and graduates in those fields can drag down median salaries. Even so, <a href="https://grattan.edu.au/wp-content/uploads/2014/10/816-mapping-higher-education-20142.pdf">previous studies have found</a> employers typically don’t initially pay a wage premium to graduates from sandstone universities. They want to see performance before they pay more, rather than trust university prestige. </p>
<h2>Employer satisfaction</h2>
<p>The complicated issue of graduate quality is examined in another report released today, the <a href="https://www.qilt.edu.au/about-this-site/employer-satisfaction">employer satisfaction survey</a>. This survey has a bias, as it relies on graduates nominating their supervisor to participate. </p>
<p>Graduates who think they’re doing badly are unlikely to nominate their supervisor, so the report’s 85% overall employer satisfaction is probably above the true number. But the survey is still useful for comparisons.</p>
<p>As with some of the other employment outcomes, employer satisfaction by university does not follow any prestige-based pattern. Only one sandstone university, the University of Queensland, makes it to the top ten universities by employer satisfaction. Bond University graduates have the most satisfied employers, followed by Western Sydney University and James Cook University graduates. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-problem-isnt-unskilled-graduates-its-a-lack-of-full-time-job-opportunities-90104">The problem isn't unskilled graduates, it's a lack of full-time job opportunities</a>
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<p>While employers were generally happy with their graduate hires, 40% said the qualification could have better developed graduates “technical and professional skills”. That seems high. On the other hand, few employers (5%) suggested the qualification could improve “teamwork and interpersonal skills”. </p>
<h2>Job growth is critical to employment outcomes</h2>
<p>The government wants universities to do more on graduate employment. Graduate job outcomes are likely to be part of new <a href="https://www.education.gov.au/performance-based-funding-commonwealth-grant-scheme">university performance funding scheme</a>. </p>
<p>But as the Minister for Education, Dan Tehan, <a href="https://ministers.education.gov.au/tehan/uni-graduates-taking-advantage-strong-economy">says in his media release</a> on these reports, job creation is crucial. Especially as <a href="https://docs.education.gov.au/node/51381">total graduate numbers continue to increase</a>, job growth is the vital link between employability, which universities can help with, and actual employment for their graduates. </p>
<p><a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6291.0.55.003Feb%202014?OpenDocument">In 2014</a>, an increasing number of graduates collided with a declining number of professional and managerial jobs for people aged between 20 and 24 years. This is what caused the worst-ever graduate employment outcome. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/253179/original/file-20190110-32139-1338ak9.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/253179/original/file-20190110-32139-1338ak9.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=466&fit=crop&dpr=1 600w, https://images.theconversation.com/files/253179/original/file-20190110-32139-1338ak9.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=466&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/253179/original/file-20190110-32139-1338ak9.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=466&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/253179/original/file-20190110-32139-1338ak9.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=586&fit=crop&dpr=1 754w, https://images.theconversation.com/files/253179/original/file-20190110-32139-1338ak9.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=586&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/253179/original/file-20190110-32139-1338ak9.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=586&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Professional and managerial jobs, people aged 20 to 24 years.</span>
<span class="attribution"><span class="source">Australian Bureau of Statistics, Detailed labour force</span></span>
</figcaption>
</figure>
<p>But since 2014, with a couple of hesitations, the jobs trend has been positive. Job numbers were still going up in late 2018, which is a good sign for recent graduates looking for work. </p>
<p>The labour market will always fluctuate, but at least in the short term both the outcomes survey released today and the latest ABS figures suggest employment opportunities for graduates are increasing.</p><img src="https://counter.theconversation.com/content/109654/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Norton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
At least in the short term, employment opportunities for graduates seem to be increasing.
Andrew Norton, Higher Education Program Director, Grattan Institute
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/102028
2018-09-06T21:04:06Z
2018-09-06T21:04:06Z
For millennials, employment is a public health challenge
<figure><img src="https://images.theconversation.com/files/235111/original/file-20180905-45151-1sg6wr0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Research among Canadians shows employment to be a critical social determinant of health, partly because those who earn higher wages have more access to safe housing, nutritious foods, social services and medical care. </span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>Millennials now make up the <a href="https://www150.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=2820002&pattern=&csid=">largest share of the Canadian workforce</a> and many are facing precarious working conditions. </p>
<p>As a society, we have previously assumed that if young Canadians invest in formal training and “pay their dues” in poor quality jobs early in their careers, they will work their way into better quality employment. A <a href="https://www.policyalternatives.ca/publications/reports/no-safe-harbour">recent report</a> from the Canadian Centre for Policy Alternatives (CCPA) suggests a different reality.</p>
<p>The study, based on a national survey of 1,000 professionals, found that 22 per cent are working in precarious situations, characterized by contract work, part-time hours, unpredictable incomes and a lack of paid sick days. </p>
<p>It reports that working in a professional job no longer provides Canadians with working conditions that are optimal for health, regardless of skills and training. And that Canadians are most susceptible to this job instability at the early stages of their career. </p>
<p>My own research at the <a href="https://www.iwh.on.ca">Institute for Work & Health</a> reveals that <a href="https://doi.org/10.1007/s10926-018-9772-z">many young people with existing health conditions also begin their careers in part-time jobs</a> or <a href="https://www2.deloitte.com/insights/us/en/focus/technology-and-the-future-of-work/millennials-in-the-gig-economy.html">gig work</a>. These jobs are often an entry point into the labour market, but they offer less access to <a href="https://doi.org/10.1002/acr.23523">workplace health resources</a> like extended benefits, counselling support or paid sick days. </p>
<p>The long-term public health implications of these trends will be significant, and should be addressed at the policy level. </p>
<h2>Work stress and heart disease</h2>
<p>Research data has consistently shown that work and health are interconnected. </p>
<p>In the late 1960’s, <a href="https://unhealthywork.org/classic-studies/the-whitehall-study/">studies of British civil servants</a> uncovered important links between working conditions and mortality. They found that those working in more stressful jobs — characterized by lower pay, unpredictability and less skill — were more likely to experience chronic diseases ranging from heart disease to depression. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/235104/original/file-20180905-45175-13ochec.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/235104/original/file-20180905-45175-13ochec.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/235104/original/file-20180905-45175-13ochec.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/235104/original/file-20180905-45175-13ochec.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/235104/original/file-20180905-45175-13ochec.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/235104/original/file-20180905-45175-13ochec.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/235104/original/file-20180905-45175-13ochec.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Precarious employment can have a ‘scarring effect’ on millennials, causing problems such as loss of confidence throughout adulthood.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
</figcaption>
</figure>
<p>Research among Canadians also shows <a href="http://thecanadianfacts.org/the_canadian_facts.pdf">employment to be a critical social determinant of health</a>. Those who earn higher wages have more access to the safe housing, nutritious foods, social services and medical care that provide pathways to better health. </p>
<p>This income-health relationship is reflected in recent data showing that the highest earning Canadians <a href="https://cdhowe.org/sites/default/files/attachments/research_papers/mixed/Rich%20Man%2C%20Poor%20Man%20-%20The%20Policy%20Implications%20of%20Canadians%20Living%20Longer.pdf">live three to eight years longer than the lowest earners</a>. </p>
<h2>‘Generation screwed’</h2>
<p><a href="https://www.economics.mcmaster.ca/pepso/documents/the-generation-effect-full-report.pdf">In a new study of more than 1,000 Canadian millennials</a>, 44 per cent reported job precarity. Close to half of those in precarious jobs also reported depression or anxiety directly related to their working situation.</p>
<p>Job precarity can add to a number of <a href="https://link.springer.com/chapter/10.1057/978-1-137-46781-2_13">social and economic challenges</a> facing millennials including rising personal debts, growing costs of living, shrinking access to pensions and lower retirement savings. It is not surprising that some in the media refer to millennials as, “<a href="https://highline.huffingtonpost.com/articles/en/poor-millennials/">generation screwed</a>.” </p>
<p>The hurdles faced by millennials inside and outside of the workplace can have a “<a href="https://doi.org/10.1186/s40461-014-0012-2">scarring effect</a>” and can contribute to adverse work outcomes (such as unemployment, missed work days, loss of confidence) that <a href="http://www.ilo.org/global/research/global-reports/youth/2013/lang--en/index.htm">extend across adulthood</a>. </p>
<p>The scarring effect can be especially deep for segments of the population that already face higher barriers to the labour market: women, people with disabilities, newcomers or racial minorities. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/governments-know-work-and-living-conditions-can-kill-us-its-time-to-act-96518">Governments know work and living conditions can kill us -- it's time to act</a>
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<p>Prolonged employment in precarious jobs could also have a substantial impact on health. For instance, <a href="https://www.ipsos.com/sites/default/files/2017-08/IpsosPA_PublicPerspectives_CA_April%202017%20Mental%20Health.pdf">studies indicate that millennials are at the highest risk for mental health issues, an outcome that can be exacerbated by those with lower incomes.</a> </p>
<h2>Policies to ensure pay equity</h2>
<p>Traditional public health interventions tend to focus on behavioural or lifestyle changes to improve the health of youth and young adults. The role of employment in health promotion is often overlooked. </p>
<p>Focusing on the working conditions of millennials offers an important opportunity to foster early and sustained mental health and prevent chronic conditions. </p>
<p>In particular, we need policies to address the changing nature of work for Canadians. In some provinces, recent policy changes have been made to protect workers in precarious jobs by increasing the minimum wage, ensuring pay equity or offering emergency leave. </p>
<p>These changes are an important step forward in improving the working lives of Canadians. </p>
<p>And yet existing policies still fall short of offering tangible pathways for millennials to enhance working conditions and transition to stable employment. </p>
<p>Tackling the specific labour market experiences of millennials represents a critical approach to promoting the health of young Canadians as they enter the workforce and throughout their working lives.</p><img src="https://counter.theconversation.com/content/102028/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Arif Jetha receives funding from the Arthritis Society. He s affiliated with Institute for Work & Health and University of Toronto's Dalla Lana School of Public Health</span></em></p>
No longer can young people invest in their education and work their way into secure employment. The health impacts of this job insecurity are profound.
Arif Jetha, Associate Scientist, Institute of Work and Health, and Assistant Professor, University of Toronto
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/102634
2018-09-05T07:48:19Z
2018-09-05T07:48:19Z
To fix higher education funding, we also need to fix vocational education
<figure><img src="https://images.theconversation.com/files/234961/original/file-20180905-45169-e6f9ex.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">We need a tertiary education funding system that will help get students into courses with employment opportunities at the end of them.</span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>Yesterday the shadow education minister, Tanya Plibersek, <a href="http://www.tanyaplibersek.com/media_release_labor_to_help_all_australians_get_the_chance_to_study_at_uni">announced</a> Labor plans to invest an additional A$174 million in the higher education sector if there’s a change of government at the next election. This extra funding would be to give first in family students, students from outer suburbs and the country, Indigenous students, and students with a disability a better chance to study at university. </p>
<p>This is on top of a <a href="https://www.timeshighereducation.com/news/labor-reaffirms-backing-uncapped-numbers-australia">promise to uncap student places</a> at university. Labor estimates this will see the number of Australians getting a university education rise by 200,000 over 12 years.</p>
<p>But university may not be the best option for everyone. Concern about a glut of students graduating from degrees such as <a href="https://www.smh.com.au/national/too-many-lawyers-futureproof-your-degree-20150730-ginpjh.html">law</a> or <a href="https://mumbrella.com.au/three-quarters-of-journalism-grads-fail-to-land-a-job-in-the-industry-535780">journalism</a> and not getting jobs have ignited discussion about whether we should control the number of students entering university or particular courses.</p>
<p>But if universities are to enrol fewer people, we should offer attractive alternatives to university education. To fix higher education, we also need to fix vocational education to help get students into courses with employment opportunities.</p>
<h2>Balancing graduates and the labour market</h2>
<p>From 2009 until last December, universities could enrol unlimited numbers of bachelor degree students and be paid for each one. This is a system called demand driven funding. It ended when the Commonwealth government announced it would only pay universities a <a href="https://www.smh.com.au/opinion/bold-and-successful-experiment-comes-to-premature-end-with-22-billion-university-funding-cut-20171220-h07tfa.html">fixed sum of money</a> from 2018 onwards, capping this sum for two years at the amount paid out in 2017. </p>
<p>A major criticism of the demand driven system was that it flooded the labour market with graduates who couldn’t find jobs in their field. In 2014, short-term graduate employment outcomes were the <a href="https://andrewnorton.net.au/2018/01/15/is-the-graduate-labour-market-recovering/">worst on record</a>. Nearly a third of graduates who were looking for full-time work couldn’t find it. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/the-problem-isnt-unskilled-graduates-its-a-lack-of-full-time-job-opportunities-90104">The problem isn't unskilled graduates, it's a lack of full-time job opportunities</a>
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<p>The recent poor employment results for new graduates were partly due to bad timing. Most graduates aim for the professional jobs most likely to use their skills. But growth in the number of professional jobs nearly stalled in 2013 as the mining boom ended and <a href="http://highereducationstatistics.education.gov.au/">graduations started increasing</a> due to the introduction of the demand driven system. When the economy is weak, new job seekers suffer the most.</p>
<p>But over the longer run, <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/5F60A449AE6DE5F6CA258090000ED52A?opendocument">ABS data</a> shows the number of people in their early career securing professional jobs is increasing significantly. The end of the mining boom paused growth, but it didn’t reverse the long-term upward trend. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/234739/original/file-20180904-41708-1fummv9.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/234739/original/file-20180904-41708-1fummv9.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=392&fit=crop&dpr=1 600w, https://images.theconversation.com/files/234739/original/file-20180904-41708-1fummv9.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=392&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/234739/original/file-20180904-41708-1fummv9.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=392&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/234739/original/file-20180904-41708-1fummv9.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=493&fit=crop&dpr=1 754w, https://images.theconversation.com/files/234739/original/file-20180904-41708-1fummv9.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=493&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/234739/original/file-20180904-41708-1fummv9.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=493&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Occupational trends, 1987-2017.</span>
<span class="attribution"><span class="source">ABS</span></span>
</figcaption>
</figure>
<p>No higher education system can produce a perfect balance between graduates and the labour market. Education and the economy will always work on different timelines. But we need a tertiary education funding system that will help get students into courses with employment opportunities. </p>
<h2>Fixed funding</h2>
<p>Before demand driven funding, with universities getting fixed annual grants as they do again now, the system did not respond well to the labour market. In 2008, 40 professional occupations were in <a href="https://docs.jobs.gov.au/documents/historical-list-skill-shortages-australia-0">skills shortage</a>, with health-related fields such as aged care particularly badly affected. If Australia hadn’t been able to import large numbers of health professionals from overseas, this would have been a public health disaster. </p>
<p>Capped funding for universities makes it hard for them to respond to workforce issues as they emerge. Universities aren’t funded to accommodate the number of students who want to study or the number of skilled graduates needed in key areas, such as health care.</p>
<h2>The demand driven system mostly responded to labour market signals…</h2>
<p>Under demand driven funding, the higher education system adjusted to demand for graduates in certain fields and oversupply in others without government intervention. Demand driven funding does not mean endless, rapid growth in the numbers of students studying at university.</p>
<p>We can see how labour market information flowed through to student behaviour. <a href="https://www.smh.com.au/politics/federal/work-and-pay-prospects-for-graduates-deteriorated-in-2014-a-survey-shows-20141230-12fl2u.html">Media reports</a> highlighting poor graduate outcomes likely played a role in communicating market signals to students. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/deregulating-tafe-is-a-big-risk-to-the-labour-market-54171">Deregulating TAFE is a big risk to the labour market</a>
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<p>As <a href="https://www.dailytelegraph.com.au/news/nsw/no-school-jobs-available-for-thousands-of-trained-teachers-throughout-nsw-schools/news-story/e060deceae07330197c18cd659eccd3d">reports in NSW spread</a> of teaching graduates not finding work, the number of students commencing teaching degrees in NSW <a href="http://highereducationstatistics.education.gov.au/">fell by nearly 2,000</a>. The number of people <a href="https://docs.education.gov.au/node/47771">accepting an offer</a> for an engineering course also fell as the mining boom ended. A shortage of skilled health workers was the biggest problem under the previous system, and health-related enrolments <a href="http://highereducationstatistics.education.gov.au/">grew by the most</a> under demand-driven funding. </p>
<p>By 2015 <a href="https://grattan.edu.au/wp-content/uploads/2018/01/demand_driven_facts_figures_SLNSW_13Feb.pdf">the enrolment boom</a> that began in 2009 was over. Only five professional occupations <a href="https://www.jobs.gov.au/national-state-and-territory-skill-shortage-information">remain in skills shortage</a>, including surveyors and vets. </p>
<h2>But not always</h2>
<p>Students don’t always react to bad labour market news. Science added <a href="https://grattan.edu.au/wp-content/uploads/2018/01/demand_driven_facts_figures_SLNSW_13Feb.pdf">more than 12,000</a> commencing students between 2008 and 2016, as employment outcomes went <a href="https://www.afr.com/technology/panic-over-science-education-is-overdone-says-andrew-norton-20160406-go043o">from mediocre to terrible</a>. </p>
<p>The <a href="https://www.chiefscientist.gov.au/2013/05/the-future-of-science-in-australia/">Chief Scientist</a> and politicians promoted science, which may have misled students. The science experience is a reminder to policymakers they need to be careful about the signals they send to students. </p>
<h2>Offer attractive alternatives to university</h2>
<p>Although well-motivated by concerns about who has access to a university education, <a href="http://www.tanyaplibersek.com/media_release_labor_to_help_all_australians_get_the_chance_to_study_at_uni">Labor’s current talking up</a> of higher education may not be good advice to students in every case. The demand driven system has often responded to labour market signals, but some further moderation in the numbers of students attending university would make it easier for graduates to find professional jobs. </p>
<p>But if universities are to enrol fewer people, we should offer attractive alternatives to university education, rather than simply restricting university student numbers. Vocational education is one of those potential alternatives. Technical and trade employment is also growing, as the chart above shows. Thirty technical and trade occupations were <a href="https://docs.jobs.gov.au/documents/historical-list-skill-shortages-australia-0">in skills shortage in 2017</a>.</p>
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<strong>
Read more:
<a href="https://theconversation.com/vocational-education-and-training-sector-is-still-missing-out-on-government-funding-report-88863">Vocational education and training sector is still missing out on government funding: report</a>
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<p>Unfortunately, university demand driven funding coincided with chaos in vocational education, thanks to <a href="http://www.mitchellinstitute.org.au/reports/expenditure-on-education-and-training-in-australia-2017/">state governments cutting funding</a> for vocational education and the <a href="https://www.smh.com.au/politics/federal/how-australia-s-education-debacle-is-still-creating-victims-20180419-p4zal3.html">VET FEE-HELP fiasco</a>. </p>
<p>It’s hard for vocational education to compete with universities when students sometimes need to pay thousands of dollars out of pocket for their course, while higher education undergraduates can <a href="https://www.education.gov.au/higher-education-loan-program-help">defer all their tuition costs via HELP</a>. The student income support system is also biased against vocational education, with <a href="https://www.humanservices.gov.au/individuals/services/centrelink/youth-allowance-students-and-australian-apprentices/who-can-get-it/approved-courses-and-institutions#a2">restricted eligibility</a> and <a href="https://www.humanservices.gov.au/individuals/services/centrelink/student-start-loan/eligibility/approved-courses">lower payments</a>. </p>
<p>The policy status quo of capped higher education funding and a funding bias against vocational education will not serve us well. With restored demand driven funding and changes to vocational education, the tertiary education system would do a better job of matching students with the courses that maximise their long-term employment outcomes.</p><img src="https://counter.theconversation.com/content/102634/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Norton was a government-appointed co-reviewer of the demand driven system in 2014, and served on an expert panel advising the minister for higher education in 2016 and 2017. The demand driven system was one of the issues under consideration by the panel. </span></em></p>
If Labor is to once again uncap university funding, vocational education reform is a vital.
Andrew Norton, Higher Education Program Director, Grattan Institute
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/92539
2018-03-06T22:31:20Z
2018-03-06T22:31:20Z
Gender inequality is alive and kicking in technology
<figure><img src="https://images.theconversation.com/files/208895/original/file-20180305-65511-1vcd9tn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Students attend the Girls Learning Code computer workshop in Toronto in 2014. Women continue to be woefully under-represented in STEM, and abuse and harassment in the male-dominated field play a major role.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Chris Young</span></span></figcaption></figure><p>On International Women’s Day, it’s worth a harsh reminder: Women working in science, technology, engineering and mathematics (STEM) careers represent a mere 20 per cent of the current job force in the field. </p>
<p>According to <a href="http://www.statcan.gc.ca/pub/75-006-x/2013001/article/11874-eng.htm#a3">Statistics Canada</a>, women in STEM are also underpaid compared to their male counterparts. What’s more, more women than men enrol in university, but men with lower academic marks are more likely to choose STEM careers than women with higher marks. </p>
<p>Bigger studies on large populations <a href="http://www.statcan.gc.ca/pub/75-006-x/2013001/article/11874-eng.htm#a7">are unable to fully explain this phenomenon</a> and point to other possible factors and influences.</p>
<h2>What ‘influences’ keep women out of tech?</h2>
<p>There are a multitude of possible causes, such as differences in labour market expectations, family/work balance, differences in motivation, ambition, interests, self-esteem and self-confidence. But these purported causes only satisfy outsiders trying to explain the trend.</p>
<p>Any insider will tell you the real issue is that women are still victims of outdated stereotypes, even in the countries that pride themselves on gender equality. </p>
<p>This is true when accessing the STEM labour market, in school and in informal face-to-face and online communities. </p>
<p>Despite the advances women have made in the 20th century and the ongoing #MeToo movement, women working in fields of innovative and disruptive technologies continue to be targeted by gender discrimination and various forms of harassment, and <a href="https://www.tctmagazine.com/tctblogs/laura-griffiths-blog/beboldforchange-women-in-3d-printing/">they’re outnumbered</a>. </p>
<p>In our respective roles as a researcher and a vlogger living at two opposing ends of the world, my co-author Naomi Wu and I share a common base of experience. We are both self-taught coders and makers, we have both been victims of online harassment and abusive behaviour, and we have both presented our work under male pseudonyms. </p>
<p>Let’s take the topic of 3D printing. If you want to develop expertise, <a href="http://3dprintingfromscratch.com/common/how-to-build-a-3d-printer-from-scratch/">building your own 3D printer</a> is really the best way to learn how the machine operates, how to adjust and optimize it and how to design 3D objects. </p>
<p>This knowledge allows learners to solve real-life problems and it also develops creativity. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/208899/original/file-20180305-65511-1fdkuxh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/208899/original/file-20180305-65511-1fdkuxh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=454&fit=crop&dpr=1 600w, https://images.theconversation.com/files/208899/original/file-20180305-65511-1fdkuxh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=454&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/208899/original/file-20180305-65511-1fdkuxh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=454&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/208899/original/file-20180305-65511-1fdkuxh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=570&fit=crop&dpr=1 754w, https://images.theconversation.com/files/208899/original/file-20180305-65511-1fdkuxh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=570&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/208899/original/file-20180305-65511-1fdkuxh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=570&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Faith Lennox, 7, right, smiles as she holds a plastic prosthetics part with her newly 3D printed hand at the Build it Workspace in Los Alamitos, Calif.,in 2015. Lennox helped design the limb using a 3D printer.</span>
<span class="attribution"><span class="source">(AP Photo/Damian Dovarganes)</span></span>
</figcaption>
</figure>
<p>A savvy maker can buy a DIY kit from China and build their own 3D printer, thus obtaining the means of production of prototyped objects in the comfort of their own home. </p>
<p>Many informal online groups exist to support the community of makers who wish to construct open-source 3D kits that are not always easy to build. Sometimes there are faulty instructions. Other times, the printer version changes between the moment of production and the moment the customer receives it. Other times, the printer is simply challenging to build.</p>
<h2>Women face sexist abuse in online forums</h2>
<p>For that reason, there are many groups on Facebook and Reddit dedicated to troubleshooting 3D printing projects. </p>
<p>Some have thousands of members all over the world responding to questions at all hours. Anyone who has questions on how to build the structure, connect the wires to the electronic circuit board or calibrate the printer can post their question, document problems with photos or videos when possible, and the community is there to help them. </p>
<p>If the person asking the question is male, they’ll receive helpful advice virtually 100 per cent of the time. Not so if you’re a woman. </p>
<p>In these 3D printing online communities, as in the <a href="http://www.rize3d.com/blog/women-additive-manufacturing-have-we-moved-needle">3D printing industry</a>, women appear to be rare. </p>
<p>Women who post questions are often dismissed with comments such as:</p>
<p>“Your learning curve is quite steep. You should find a guy in your area with electronics knowledge who can help you. Lol!” </p>
<p>“C-nts should not build machines they don’t understand.” </p>
<p>“I don’t mean to be sexist, but this is not a place for stupid questions.” </p>
<p>These are actual comments we have received.</p>
<p>To counter this, women create fake accounts with male pseudonyms, which spare them the abuse and allow them to solve their problems efficiently. </p>
<h2>Scant progress</h2>
<p>When we look at the current situation, it’s barely evolved from the era when Amantine Lucile Aurore Dupin wrote under <a href="http://www.notablebiographies.com/Ro-Sc/Sand-George.html">the male pseudonym George Sand</a> to gain credibility for her literary criticism and political texts in the 19th century. </p>
<p>The difference is that it’s 2018, and 3D printing is becoming one of the most important industries of the 21st century.</p>
<p>As we head towards the <a href="https://toplink.weforum.org/knowledge/insight/a1Gb0000001RIhBEAW/explore/summary">Fourth Industrial Revolution</a>, workers wishing to tap into the high-tech industry will need strong analytical skills, including the ability to make sense of torrents of data emerging from technological disruptions, and social and collaboration skills, such as emotional intelligence and working with others who have different skill sets. </p>
<p>And of course they need <a href="http://www3.weforum.org/docs/WEF_FOJ_Executive_Summary_Jobs.pdf">programming (coding) skills and proficiency in operating complex equipment</a>. </p>
<p>By 2020, <a href="https://ww.ictc-ctic.ca/wp-content/uploads/2016/03/ICTC_DigitalTalent2020_ENGLISH_FINAL_March2016.pdf">there will be more than 200,000 new high-tech jobs</a> in Canada, and not enough qualified people to fill them. </p>
<p>Women can and should enrol in college or university programs to develop many of these high-tech skills, but the truth is that with the rapid developments in emergent and disruptive technologies, including 3D printing, they also need to engage in self-directed learning just to stay on top of things. </p>
<p>Concretely, this means taking time to read articles, watch videos, and keep track of what’s new on top of their normal day-to-day workload.</p>
<h2>‘Self-directed learning’</h2>
<p>Regardless of gender, becoming skilled in this industry requires spending time on task, sitting down and following step-by-step instructions to try things out, persisting in the face of errors, persevering and brushing up on math skills when necessary.</p>
<p>This can be done either by engaging in self-directed learning or by finding a way to get tutoring, because math skills are key to women pursuing STEM careers.</p>
<p>According to Statistics Canada, <a href="http://www.statcan.gc.ca/pub/75-006-x/2013001/article/11874-eng.htm">women who score higher</a>
at age 15 <a href="http://www.oecd.org/pisa/">on the OECD’s</a> Youth in Transition Survey and its Program for International Student Assessment tests are more likely to choose STEM careers. </p>
<p>Whether it’s in the context of professional STEM careers or trying to engage in do-it-yourself tinkering and innovating with open-source and disruptive technology, women are faced with gender discrimination, partly due to their under-representation in the field and partly due to outdated stereotypes.</p>
<p>Nonetheless, there are certainly many male makers who are supportive of women. </p>
<p>The best male makers in the community recognize women for their skills and accomplishments. They don’t get hung up on whether it’s a male, a female or a transgender person handling the tools or asking the questions. </p>
<h2>‘Thicker skin’ is no solution</h2>
<p>Of course women who are in STEM can just develop thicker skins and simply ignore the haters. The downside to that strategy, however, is that it perpetuates the problems in the long run. It normalizes hate, creates tolerance of aggressive behaviours and encourages <a href="https://theconversation.com/dont-be-a-bystander-five-steps-to-fight-cyberbullying-91440">bystanders to remain silent when they see aggression</a>. </p>
<p>It also erodes the personal ambition, income, careers and reputations of women in STEM fields. </p>
<p>These forms of aggression are part of the glass ceiling for high-tech jobs. </p>
<p>They prevent girls and young women, who may be less able to deal with the abuse when simply trying to practise a hobby or complete a school project, from developing an interest in STEM in the future. This is the greatest harm.</p>
<p>Are we still really wondering what are the “other” factors and influences that prevent women from entering male-dominated STEM careers?</p>
<hr>
<p><em>Co-written with Naomi Wu, an engineer and video blogger in China and advocate for women in tech. Wu was named one of the most influential women in 3D printing on International Women’s Day 2017.</em></p><img src="https://counter.theconversation.com/content/92539/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ann-Louise Davidson receives funding from SSHRC. </span></em></p>
So-called experts say there are several practical reasons why so few women are in STEM. Any insider will tell you that the real issue is that women are still victims of outdated stereotypes and abuse.
Ann-Louise Davidson, Concordia University Research Chair, Maker culture; Associate Professor, Educational Technology, Concordia University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/90104
2018-01-16T19:13:51Z
2018-01-16T19:13:51Z
The problem isn’t unskilled graduates, it’s a lack of full-time job opportunities
<figure><img src="https://images.theconversation.com/files/202022/original/file-20180116-53289-12i0rsg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The problem doesn't appear to be with the relevance of qualifications and skillsets to employment, but rather with the scarcity of employment. </span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The Coalition government’s position on young people is best captured by the phrase <a href="http://www.budget.gov.au/2014-15/content/glossy/welfare/html/welfare_03.htm">“earning or learning”</a>. If you are under 30, the government expects you to be studying in an educational institute or working for a living. </p>
<p>Leaving the politics aside, the relationship between education and employment is usually a good indicator of labour market health: generally speaking, the more educated you are, the more earning potential you have.</p>
<p>So what happens when this relationship comes undone? Unfortunately, young people have been finding this out the hard way.</p>
<p>For <a href="https://theconversation.com/au/topics/gen-y-1496">“Gen Y”</a> (born in the 1980s and 1990s), it seems being the most educated generation does not necessarily translate to being the most employed generation. Recently, this fact has been highlighted by the release of the <a href="https://www.qilt.edu.au/docs/default-source/gos-reports/2017/2017_gos_national_report_final_accessiblea45d8791b1e86477b58fff00006709da.pdf?sfvrsn=ceb5e33c_4&_cldee=c29waGllLmhlaXplckB0aGVjb252ZXJzYXRpb24uZWR1LmF1&recipientid=contact-09dc957fbd87e7118120e0071b66a691-0930c8235d7d4a10bd63a0fdd8972b65&esid=f8ef3ba5-1cf7-e711-8134-e0071b68f7c1">Graduate Outcomes Survey</a> and <a href="https://www.qilt.edu.au/docs/default-source/ess/ess-2017/2017_ess_national_report_final.pdf?sfvrsn=19b2e33c_10">Employer Satisfaction Survey</a>. Together, these reports capture the mood of the current labour market. </p>
<h2>The transition from study to work</h2>
<p>The Graduate Outcomes Survey, canvasses graduates four months after graduation, asking them a range of questions. This includes asking graduates about the type of work they do, how much they earn, and how satisfied they are with their employment. It also covers more complex issues, like skills utilisation, demographic inequalities and how much study prepares graduates for work.</p>
<p>The good news is the overall number of undergraduates in full-time employment has risen to 71.8%, up from 68.1% in 2014. The bad news is this is still well below the pre-<a href="https://www.rba.gov.au/education/resources/explainers/pdf/the-global-financial-crisis.pdf">Global Financial Crisis</a> employment level of 85.2% in 2008. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/walking-the-line-on-gfc-times-17153">Walking the line on GFC times</a>
</strong>
</em>
</p>
<hr>
<p>Worse still, the latest Household, Income and Labour Dynamics in Australia survey <a href="http://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0010/2437426/HILDA-SR-med-res.pdf">data</a> shows graduate wages are shrinking over time. For those who graduated between 2006-09, the average weekly wage was A$947.31 in their first year of graduate employment. For those who finished university between 2012-13, the graduate wage shrunk to A$791.58 a week - and that’s before factoring in inflation.</p>
<p>There are also uneven rates of employment, as some areas of study provide better employment prospects than others.</p>
<hr>
<p><iframe id="D9YGQ" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/D9YGQ/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<hr>
<p>Some of this is unsurprising. Medicine continues to provide full-time employment, while creative arts offers less in the way of traditional employment outcomes. But despite the emphasis on <a href="http://www.chiefscientist.gov.au/wp-content/uploads/STEMstrategy290713FINALweb.pdf">STEM</a> graduates in the government’s <a href="https://www.innovation.gov.au/page/national-innovation-and-science-agenda-report">innovation agenda</a>, businesses are failing to utilise the existing scientific workforce.</p>
<p>The question of skills utilisation proves to be similarly troublesome. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/young-educated-and-underemployed-are-we-building-a-nation-of-phd-baristas-53104">Young, educated and underemployed: are we building a nation of PhD baristas?</a>
</strong>
</em>
</p>
<hr>
<p>Two out of three graduates with full-time work reported they took a job unrelated to their study area, due to external labour market factors. These factors include employment relevant to their study not being available and employers wanting graduates to have more work experience, as well as graduates only being able to find part-time or casual work. </p>
<p>Unsurprisingly, part-time work is becoming a more likely employment pathway for graduates. Given that over a third of undergraduates are working part-time, it might be tempting to assume this shift away from full time work reflects a choice made by young people. </p>
<p>Contrary to claims young people want or need “flexibility” (like those made by business leaders such as Myer’s <a href="http://www.afr.com/news/economy/employment/workforce-and-productivity-summit-regulation-lags-millennials-flexibility-20151208-gliza9">David Umbers</a> and PwC’s <a href="https://www.linkedin.com/pulse/just-graduated-dont-know-what-luke-sayers/?trk=prof-post">Luke Sayers</a>), recent
<a href="http://education.unimelb.edu.au/__data/assets/pdf_file/0005/1624532/LifePatterns_10YearFollowingGenY_FINAL_webversion.pdf">research</a> shows Gen Y continue to desire full-time, secure employment just like previous generations. </p>
<h2>The view from the board room</h2>
<p>Turning to the Employer Satisfaction Survey, 84% of supervisors reported overall satisfaction with the quality of graduates who worked for them. While 42% of graduates reported their skillset wasn’t relevant to their employment, 64% of their supervisors saw relevant skillsets in graduates. Similarly, 93% of supervisors believed the degrees obtained by their employees prepared them well for employment.</p>
<p>But employers felt some aspects of undergraduate qualifications prepared graduates for employment more than others.</p>
<hr>
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<hr>
<p>Domain specific knowledge is the most valuable skill qualifications offer employers. Conversely, it appears employers don’t see qualifications as offering much in the way of technical, adaptive, or foundational skills.</p>
<p>Interestingly, none of the elite <a href="https://go8.edu.au/">Group of 8</a> universities placed in the top five for employer satisfaction. This honour went to James Cook University, University of Notre Dame, University of the Sunshine Coast, Bond University and the University of Wollongong. Only the University of Queensland and the University of Melbourne made it into the top ten.</p>
<p>It appears prestige is not rated as highly by employers as technical skillsets and domain specific knowledge.</p>
<h2>Where to from here?</h2>
<p>While there are certainly areas universities could improve to increase employer satisfaction, employers seem happy with the quality of graduates. The problem doesn’t appear to be with the relevance of qualifications and skillsets to employment, but rather with the scarcity of employment. </p>
<p>So, if <a href="http://www.abc.net.au/news/2017-11-29/university-students-dropping-out-in-record-numbers/9203636">young people are learning</a>, whose responsibility is it to make sure they’re earning?</p>
<p>More and <a href="https://theconversation.com/too-many-graduates-not-enough-jobs-universities-profits-and-clinical-need-13482">more students are graduating every year</a>, but businesses and the public service aren’t providing enough graduate level opportunities. </p>
<p>Given the commitment Education Minister Simon Birmingham has shown to <a href="http://www.theaustralian.com.au/higher-education/education-minister-says-uni-cuts-wont-hit-fees-funding/news-story/bcbbd18993586f4ce253b9c1ffe7092f">cutting university funding</a>, it seems universities will have to do more with less. If this <a href="https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r5869">legislation</a> comes into effect, the government could reinvest those savings in graduate programs that offer more technical training and vocational experience. </p>
<p>Particularly given the lack of opportunities offered to science and maths graduates, an <a href="https://theconversation.com/we-must-do-something-about-jobs-for-young-people-in-a-world-of-automation-68342">increase in funding</a> to the CSIRO and research institutes could provide for greater utilisation of STEM graduates.</p>
<p>Ultimately, we need to learn from both reports and design policy that gives young people a chance to start earning.</p><img src="https://counter.theconversation.com/content/90104/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Shirley Jackson receives funding from the Australian Research Council. He is affiliated with the Australian Manufacturing Workers Union, the National Tertiary Education Union and the Australian Labor Party.</span></em></p>
The government claims university degrees are failing businesses, but analysis of the latest graduate outcome and employer satisfaction surveys tells us the problem is with underemployment.
Shirley Jackson, PhD Candidate in Political Economy, The University of Melbourne
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/82188
2017-08-18T10:42:17Z
2017-08-18T10:42:17Z
Want more women in top positions? Provide them with more flexibility at work
<figure><img src="https://images.theconversation.com/files/182268/original/file-20170816-32682-o14z7u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>The recent BBC report on the pay of its top earners laid bare the disparities between men and women’s earnings. But it should come as no surprise. The gender pay gap has been stubbornly stagnant over the past decade. According to the EU (which calculates the gap based on hourly pay differences between men and women), men earn <a href="http://ec.europa.eu/justice/gender-equality/files/gender_pay_gap/2016/gpg_country_factsheet_uk_2016_en.pdf">around 20%</a> more. And the UK’s official statistics group, which calculates the pay gap of full-time earnings, men earn an average of <a href="http://visual.ons.gov.uk/the-gender-pay-gap-what-is-it-and-what-affects-it/">about 10%</a> more than women.</p>
<p>One core reason for this difference is the tendency for women to drop out of the labour market or <a href="https://www.economist.com/blogs/graphicdetail/2017/08/daily-chart?fsrc=scn/fb/te/bl/ed/">move into (bad and low-paid)</a> part-time jobs after having children. Employment data makes this clear.</p>
<p><iframe id="cirPJ" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/cirPJ/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>For example, in 2015, 85% of women between the ages of 25‒49 without children were employed, exactly the same proportion as childless men employed in the same age group. But women are likely to drop out of the labour market or reduce their hours after childbirth, while men are more likely to increase their hours and increase their labour market participation. </p>
<p>The stats show that there is a sharp drop in the employment rate of women with children – to 71% – while the employment rate of fathers rises to <a href="http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=lfst_hheredty">more than 90%</a> . Further, only 16% of all women between the ages of 25‒49 without dependent children worked part-time, while this proportion more than triples for women in the same age group with children <a href="http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=lfst_hhptety">to 52%</a> .</p>
<p>It isn’t just about working part-time but the quality of part-time work is also a factor. It is <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0297.2007.02116.x/abstract">widely known</a> that women usually switch to lower-paying, lower-quality jobs when moving into part-time work, due to the lack of high-quality well-paid part-time jobs in the UK .</p>
<p>So the question arises: what can we do to help women maintain their working patterns after childbirth, without sacrificing their careers? My research into flexible working arrangements shows that they can help women maintain their working hours and stay in employment.</p>
<h2>Introducing flexitime</h2>
<p>Obviously the more flexibility you have at work the better you are able to shape work around family demands. I myself am a good example of this. Coming back to work from having taken six months of maternity leave after the birth of my daughter, I would not have been able to go back to work full-time if it wasn’t for the flexibility I had at work. Given the great amount of freedom you have as an academic to work whenever and wherever you want (within limits), I was able to work full-time by working from home and catching up on work during the weekends and evenings when my baby was asleep or I had other childcare support available. It was hard and I lost a lot of sleep – but through such flexibility I was able to maintain my research career.</p>
<p>I wondered whether similar patterns could be observed for other women in the UK. To investigate, my colleague Mariska van der Horst and I used a data set of 40,000 households to see whether being able to have control over when you work and where you work influences women’s likelihood of remaining in employment and not reducing their working hours significantly (of more than 4 hours) after the birth of their children. The results were remarkable.</p>
<p>In our research, which was published in the journal <a href="http://journals.sagepub.com/eprint/mGMYzedaJQU9XHuBZHnJ/full">Human Relations</a>, we found that women who were able to use flexitime were only half as likely to reduce their working hours after the birth of their child. This effect was especially the case for the women who used flexitime prior to the birth of their child as well as after. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/181393/original/file-20170808-10926-14rh8bm.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/181393/original/file-20170808-10926-14rh8bm.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/181393/original/file-20170808-10926-14rh8bm.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=448&fit=crop&dpr=1 600w, https://images.theconversation.com/files/181393/original/file-20170808-10926-14rh8bm.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=448&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/181393/original/file-20170808-10926-14rh8bm.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=448&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/181393/original/file-20170808-10926-14rh8bm.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=563&fit=crop&dpr=1 754w, https://images.theconversation.com/files/181393/original/file-20170808-10926-14rh8bm.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=563&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/181393/original/file-20170808-10926-14rh8bm.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=563&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><a class="source" href="http://wafproject.org/research-outputs/final-report/">Heejung Chung</a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>In the overall sample, more than half the women reduced their working hours after the birth of their child. But less than a quarter of the women who were able to use flexitime reduced their hours, with similar results for women who were able to work from home if they wanted to. This shows that, given the chance to work flexibly, many women would stay in work and maintain their hours and their pay after having children. </p>
<p>As I’ve found in <a href="http://www.tandfonline.com/doi/full/10.1080/13876988.2017.1353745?scroll=top&needAccess=true">previous research</a>, not all jobs allow for flexible work arrangements – and they are not necessarily provided to those in most need of them. Rather, they tend to be given more to high-skilled, higher educated workers in supervisory roles. Another <a href="http://wafproject.org/mums-forced-out-due-to-lack-of-flexible-jobs/">recent study</a> found that a large number of mothers are forced to leave their jobs after flexible working requests were turned down.</p>
<p>It is not only a matter of justice but also a matter of society’s economic prosperity and development to ensure that women are able to remain in the labour market across different stages of the life cycle, including childbirth. The right to flexible working is crucial if we are to tackle the problem of gender inequality in the labour market – especially when it comes to having a balance at the top of the career ladder.</p><img src="https://counter.theconversation.com/content/82188/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Heejung Chung receives funding from the the ESRC for the project "Working-time flexibility and work-life balance" (Grant ref: ES/K009699/1)</span></em></p>
Flexible working reduces the likelihood that women cut their hours or leave the labour market after childbirth.
Heejung Chung, Senior Lecturer in Sociology and Social Policy, University of Kent
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/75392
2017-04-03T06:44:05Z
2017-04-03T06:44:05Z
Three charts on: the incredible shrinking renewable energy job market
<p><em>This is the first piece in our new Three Charts series, in which we aim to highlight interesting trends in three simple charts.</em> </p>
<p>Australia is embarking on a transition from an electricity system that relies largely on coal to one that may one day be 100% renewable. Last week’s <a href="https://theconversation.com/hazelwood-power-station-from-modernist-icon-to-greenhouse-pariah-75217">closure</a> of the Hazelwood coal-fired generator was an important milestone on this path.</p>
<p>The development of the renewables sector has not, however, been a smooth ride.</p>
<p>Estimates released by the <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/4631.0">Australian Bureau of Statistics</a> suggest that the number of direct full-time equivalent jobs in renewable energy activities has continued to fall from its 2011-12 peak. Over a period in which the Australian economy saw <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Feb%202017?OpenDocument">around 600,000</a> additional people get jobs, employment in the renewables sector has been going backwards.</p>
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<h2>A small employer</h2>
<p>The renewables sector is estimated to have directly provided only 11,150 full-time equivalent jobs in 2015-16. The Australian labour force <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Feb%202017?OpenDocument">exceeds 12.6 million</a> people. The sector thus makes a small contribution to national employment, although one that is quite important in some local economies.</p>
<p>Around half of the jobs in renewables in 2015-16 were in installing (and maintaining) rooftop solar systems. Hydroelectricity generation provides 1,840 full-time equivalent jobs, a number that is likely to increase if <a href="https://theconversation.com/how-pushing-water-uphill-can-solve-our-renewable-energy-issues-28196">pumped storage</a> is to make a larger contribution to smoothing Australia’s electricity supply. Biomass provides 1,430 full-time jobs, and the wind industry around 620.</p>
<p>The fact that renewables is a small employer - especially once installations are up and running - is not a bad thing. If renewables were labour-intensive, they would be expensive.</p>
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<h2>Up then down</h2>
<p>The rise and then fall in renewables jobs is primarily a result of what has happened to installations of rooftop solar. The annual number of small-scale solar installations (PV and solar water heaters) <a href="http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Postcode-data-for-small-scale-installations#Smallscale-installations-by-installation-year">skyrocketed</a> over the four years to 2011. This rapid growth was spurred by generous <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4631.0Explanatory%20Notes12015-16">feed-in-tariffs</a>, <a href="https://web.archive.org/web/20100527035425/http://www.environment.gov.au/energyefficiency/solarhotwater/index.html">rebates</a>, and <a href="http://www.climatechangeauthority.gov.au/chapter-5-small-scale-renewable-energy-scheme">rules for federal government solar credits</a>. There was also a <a href="https://www.anao.gov.au/work/performance-audit/management-national-solar-schools-program">national program</a> to install solar panels on schools.</p>
<p>When these arrangements were curtailed, uptake fell. Annual installations of small-scale solar PV and water heaters are <a href="http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Postcode-data-for-small-scale-installations#Smallscale-installations-by-installation-year">down by more than 60%</a> from their peak. We are still installing a lot of new systems (more than 183,000 in 2016), but fewer than before. Employment estimates for small-scale solar closely track installation rates. The decline in employment in the wind energy sector is also worth noting. </p>
<p>The largest fall in renewables jobs has been in Queensland, a state that substantially tightened its feed-in-tariff scheme for rooftop solar in several steps from 2011 on. Queensland also holds the title of having Australia’s highest residential rooftop solar PV penetration rate (<a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/4631.0">32%</a>). South Australia is not far behind, at 31%.</p>
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<h2>Ramping up large-scale renewables</h2>
<p>Recent years of policy <a href="https://theconversation.com/governments-ret-compromise-guarantees-uncertainty-for-renewables-41524">uncertainty</a> and backtracking have not helped the rollout of large-scale renewables. The <a href="https://theconversation.com/obituary-australias-carbon-price-29217">termination</a> of Australia’s carbon price and <a href="https://theconversation.com/how-will-the-reduced-renewable-energy-target-affect-investment-41505">downwards renegotiation</a> of the Renewable Energy Target had <a href="http://reneweconomy.com.au/australia-large-scale-renewable-investment-plunges-again-to-near-record-low-74163/">chilling</a> effects on investment.</p>
<p>Those events are now behind us. With continued <a href="https://theconversation.com/renewables-are-getting-cheaper-all-the-time-heres-why-64799">reductions</a> in the cost of renewables, brighter days for the sector appear to be ahead, especially if our governments get policy settings right.</p>
<p>We can <a href="http://www.abc.net.au/news/2017-03-29/australia-on-cusp-of-large-scale-solar-boom-experts-say/8377226?pfmredir=sm">expect</a> particularly rapid growth in jobs installing large-scale solar PV. Just last week, for example, it was <a href="http://www.abc.net.au/news/2017-03-30/new-solar-project-announced-for-sa-riverland/8400952">announced</a> that South Australia is to have a large new solar farm.</p><img src="https://counter.theconversation.com/content/75392/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paul Burke receives funding under the Australian Research Council's Discovery Early Career Researcher Award scheme.</span></em></p>
Estimates released by the Australian Bureau of Statistics suggest that the number of direct full-time equivalent jobs in renewable energy activities has continued to fall from its 2011-12 peak.
Paul Burke, Fellow, Crawford School, Australian National University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/69852
2017-02-09T07:34:30Z
2017-02-09T07:34:30Z
Leading economists agree: closing borders is not the answer to inequality
<p>US President Donald Trump wants to <a href="https://theconversation.com/the-wall-and-the-beast-trumps-triumph-from-the-mexican-side-of-the-border-68559">build a wall</a> along the US-Mexican border. Britain wants to retreat into its shell to become an <a href="https://theconversation.com/dear-theresa-may-if-you-want-partnership-theres-nothing-better-than-eu-membership-71429">isolated island state</a>.</p>
<p>In France, far-right presidential candidate Marine Le Pen <a href="https://www.theguardian.com/world/2017/feb/05/marine-le-pen-promises-liberation-from-the-eu-with-france-first-policies">launched her campaign</a> by saying, “The divide is no longer between the left and the right, but between the patriots and the globalists.”</p>
<p>Enthusiasm for inward-looking, protectionist economic agendas is sweeping across Europe, leaving <a href="http://edition.cnn.com/2016/10/07/opinions/xenophobia-over-rationality-mammone/">xenophobic hatred</a> in its wake. </p>
<p>Clearly, the experience of the past three decades of globalisation has produced massive dissatisfaction: so much that naïve, misplaced and often frightening measures are seen as genuine solutions by large parts of the electorate in the richest nations of the world.</p>
<p><a href="https://www.theguardian.com/business/2017/jan/11/inequality-world-economy-wef-brexit-donald-trump-world-economic-forum-risk-report">Rising inequality</a>, which has accompanied globalisation, has sprung to the fore as a key concern among economists, politicians and the public. The latest <a href="https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-economy-for-99-percent-160117-en.pdf">report by Oxfam</a> documented this rise, and the figures were shocking, even to those of us who might already be convinced about the gravity of the problem: just <a href="https://theconversation.com/do-eight-men-really-control-the-same-wealth-as-the-poorest-half-of-the-global-population-71406">eight men</a> hold as much wealth as the bottom half of the world population. </p>
<p>What needs to be asked is the following: why is the world economy at this pass? Is it a labour-versus-labour problem? Would shutting borders lead to greater equality of incomes within countries? Would the poor and working class in developed countries, who are feeling the heat of unemployment, depressed wages and insecure futures, regain their (mostly imagined) former glory if their countries shut down their borders? </p>
<p>Or is it the case that gains from globalisation, instead of trickling down, have been sucked upwards towards a tiny elite, making an already rich minority even richer? And that this elite resides within, not outside, their countries?</p>
<h2>Labour vs capital</h2>
<p>In September 2016, I was part of a group of 13 economists, along with Nobel laureate Joseph Stiglitz and three other chief economists of the World Bank, who met in Saltsjobaden, near Stockholm, to deliberate on the main challenges facing the global economy, and draft a short document highlighting some key issues. </p>
<p>This consensus document, the <a href="http://www.sida.se/stockholmstatement">Stockholm Statement</a>, was issued after intensive discussions within this small group. Our idea was to keep the statement short and focused on the most important issues.</p>
<p>One of our main concerns was the phenomenon of rising inequality over the past three decades. The advent of advanced technology has meant that jobs can be outsourced, a point also <a href="https://www.wsj.com/articles/president-trump-focuses-on-trade-with-very-major-border-tax-promise-1485183598">highlighted by Donald Trump</a>. </p>
<p>While this has meant an expansion of opportunities for workers overall, the workers in developed countries often view this, or are made to view this, as being against their interest. They are made to feel that jobs that were rightfully theirs were taken away by workers in other countries, or by immigrants who are willing to work for low wages.</p>
<p>This is a labour-versus-capital, or labour-versus-technology, problem. <a href="https://www.oecd.org/employment/Automation-and-independent-work-in-a-digital-economy-2016.pdf">Automation</a> has meant that even periods of high economic growth have not been periods of high growth of jobs. In periods of low growth or recession, such as we have seen in the US and Europe since the 2008 financial crisis, the already gloomy picture becomes even bleaker. </p>
<p>While job and wages have grown slower compared to national incomes, salaries at the top have not only kept pace, but their rate of growth might even be higher. Thus, the gap between salaries of CEOs and top ranking managers and workers within firms has been increasing. The Oxfam report <a href="https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-economy-for-99-percent-160117-en.pdf">quotes</a> from Thomas Piketty’s new research showing that in the US, in the past 30 years, the growth in the incomes of the bottom 50% has been zero, whereas the growth in the incomes of the top 1% has been 300%.</p>
<p>Thus, the real reason for depressed incomes and unemployment of the working classes in developed countries is not that workers from other countries are taking jobs. </p>
<p>The two main culprits are the slow rate of creation of new jobs, and the increasing inequality in the share of labour (wages) and capital (profits) within their own countries.</p>
<h2>What we can do</h2>
<p>Based on this analysis, we suggested three major policy responses.</p>
<p>First, we should invest in human capital, increasing skills alongside developing new technology. This would boost labour income as technology improves.</p>
<p>Second, governments have to legislate to transfer income within countries. This means new taxes, and sharing profits. The rise of technology does not have to mean the end of workers’ rights; specific labour legislation should be put in place to ensure this.</p>
<p>Finally, we must promote policies that cross borders. This means international organisation such as the UN and the World Bank should encourage policy harmonisation between nations. These policies must not just favour rich, industrialised nations, they should also allow emerging economies a voice in the debate.</p>
<h2>A new social contract</h2>
<p>The fact that the deliberations for the Stockholm Statement took place in Saltsjobaden is significant. It was here in 1938 that the <a href="https://www.eurofound.europa.eu/efemiredictionary/saltsjbaden-agreement">social contract</a> between labour and capital in Sweden, which was later expanded to include government, was sealed. </p>
<p>The contract specified the process of collective bargaining and management, and the focus was on negotiation and consultation, rather than hostility. Both the process and content of the historical Saltsjobaden Agreement hold lessons for management of our troubled times. </p>
<p>Our optimism for the future might seem like a mirage in light of recent political events. </p>
<p>But just as the collective voice of the majority today seems to favour a quick-fix, non-solution to rising inequality, our hope is that an articulation of the actual reasons behind rising inequality and insistence on a reasoned, balanced policy response could provide the real solutions needed to address the widening gap between rich and poor.</p><img src="https://counter.theconversation.com/content/69852/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ashwini Deshpande does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
The answer to job losses is not economic protectionism, but a strengthening of workers’ rights.
Ashwini Deshpande, Professor, Department of Economics,, University of Delhi
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/67869
2016-11-16T07:33:07Z
2016-11-16T07:33:07Z
Taking on the challenge of getting refugees into the job market in Sweden
<p>Sweden is one of the few countries in Europe that has provided protection to a large number of refugees fleeing the war zones of Syria, Afghanistan and Iraq. </p>
<p>Despite its relatively small population of 10 million, Sweden had the highest number of individuals seeking asylum per capita <a href="http://ec.europa.eu/eurostat/statistics-explained/index.php/Asylum_statistics">(163,000) in Europe in 2015</a>. The large number of refugees who have gained residence in Sweden over the past couple of years constitute a major challenge to Swedish society and, especially to the Swedish labour market.</p>
<p>According to a recent report from the OECD, only 22% of newly-arrived men and 8% of women <a href="http://ekke.gr/ocd/wp-content/uploads/2014/12/SOPEMI-2014-E.pdf">had employment</a> after one or two years of introductory programmes. But the long-term employment rates of previously-arrived refugees in Sweden are more favourable and lead us to believe that the numbers above will grow within the next few years. </p>
<p>As reported by the Swedish Migration Delegation, only <a href="http://www.delmi.se/arbetsmarknad#!/integrationspolitik-och-arbetsmarknad">30% of refugees</a> who arrived between 1997 and 1999 were employed after two years of residency in Sweden, but this number jumped to 65% after ten years in the country. Despite the fact that this figure is still below the Swedish <a href="http://ec.europa.eu/eurostat/statistics-explained/index.php/Employment_statistics">average employment rate</a> of about 80%, it is illustrative of the gradual growth in employment rates for refugees.</p>
<p>The number of first-time asylum applications in Europe for 2015 reached 1.3 million, <a href="http://ec.europa.eu/eurostat/statistics-explained/index.php/Asylum_statistics">three times more than in 2013</a>. The spike in arrivals in the past year has put significant pressure on receiving countries, such as Sweden and Germany, and on the resources allocated to integrate refugees. The main focus of introduction programmes in Sweden and other European countries has been on labour market integration. </p>
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<h2>Migration in Sweden</h2>
<p>Of course, this is not the first time in history that Sweden has received large numbers of asylum seekers and tried to incorporate them into the labour market. During World War II and directly after, Sweden accepted refugees from Poland, Finland and the Baltic states, as well as Jewish refugees from Denmark and Norway. The goal of Swedish integration policies then was to employ and resettle refugees in parts of the country where there was a high demand for labour.</p>
<p>Since the 1950s, when Sweden accepted Hungarian refugees, and especially over the past three decades, Swedish integration policies have continued developing to become more <a href="http://www.mipex.eu/sweden-s-migration-policy">encompassing and ambitious</a>. </p>
<p>The <a href="http://www.government.se/contentassets/b055a941e7a247348f1acf6ade2fd876/swedish-integration-policy-fact-sheet-in-english">current policy</a> was adopted in 2010 with the goal of facilitating the integration of refugees into the Swedish job market. Refugees are offered an introduction program that includes basic Swedish language training and civic and labour market orientation courses for up to two years.</p>
<h2>Why integration is hard</h2>
<p>Despite these efforts, the labour market integration of refugees in general, and resettled refugees in particular, has been characterised as having a <a href="http://wol.iza.org/articles/integrating-refugees-into-labor-markets-1.pdf">slower pace</a>, compared to that of family reunion migrants and labour migrants. Of course, refugees – unlike labour migrants – are not selected primarily for their skills. It will naturally take longer for them to match the demand in the host country.</p>
<p>There are also other reasons why it’s harder for refugees to access the job market. For example, the skills and credentials of refugees quickly depreciate due to difficulties in getting their qualifications accredited in Sweden. Refugees are also treated less favourably than labour migrants or family reunion migrants by their host countries, and may have health issues due to the persecution they have suffered.</p>
<p><a href="http://wol.iza.org/articles/integrating-refugees-into-labor-markets-1.pdf">Studies</a> on the integration of refugees in Sweden and other immigrant-receiving countries, such as Canada, the US, the Netherlands, the UK and Australia, also reveal substantial differences among immigrants based on their country of birth. In Sweden, for example, immigrants from former Yugoslavian countries show higher employment rates than those coming from <a href="http://www.migrationpolicy.org/research/catching-labor-market-outcomes-new-immigrants-sweden">Turkey, Iran or Iraq</a>. </p>
<p>Successful integration rates also <a href="http://www.tandfonline.com/doi/abs/10.1080/1369183X.2013.849569">differ between subcategories of refugees</a>: asylum refugees versus resettled refugees. The main difference between asylum refugees and resettled refugees is that the former apply for asylum at the border of the destination country whereas the latter are resettled from UNHCR refugee camps or elsewhere. </p>
<p>In 2007, the <a href="http://ftp.iza.org/dp6924.pdf">employment rates</a> of male and female resettled refugees who had lived in Sweden for ten years were 67% and 74%, respectively, whereas the corresponding numbers for asylum refugees were 79% and 78%. These figures do not show the employment of reunited family members of refugees, as they are included under the family migration category.</p>
<p>The employment gap between the two refugee categories has been explained by differences in settlement policy. Resettled refugees are, upon arrival, located in municipalities where housing is available but where employment opportunities are often lacking. </p>
<p>Asylum refugees, on the other hand, are given a choice of where to live, and often choose bigger cities where they have relatives and friends who can help them through networks, contacts and advice. So asylum refugees tend to do better when it comes to integration. </p>
<h2>Better integration</h2>
<p>There is no doubt that the current refugee inflow into Sweden has put extra pressure on the Swedish job market. </p>
<p>Specific policy initiatives to speed up the labour market integration of newly-arrived refugees could include placing them in municipalities with low unemployment rates, better evaluating their skills, and improving language courses by connecting the courses directly to the needs of the job market.</p>
<p>Integration policies should address the specific knowledge gaps of newly arrived refugees in relation to labour market demand in order to reduce the mismatch between their skills and those needed in the Swedish job market. </p>
<p>All this will be beneficial not only for refugees but also for Swedish society as a whole. </p>
<p><em>This is the third in a series of articles in partnership with UNU-WIDER and EconFilms on responding to crises worldwide.</em></p><img src="https://counter.theconversation.com/content/67869/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nahikari Irastorza has received funding from the Basque Government and the EU under the 7th Framework Programme.</span></em></p><p class="fine-print"><em><span>Pieter Bevelander receives funding from New Opportunities for Research Funding Agency Co-operation in Europe.</span></em></p>
Job prospects are not good for newly arrived refugees in Sweden. But better integration programmes will help.
Nahikari Irastorza, Willy Brandt Research Fellow, Malmö University
Pieter Bevelander, Professor, Malmö University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/67457
2016-10-27T19:09:29Z
2016-10-27T19:09:29Z
FactCheck: Has the job market got so bad that ‘people have stopped looking for work’?
<blockquote>
<p>No wonder, when you have a participation rate that’s in free fall. Last month there was a fall by 0.2%, another 0.2%, it is now at 64.5%. What that indicates is that people have stopped looking for work. <strong>– Shadow minister for employment and workplace relations, Brendan O'Connor, doorstop <a href="https://cdn.theconversation.com/static_files/files/21/67457-2016-10-25-factcheck-brendan-oconnor-Transcript.pdf?1518059364">interview</a>, October 20, 2016.</strong></p>
</blockquote>
<p>When the Australian Bureau of Statistics (ABS) released the September <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0">Labour Force Survey</a> data, shadow minister for employment and workplace relations Brendan O'Connor said the labour market participation rate was in “free fall” and that “people have stopped looking for work”.</p>
<p>Is that right?</p>
<h2>Checking the source</h2>
<p>The labour force participation rate is the number of people in the labour force (either employed or looking for work) expressed as a percentage of the civilian population aged 15 years and over.</p>
<p>When asked for a source to support his assertion, a spokesman for Brendan O'Connor told The Conversation:</p>
<blockquote>
<p>You’ll see in the screen grab (figure 1), which is sourced from the <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Sep%202016?OpenDocument">ABS</a> (Table 1, Participation rate – seasonally adjusted), that the participation rate did indeed fall from 64.9% in July 2016, to 64.7% in August 2016 and then to 64.5% in September.</p>
</blockquote>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/142834/original/image-20161024-15926-zr68bc.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/142834/original/image-20161024-15926-zr68bc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/142834/original/image-20161024-15926-zr68bc.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=295&fit=crop&dpr=1 600w, https://images.theconversation.com/files/142834/original/image-20161024-15926-zr68bc.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=295&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/142834/original/image-20161024-15926-zr68bc.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=295&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/142834/original/image-20161024-15926-zr68bc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=371&fit=crop&dpr=1 754w, https://images.theconversation.com/files/142834/original/image-20161024-15926-zr68bc.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=371&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/142834/original/image-20161024-15926-zr68bc.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=371&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Table 1, Participation rate – seasonally adjusted.</span>
<span class="attribution"><a class="source" href="http://www.abs.gov.au/ausstats/meisubs.NSF/log?openagent&6202001.xls&6202.0&Time%20Series%20Spreadsheet&18ABCC96A2AC372ACA25805100106C11&0&Sep%202016&20.10.2016&Latest">Australian Bureau of Statistics</a></span>
</figcaption>
</figure>
<p>You can read the spokesman’s full response <a href="http://theconversation.com/full-response-from-a-spokesman-for-brendan-oconnor-67553">here</a>. </p>
<h2>Did the labour force participation rate fall by 0.2% (points) in the last two periods?</h2>
<p>That depends on whether you’re using the trend data or the seasonally adjusted data. Trend estimates smooth out volatility in the seasonally adjusted estimates and are preferred by the ABS and many economists and statisticians. </p>
<p>O’Connor instead uses the monthly seasonally adjusted values. These figures do show a decrease by 0.2 points in each of the last two periods - July to August and August to September. But seasonally adjusted values are more volatile than trend estimates – as shown by the figure below. </p>
<p><strong>Labour force participation rate – trend and seasonally adjusted, 2006-2016</strong></p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/142860/original/image-20161024-26489-74a4f7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/142860/original/image-20161024-26489-74a4f7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=349&fit=crop&dpr=1 600w, https://images.theconversation.com/files/142860/original/image-20161024-26489-74a4f7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=349&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/142860/original/image-20161024-26489-74a4f7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=349&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/142860/original/image-20161024-26489-74a4f7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=439&fit=crop&dpr=1 754w, https://images.theconversation.com/files/142860/original/image-20161024-26489-74a4f7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=439&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/142860/original/image-20161024-26489-74a4f7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=439&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Author’s calculations from ABS Cat No.6202.0 - Labour Force, Australia, September 2016.</span>
<span class="attribution"><span class="source">Author provided</span></span>
</figcaption>
</figure>
<p>According to the <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0">latest ABS trend data</a> the labour force participation rate fell by less than 0.1 points, but remained unchanged compared to the previous period when rounding out the numbers. </p>
<p>So O'Connor correctly quoted the seasonally adjusted data - but a better indicator to use is trend data, which reveals the labour force participation rate remained broadly unchanged compared to the previous period.</p>
<h2>Is the labour force participation rate in ‘free fall’?</h2>
<p>The overall labour force participation rate has been decreasing since around 2010 but this is not necessarily a sign that the job market is tanking. </p>
<p>The labour force participation rate is influenced by two main factors:</p>
<ul>
<li>the behaviour of people and their willingness, ability or necessity to be in the labour force, and</li>
<li>the composition of the civilian population. </li>
</ul>
<p>We know two things that are having an impact here. The economy is not doing as well as it was during the mining boom, and Australia’s population is ageing.</p>
<p>Taking a longer term view, let’s look at the impact the ageing population is having on the overall labour force participation rate.</p>
<p>The overall labour force participation rate is made up of the participation rates of different working age groups.</p>
<p>Since the early 1980s the participation rate of the oldest group – people aged 55+ – has been increasing. But the youth labour participation rate has been dropping off as more young people stay on at school. </p>
<p>The participation rate of the prime working age groups (24-54 years) has been gradually increasing and converging.</p>
<p><strong>Labour force participation rate – Age groups, 1981 - 2016</strong></p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/142863/original/image-20161024-26467-hgdc2z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/142863/original/image-20161024-26467-hgdc2z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=322&fit=crop&dpr=1 600w, https://images.theconversation.com/files/142863/original/image-20161024-26467-hgdc2z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=322&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/142863/original/image-20161024-26467-hgdc2z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=322&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/142863/original/image-20161024-26467-hgdc2z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=405&fit=crop&dpr=1 754w, https://images.theconversation.com/files/142863/original/image-20161024-26467-hgdc2z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=405&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/142863/original/image-20161024-26467-hgdc2z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=405&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Author’s calculations from ABS Cat No.6291.0.55.001 - Labour Force, Australia, Detailed - Electronic Delivery, Aug 2016 and ABS Cat No.3101.0 Australian Demographic Statistics – Derived from ABS.Stat.</span>
<span class="attribution"><span class="source">Author provided</span></span>
</figcaption>
</figure>
<p>At the same time, the population has also been changing. Older age groups now take up a much larger share of the population than ever before. The 55+ age group now accounts for around one-third of the adult population, whereas 35 years ago it constituted one-quarter.</p>
<p><strong>Population Composition – 1981 and 2016</strong></p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/142864/original/image-20161024-26481-1bcj8p8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/142864/original/image-20161024-26481-1bcj8p8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=361&fit=crop&dpr=1 600w, https://images.theconversation.com/files/142864/original/image-20161024-26481-1bcj8p8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=361&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/142864/original/image-20161024-26481-1bcj8p8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=361&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/142864/original/image-20161024-26481-1bcj8p8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=453&fit=crop&dpr=1 754w, https://images.theconversation.com/files/142864/original/image-20161024-26481-1bcj8p8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=453&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/142864/original/image-20161024-26481-1bcj8p8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=453&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Author’s calculations from ABS Cat No.3101.0 Australian Demographic Statistics – Derived from ABS.Stat.</span>
<span class="attribution"><span class="source">Author provided</span></span>
</figcaption>
</figure>
<p>Here’s where it gets slightly complicated. </p>
<p>We know the 55+ age group now makes up a much greater share of the labour force and overall population than before. And we know this group has a lower participation rate than other age groups - which is pulling down the overall rate. </p>
<p>But within that context, the 55+ age group’s labour participation rate is gradually rising. It is, in fact, entirely possible for the overall participation rate to fall even if the participation rate of all age groups were simultaneously rising.</p>
<p>The chart below shows that between 2010 and 2016, the labour force participation rate decreased by 0.4 of a percentage point. But most of the decline (67%) was due to demographic shifts in the Australian population. </p>
<p><strong>Contribution of changes in labour force participation rate – behaviour and population drivers</strong></p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/142865/original/image-20161024-26504-18spnxa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/142865/original/image-20161024-26504-18spnxa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=359&fit=crop&dpr=1 600w, https://images.theconversation.com/files/142865/original/image-20161024-26504-18spnxa.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=359&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/142865/original/image-20161024-26504-18spnxa.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=359&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/142865/original/image-20161024-26504-18spnxa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=451&fit=crop&dpr=1 754w, https://images.theconversation.com/files/142865/original/image-20161024-26504-18spnxa.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=451&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/142865/original/image-20161024-26504-18spnxa.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=451&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Authors calculations from ABS Cat No.6291.0.55.001 - Labour Force, Australia, Detailed - Electronic Delivery, Aug 2016 and ABS Cat No.3101.0 Australian Demographic Statistics – Derived from ABS.Stat</span></span>
</figcaption>
</figure>
<p>The point here is that the labour force participation rate is not the useful tool it once was. It’s not as simple as Brendan O'Connor’s quote first suggests.</p>
<p>And it’s getting harder to use this metric to determine the strength of the economy and provide insights into labour supply and demand. </p>
<h2>Have people ‘stopped looking for work’?</h2>
<p>This is a tough one to answer. The data and indicators we currently use to assess this either aren’t good enough or as current as we need them to be.</p>
<p>The decrease in labour force participation rates between 2010 and 2016 were much more likely to be driven by the ageing population than people stopping looking for work. But this does play a small part. </p>
<p>And according to the latest ABS’ <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6226.0February%202015?OpenDocument">data</a> on “discouraged workers” there are fewer people discouraged from looking for work than in the previous period. </p>
<p>Discouraged workers are classified as those who wanted to and were available to work, but were not actively looking for work. These people believed they would not be able to find a job for reasons such as being considered too old or young, or there not being any jobs in the local area. </p>
<p>The ABS collects information about discouraged workers annually. However, the latest available data is dated February 2015 - more than 18 months old. </p>
<p>These data <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6226.0February%202015?OpenDocument">show</a> that there were around 106,000 discouraged workers. This represented a decrease in both absolute and relative terms compared to the previous year. Data for February 2016 is slated for release in November 2016. </p>
<h2>Verdict</h2>
<p>Brendan O'Connor’s assertions that the labour force participation rate is in “free fall” and that this indicates “people have stopped looking for work” were exaggerated.</p>
<p>While O'Connor accurately quoted the seasonally adjusted data, this volatile data set is not the most reliable indicator. A better indicator would be the trend data, which reveal the labour force participation rate remained broadly unchanged compared to the previous period.</p>
<p>In recent times, demographic changes have been the biggest influence in dragging the overall labour force participation rate down. The ageing population is skewing the labour force participation rate as an indicator of the health of the labour market.</p>
<p>A combination of indicators should be used to assess the strength of the labour market - more frequent data and a re-assessment of leading labour market indicators will help this along. <strong>– Rebecca Cassells</strong></p>
<h2>Review</h2>
<p>This is a sound FactCheck and points out how a simple number, such as the participation rate, is the result of complex factors. Simplifying it down to a phrase like “people have stopped looking for work” is misleading.</p>
<p>Labour market statistics, including the participation rate, are only estimates, not the actual numbers in the population. They are based on the Labour Force Survey, which is a sample of about 0.33% of the civilian population aged 15 years and over. Because they are based on a sample of the population, the statistics have errors. </p>
<p>Brendan O’Connor’s comments regarding the recent estimates of the participation rate referred to a rate of 64.5% - a fall of 0.2 percentage points from 64.7% in the previous month (with consequent alarm about people giving up looking for work).</p>
<p>However, the ABS report on the Labour Force Survey clearly <a href="http://www.ausstats.abs.gov.au/ausstats/meisubs.nsf/0/A0014D36BE680136CA25805100106AA3/$File/62020_sep%202016.pdf">says</a> that the estimate of the monthly change in the participation rate rate has a “95% confidence interval” of -0.6 to +0.2. In other words, we can be 95% certain that the participation rate was somewhere between 64.1% (a dramatic drop) and 64.9% (a strong increase).</p>
<p>The FactCheck author points out clearly the dangers of basing conclusions about the labour market on month-to-month variations. <strong>– Phil Lewis</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/67457/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rebecca Cassells is Principal Research Fellow at the Bankwest Curtin Economics Centre. The Bankwest Curtin Economics Centre is an independent economic and social research organisation located within Curtin Business School at Curtin University. The Centre was established in 2012 with support from Bankwest (a division of Commonwealth Bank of Australia) and Curtin University. The views in this article are those of the authors and do not represent the views of Curtin University and/or Bankwest or any of their affiliates.</span></em></p><p class="fine-print"><em><span>Phil Lewis does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article. He also has no relevant affiliations. During his career he has received funding from many private and public sector organisations including most recently the ARC, NCVER, DEEWR, AIB and ACCI.</span></em></p>
Shadow minister for employment Brendan O'Connor said the labour force participation rate was in “free fall” and that this showed “people have stopped looking for work”. Is that true?
Rebecca Cassells, Associate Professor, Bankwest Curtin Economics Centre, Curtin University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/66552
2016-10-27T02:59:18Z
2016-10-27T02:59:18Z
FactCheck: is wage growth at record lows?
<blockquote>
<p>People are hurting, people are doing it tough. Wages growth at record lows. – Shadow treasurer Chris Bowen, <a href="http://www.abc.net.au/insiders/content/2016/s4553252.htm">interview</a>, October 9, 2016.</p>
</blockquote>
<p>In October 2016, the Australian economy hit a new milestone – <a href="http://www.businessinsider.com.au/chart-of-the-day-its-been-25-years-since-australia-was-in-recession-2016-9">25 years</a> of uninterrupted economic growth. At the same time, shadow treasurer Chris Bowen said Australian wage growth had fallen to record lows. </p>
<p>Is that right?</p>
<h2>Checking the source</h2>
<p>When asked for a source to support his statement, a spokesperson for Chris Bowen pointed The Conversation to the Australian Bureau of Statistics (ABS) <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6345.0Jun%202016?OpenDocument">Wage Price Index for June 2016</a>. (You can read the full response from Bowen’s office <a href="http://theconversation.com/full-response-from-chris-bowen-67144">here</a>.)</p>
<p>The ABS <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6345.0Explanatory%20Notes1Jun%202016?OpenDocument">Wage Price Index</a> tracks hourly rates of pay, excluding bonuses, for all private and public industries in Australia. The chart below illustrates the ABS data referred to by Chris Bowen’s office.</p>
<iframe src="https://datawrapper.dwcdn.net/CXveR/6/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="456"></iframe>
<h2>Is wage growth at record lows?</h2>
<p>Wage growth is certainly low, and people are doing it tough, but to label the current situation a “record low” is a step too far. </p>
<p>Bowen is correct according to the data set he provided to support his statement (the ABS’ wage price index). But I don’t think it’s the most suitable data on which to base this claim. The first problem with it is that it only goes back to 1998. That’s a fairly small window of time on which to base a claim about “record lows”.</p>
<p>The second problem is that, according the <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6345.0Explanatory%20Notes1Jun%202016?OpenDocument">ABS Glossary</a>, </p>
<blockquote>
<p>changes in the price of wages and salaries resulting from changes in the composition of the labour market are also excluded from index movements. </p>
</blockquote>
<p>In other words, the wage price index accounts for changes in the wages of many types of jobs, but not the changes in the wages taken home by individual people. </p>
<p>If people upskill, enabling them to move from a lower paid job to a higher paid job, it won’t make any difference to the wage price index. Yet this sort of wage growth is fundamental in Australian society.</p>
<p>In an attempt to verify whether wage growth really is at “record lows”, I looked instead at data on <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/5206.0?opendocument&ref=HPKI">“Compensation of employees”</a>; that is, the aggregate wage bill for the whole economy. </p>
<p>Adjusted for hours worked and CPI growth, this confirms that wages are indeed currently falling. It also reveals that there have been at least two other periods when annual real wage growth dipped lower than it is now – the wage reforms era of the 1980s and the mid 1990s, as this chart shows:</p>
<iframe id="datawrapper-chart-kf1DY" src="https://datawrapper.dwcdn.net/kf1DY/4/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="598"></iframe>
<p>The 1980s was a period of major reform, with wage demands significantly reduced in exchange for an improved social safety net over a series of <a href="https://theconversation.com/the-lessons-of-the-accord-for-modern-times-think-outside-the-box-14985">Accords</a>. The decline in wages over that period is not comparable to today’s decline, which has taken place without significant government intervention. I think it’s fair to exclude this period when establishing whether the current situation constitutes a “record”. </p>
<p>As for the 1990s dip? In the aftermath of the early 1990s recession, <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6202.0Main+Features1Aug%202016?OpenDocument">unemployment</a> was stuck above 10% from October 1991 until April 1994. </p>
<p>Wage growth eventually fell away, allowing unemployment to fall to about 8.5% (still high by today’s standards) by mid-1995. For a short time, wage growth was lower then than it is now. Compared against this period, Bowen’s assertion that “wages growth at record lows” is inaccurate. </p>
<p>It is true, though, that wage growth is now at a 20-year low.</p>
<h2>Why have wages stopped growing?</h2>
<p>Since recovering from the unemployment hangover of our last recession 25 years ago, positive wage growth has been the norm. Australia has seen average annual wage growth of 1.7% over the last 20 years, reaching a high of nearly 5% during the mining boom. Thanks to the mining boom and the strength of the Australian dollar, wage growth was particularly strong between 2004 and 2012, broken only briefly in 2009 by the global financial crisis. </p>
<p>With wages falling since 2013, workers are now doing it tough. However, it could have been worse. Unemployment is hovering at around 6%, <a href="https://data.oecd.org/unemp/unemployment-rate.htm">middle-of-the-range</a> by international standards. Moderate wage expectations have been an important factor in this relatively smooth <a href="https://theconversation.com/turnbull-inherits-an-economy-battered-by-global-headwinds-47473">adjustment to the biggest fall in the terms of trade</a> in over half a century. And on the upside, wage growth is heading in a positive direction, indicating that recovery may be beckoning.</p>
<h2>Verdict</h2>
<p>Chris Bowen’s claim that “wages growth at record lows” is somewhat overcooked. </p>
<p>Wage growth is now at a 20-year low. So it’s not unreasonable to say “people are hurting, people are doing it tough”. </p>
<p>But is it “record” low growth? No: there have been two other recent periods – in the 1980s and the 1990s – when annual growth in real wages dipped lower than it is now. (Though I’d argue we can disregard the 1980s, for reasons explained above.) <strong>– Janine Dixon</strong></p>
<hr>
<h2>Review</h2>
<p>I think this FactCheck is done really nicely. It is correct to argue that looking at the data source sent by Bowen’s office is a limited way to judge his statement, and the FactCheck then does a good job of looking at the alternative data source. </p>
<p>So in the substance of its analysis, I would give it full marks.</p>
<p>The only point I would take issue with is whether the analysis of wage growth contradicts Bowen’s statement. Bowen said “at record lows” – he didn’t say “lowest ever”. Perhaps this is just my interpretation, but I take “at record lows” to mean being comparable to the lowest levels observed. </p>
<p>Hence I’d be slightly less tough on Bowen than this author has been. Given the data reported in the FactCheck, I would say that his statement is reasonable. <strong>– Jeff Borland.</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/66552/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jeff Borland receives ARC grants to work on research on the Australian labour market.</span></em></p><p class="fine-print"><em><span>Janine Dixon does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Shadow treasurer Chris Bowen said Australian wages growth is at record lows. Is that true?
Janine Dixon, Economist at Centre of Policy Studies, Victoria University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/60070
2016-05-27T10:38:14Z
2016-05-27T10:38:14Z
Latest migration figures make no economic case for Brexit
<p>There is an increasing focus on migration in the build up to the EU referendum. It is arguably the key issue which Leave advocates feel confident <a href="https://next.ft.com/content/217da52e-232d-11e6-9d4d-c11776a5124d">of having majority support on</a>. And headlines that proclaim migration to be nearing a <a href="http://www.reuters.com/article/us-britain-eu-immigration-idUSKCN0YH0SS">“record high”</a> fuel the Brexit campaign’s calls to quit the EU and end the commitment to free movement of labour.</p>
<p>As the last release of migration statistics before the referendum, the <a href="http://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/migrationstatisticsquarterlyreport/may2016">latest quarterly figures</a> from the UK’s Office for National Statistics assume heightened significance. While they largely confirm what we already know, it is worth looking at some of the detail.</p>
<p>Estimated <a href="http://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/migrationstatisticsquarterlyreport/may2016#net-migration-to-the-uk">net migration</a> remains historically high. The latest figures show a slight rise, although not by a statistically significant amount. The figures released are not a comprehensive count of everyone who has come and gone, but an estimate <a href="http://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/migrationstatisticsquarterlyreport/february2016#accuracy-of-migration-estimates">based principally on a sample survey</a> conducted at points of entry and exit. </p>
<p>They are therefore subject to sampling variation and the magnitude of the recorded change is within the range statistically compatible with no actual change from the previous quarter. There is nothing new therefore to get excited about in the headline figure.</p>
<p>The long-term annual net migration figure of 333,000 is the difference between a gross inflow of 630,000 people and an outflow of 297,000 people. So people are arriving at roughly twice the rate at which they are leaving. What change the figures do record is a consequence of a <a href="http://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/migrationstatisticsquarterlyreport/february2016#emigration-from-the-uk">fall in emigration</a> (though still statistically insignificant) rather than of a rise in immigration. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/124202/original/image-20160526-22068-v0hg87.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/124202/original/image-20160526-22068-v0hg87.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/124202/original/image-20160526-22068-v0hg87.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=588&fit=crop&dpr=1 600w, https://images.theconversation.com/files/124202/original/image-20160526-22068-v0hg87.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=588&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/124202/original/image-20160526-22068-v0hg87.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=588&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/124202/original/image-20160526-22068-v0hg87.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=739&fit=crop&dpr=1 754w, https://images.theconversation.com/files/124202/original/image-20160526-22068-v0hg87.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=739&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/124202/original/image-20160526-22068-v0hg87.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=739&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Long-term international migration, UK, 1970 to 2014.</span>
<span class="attribution"><a class="source" href="http://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/migrationstatisticsquarterlyreport/may2016">Office for National Statistics</a></span>
</figcaption>
</figure>
<p>This illustrates a point that rises in net migration can be as easily a result of fewer individuals leaving as of more coming. Is insufficient emigration what worries those upset by migration numbers? It seems unlikely. </p>
<h2>A closer look at the numbers</h2>
<p>The Brexit debate is focused more on migration from within the EU than immigration from outside and the ONS figures are also <a href="http://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/migrationstatisticsquarterlyreport/february2016#immigration-to-the-uk">illuminating on this</a>. Net inflows of EU citizens (other than the UK) and non-EU citizens are very similar: 184,000 and 188,000 respectively. So are the gross inflows, 270,000 and 277,000. Whether measured net or gross, EU immigration therefore accounts for about half of the total. </p>
<p>The statistics show that work is the most common reason for immigration, accounting for 308,000 arrivals, 58% of whom had a definite job to go to and the rest arriving with the intention of looking for work. Many more of these were EU citizens (61%) than were from outside the EU (24%). The number is currently rising.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/124201/original/image-20160526-22050-10n5mmz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/124201/original/image-20160526-22050-10n5mmz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/124201/original/image-20160526-22050-10n5mmz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/124201/original/image-20160526-22050-10n5mmz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/124201/original/image-20160526-22050-10n5mmz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/124201/original/image-20160526-22050-10n5mmz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/124201/original/image-20160526-22050-10n5mmz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/124201/original/image-20160526-22050-10n5mmz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Net long-term international migration by citizenship, UK, 1975 to 2015.</span>
<span class="attribution"><a class="source" href="http://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/migrationstatisticsquarterlyreport/may2016">Office for National Statistics</a></span>
</figcaption>
</figure>
<p>By contrast, the numbers arriving for study fell from 191,000 to 167,000 and these were mainly from outside the EU (72%) rather than from inside (23%). The number of those coming to accompany or join others, for example for marriage or family reunion, were smaller than either labour or student migration at 73,000. </p>
<p>The number of asylum applications, despite its prominence in much discussion, was lower than any of these, although rising – about 42,000 in the year to March 2016, with about 12,000 applications granted over the same period.</p>
<h2>An ill-judged aim</h2>
<p>The headline figure of more than 300,000 net migration is a continuing embarrassment to the government because of its aspiration to <a href="http://www.bbc.co.uk/news/uk-politics-32816454">keep this below 100,000</a>. Obviously, they are nowhere near to achieving that, but to many there is something seriously ill-judged in the aim itself. </p>
<p>A net immigration target is a target for the difference between two large numbers – immigration and emigration – only one of which the government has any ability to control. Furthermore, its influence even over immigration is diminished by the EU commitment to free movement of labour, particularly when half of the gross inflow is EU citizens, largely coming to the UK to work. </p>
<p>Efforts to reduce immigration are therefore drawn towards the relatively controllable categories such as <a href="https://www.gov.uk/government/news/major-changes-to-student-visa-system">student migration</a>, <a href="https://www.gov.uk/government/collections/family-and-private-life-rule-changes-9-july-2012">family migration</a> or <a href="https://next.ft.com/content/3648ca34-fa1f-11e4-a41c-00144feab7de">high-skilled immigration</a> from outside the EU – even though these are not the sorts of immigration that are <a href="http://www.britishfuture.org/articles/news/skills-trump-culture-in-migration-attitudes-bsa-shows/">most unpopular</a>.</p>
<h2>Bad economics</h2>
<p>A case is therefore made for Brexit because it could liberate the UK from having to honour the free movement of European labour. At least two arguments suggest this might be a bad idea.</p>
<p>First, the <a href="https://www.opendemocracy.net/brexitdivisions/ian-preston/confident-uk-has-nothing-to-fear-from-free-movement-of-labour">economic advantages</a> of participating in <a href="http://www.niesr.ac.uk/blog/labour-mobility-european-union-brief-history#.V0b0wfkrKUl">free movement of labour</a> would be lost. There are good reasons to think that free movement is <a href="http://cep.lse.ac.uk/pubs/download/brexit05.pdf">good for productivity</a>, allowing firms to recruit widely for skills. It’s also <a href="http://voxeu.org/article/immigration-and-public-finances">good for public finances</a>, bringing in young migrants keen to work whose contributions in taxes outweigh any costs imposed on the public exchequer. And it’s <a href="http://www.cream-migration.org/files/Migration-FactSheet.pdf#page=7">good for economic dynamism</a>, allowing fresh ideas to spread and be adopted. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/124203/original/image-20160526-22073-6oz8lz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/124203/original/image-20160526-22073-6oz8lz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/124203/original/image-20160526-22073-6oz8lz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=560&fit=crop&dpr=1 600w, https://images.theconversation.com/files/124203/original/image-20160526-22073-6oz8lz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=560&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/124203/original/image-20160526-22073-6oz8lz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=560&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/124203/original/image-20160526-22073-6oz8lz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=704&fit=crop&dpr=1 754w, https://images.theconversation.com/files/124203/original/image-20160526-22073-6oz8lz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=704&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/124203/original/image-20160526-22073-6oz8lz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=704&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Long-Term International Migration estimates of immigration to the UK, by main reason for migration, 2006 to 2015.</span>
<span class="attribution"><a class="source" href="http://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/migrationstatisticsquarterlyreport/may2016">Office for National Statistics</a></span>
</figcaption>
</figure>
<p>Evidently there are costs in adjusting to high flows of people, but concerns that immigration is damaging either to <a href="http://www.cream-migration.org/files/Migration-FactSheet.pdf#page=10">labour market prospects of British-born workers</a> or to <a href="http://voxeu.org/article/fiscal-effects-immigration-uk">public finances</a> are not <a href="https://theconversation.com/fact-check-is-there-zero-economic-benefit-from-high-immigration-48704">borne out by evidence</a>.</p>
<p>But second, the <a href="http://ner.sagepub.com/content/236/1/14.full.pdf+html">only plausible way to restrict freedom of movement after Brexit</a> would be to choose <a href="http://cep.lse.ac.uk/pubs/download/brexit02.pdf">the most economically damaging</a> of the options for post-Brexit trading agreements and access to the single market. </p>
<p>The weight of evidence has been <a href="https://longandvariable.wordpress.com/2016/05/23/280-economists-now-against-brexit-as-ucl-and-lse-sign/">gaining increasing acceptance</a> among <a href="http://www.telegraph.co.uk/business/2016/05/22/these-economists-are-a-fractious-group-but-they-all-want-to-stay/">economists</a> that the economic losses from Brexit would depend critically on trade arrangements negotiated in the aftermath. </p>
<p>While <a href="https://theconversation.com/which-brexit-forecast-should-you-trust-the-most-an-economist-explains-59992">the most plausible estimates</a> suggest that the range of options go from bad to very bad, the worst options in terms of <a href="http://ner.sagepub.com/content/236/1/2.full.pdf">long-term permanent losses in national income</a> and <a href="http://www.ifs.org.uk/publications/8296">harm to public finances</a> are the only ones compatible with long-term restrictions on free movement. Alarmingly high costs would therefore be incurred for no compelling economic advantage.</p>
<p>The economic case is therefore clear – immigration has not been bad for the UK. But even voters who think it has should be wary of believing that Brexit would allow Britain to withdraw from freedom of movement without other high economic costs.</p><img src="https://counter.theconversation.com/content/60070/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ian Preston has been part of teams receiving funding from the Home Office, Migration Advisory Committee and Low Pay Commission for past research on migration.</span></em></p>
The latest figures show a slight rise in migration to the UK, but there is nothing new to get excited about.
Ian Preston, Professor in the Department of Economics, UCL
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/54809
2016-02-28T19:00:52Z
2016-02-28T19:00:52Z
Jobs don’t need to be lousy
<figure><img src="https://images.theconversation.com/files/112041/original/image-20160218-1233-16vign3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Data from a recent OECD report suggests that to increase the number of jobs, the quality of jobs doesn't need to drop.</span> <span class="attribution"><span class="source">From www.shutterstock.com</span></span></figcaption></figure><p>Do people have to put up with poor quality jobs because that’s the only way to get enough jobs? Are the quality and quantity of jobs at odds with each other? </p>
<p>There have been variations on this idea for a while. They say it’s better for people to have a bad job than no job at all. People should be grateful for what they’ve got, at least it’s a job. Or that casual job – it’s a stepping stone to a secure future. </p>
<p>However, the Organisation for Economic Cooperation and Development’s (OECD) recent <a href="http://www.oecd.org/employment/labour-stats/Job-quality-OECD.pdf">report on Job Quality</a> suggests that the quality of jobs doesn’t need to be low for there to be plenty of jobs.</p>
<p>For the OECD, job quality is defined by three things. The first is “earnings quality” – how well do jobs pay. That means not just the average level of earnings, but also its distribution. </p>
<p>The second component is “labour market security”. That covers thing like how likely you are to lose your job, and how much you suffer if you do lose it (how long does unemployment last, how high or low are benefits). </p>
<iframe src="https://datawrapper.dwcdn.net/0K8aW/1/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="400"></iframe>
<p>The third is “quality of the working environment”. This is the nature and content of the work performed, time arrangements and workplace relationships, though measured measured by survey questions on ‘job demands’ and ‘job resources’. </p>
<p>So, are the quality and quantity of jobs at odds with each other? </p>
<p>The OECD tested whether the employment rate (people in work as a percentage of the working age population) was related to various measures of job quality.</p>
<p>It found that job quality and the number of jobs can, and tend to, go together. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/112221/original/image-20160220-25885-bkrqzc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/112221/original/image-20160220-25885-bkrqzc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/112221/original/image-20160220-25885-bkrqzc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=227&fit=crop&dpr=1 600w, https://images.theconversation.com/files/112221/original/image-20160220-25885-bkrqzc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=227&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/112221/original/image-20160220-25885-bkrqzc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=227&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/112221/original/image-20160220-25885-bkrqzc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=285&fit=crop&dpr=1 754w, https://images.theconversation.com/files/112221/original/image-20160220-25885-bkrqzc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=285&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/112221/original/image-20160220-25885-bkrqzc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=285&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The relations between job quality and employment rates.</span>
<span class="attribution"><span class="source">OECD: http://www.oecd.org/employment/labour-stats/Job-quality-OECD.pdf</span></span>
</figcaption>
</figure>
<p>For example, when labour market security rose, so did the employment rate. That’s not surprising in one sense, and it was the strongest relationship between job quality and quantity. </p>
<p>But there were other links as well. Improvements in earnings quality also tended to link to improvements in the employment rate. And as the quality of the work environment got better, so too did the employment rate. </p>
<p>Just because these pairs of factors go together does not necessarily mean the first causes the second - it could potentially work both ways – but, as the OECD says, there appear to be “no major trade-offs…but rather, potential synergies”. </p>
<p>In the short term, the report says, things are more complex: the global financial crisis had different effects in different countries. Some had falls in both job numbers and job quality. Others had falls in the first but not the second, perhaps because “the surviving jobs were of better quality in the first place”. </p>
<p>The OECD report also looked at “emerging countries” (fast-growing ones, outside the OECD), like Russia, Brazil, Turkey and China. Job quality is lower in those countries on a number of dimensions: lower wages, higher inequality, greater risk of low-wage employment, and a poorer work environment. </p>
<p>“Informal” (unregulated) jobs in particular are highly insecure, poorly paid and involve long hours. But “informality”, it says, is “hard to escape”. </p>
<p>It’s a sombre reminder that, not only in emerging economies but also in countries like Australia, lousy jobs are not necessarily a stepping stone for better jobs later in people’s careers.</p>
<p>Indeed, across the OECD, even when you account for the “stepping stones”, there’s a lot of inequality in pay. Measuring inequality at a single point in time will produce a higher number than looking at lifetime earnings, because people’s earnings on average increase as they get older. However, inequality is not just a transient feature within a life time: the report says “about three quarters of earnings inequality at a point in time is permanent”.</p>
<p>Job quality is a complex concept, difficult to measure. <a href="http://digitalcommons.ilr.cornell.edu/ilrreview/vol66/iss4/2/">Other researchers</a> define it <a href="https://www.elgaronline.com/view/nlm-book/9781783475452/C183.xml">differently</a>. The report tries to take account of wage inequality but this can’t account for inequality between the overall incomes of the ultra-rich and of lower wage employees, or of those on pensions. The OECD has focused on some measures for which it could easily collect data from a large number of countries. </p>
<p>The report highlights there is a lot more to success in employment policy than just counting up the number of jobs. Policy makers like to focus on that because it’s easy. However, they need to think more broadly about jobs, and recognise that it’s not necessary to have poor quality jobs in order to have enough jobs.</p><img src="https://counter.theconversation.com/content/54809/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>As a university employee, David Peetz has undertaken research over many years with occasional financial support from the Australian Research Council, governments and government agencies from both sides of politics in Australia and overseas, employers and unions for specific projects. Those funded projects do not concern the subject matter of this article.</span></em></p>
There doesn’t need to be sub-standard jobs in order for there to be enough jobs to go around.
David Peetz, Professor of Employment Relations, Griffith University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/55452
2016-02-26T11:47:34Z
2016-02-26T11:47:34Z
Too many economic cooks add to South Africa’s policy uncertainty
<figure><img src="https://images.theconversation.com/files/113048/original/image-20160226-26716-1ai0zjy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Fixing South Africa's perilous education system will involve building consensus – a time-consuming process.</span> <span class="attribution"><span class="source">Reuters/Rogan Ward</span></span></figcaption></figure><p><em>The <a href="http://www.treasury.gov.za/documents/national%20budget/2016/default.aspx">budget for 2016</a> announced by South Africa’s Finance Minister Pravin Gordhan has failed to settle the markets or dispel uncertainty about the country’s economic future. Jabulani Sikhakhane, deputy editor of The Conversation Africa, asked Krige Siebrits to explain why.</em></p>
<p><strong>Are the measures announced by the finance adequate to deal with South Africa’s most pressing economic problems, such as removing stumbling blocks to greater investment by the private sector and higher levels of job creation?</strong></p>
<p><em>Krige Siebrits</em>: No. But the expectations created in the run-up to the budget might not have been realistic. </p>
<p>The budget represents an impressive plan for accelerating the process of fiscal consolidation and for allaying concerns about fiscal sustainability. As is usually the case, it also outlines many other aspects of the government’s economic policy agenda. These include various initiatives and measures aimed at boosting investment and creating jobs. </p>
<p>In addition, the need for closer co-operation with business, labour and civil society on economic policy issues is a recurrent theme in the budget. But Gordhan did not announce the kind of game-changers many had hoped for. The question should be asked, though: which feasible game-changers were at his disposal in the current economic and political environment?</p>
<p><strong>What is missing from the package?</strong></p>
<p><em>Krige Siebrits</em>: The factors that hamper investment, job creation and economic growth in South Africa are well known. It is widely agreed, for example, that the <a href="http://www.gov.za/issues/national-development-plan-2030">National Development Plan</a> represents a fine diagnosis of South Africa’s economic ills. </p>
<p>Critical problems, such as the perilous state of the education system and the poor functioning of labour markets, are structural. Calls for radical reform ignore the reality that solving these problems involves the building of consensus. This will be time consuming and will involve institutional change and cooperation among government agencies and other parties. </p>
<p>Yet even if one allows for the complexity of these problems, it is unacceptable that so little progress has been made since 1994. Government should put more effort into developing concrete strategies for dealing with the factors preventing the removal of the critical constraints on economic growth.</p>
<p><strong>Has South Africa done enough to avoid a downgrade?</strong></p>
<p><em>Krige Siebrits</em>: Gordhan presented a sound plan for reducing the budget deficit and stabilising the public debt ratio. But the fiscal situation is only one of several factors taken into account by the ratings agencies. </p>
<p>The budget has not fundamentally improved the economy’s growth prospects. To the extent that growth and structural reforms aimed at raising the growth potential of the economy are decisive concerns for the ratings agencies, the risk of a downgrade seems undiminished.</p>
<p>But it would be unfair to criticise Gordhan for not doing more. The responsibility for economic policy is divided among several ministers. The complex structure of the ministerial cluster responsible for economic issues is one of the factors that contribute to uncertainty about economic policy. </p>
<p>A more concerted effort is needed from all economic policymakers to avert the threat of a downgrade.</p>
<p><strong>Budgeting is always about balancing competing demands on limited resources. The most pressing demands in South Africa can broadly be grouped into higher economic growth and equity, including redress for the effects of apartheid on the majority. How well did Gordhan strike such a balance? If not, in which direction – growth or equity – is the budget tilted?</strong></p>
<p><em>Krige Siebrits</em>: Economists increasingly emphasise the complementarities between the objectives of growth and equity. Growth creates resources to fund redistributive programs. Well-chosen redistributive programs promote growth by contributing to social stability and by enabling more people to participate in economic activity.</p>
<p>One of the most important achievements since 1994 has been to maintain fiscal discipline, which is a prerequisite for sustainable economic growth. This discipline was maintained while effecting large-scale redistribution through the budget. </p>
<p><a href="http://documents.worldbank.org/curated/en/2014/11/20339043/south-africa-economic-update-fiscal-policy-redistribution-unequal-society">Recent studies</a> find that fiscal policy has a larger redistributive effect in South Africa than in a sample of other middle-income countries. These included Brazil, Chile, Colombia, Indonesia, Mexico and Peru. </p>
<p>The 2016 budget continues this balanced approach to growth and equity. It is particularly heartening that the intention is to reduce the budget deficit without compromising the social wage or public infrastructure investment.</p>
<p><strong>Since 1994 South Africa has announced numerous new policies to increase growth and improve government’s performance. It’s always fallen short on implementation. Does this budget signal any step change? Is there anything that shows a greater sense of urgency?</strong></p>
<p><em>Krige Siebrits</em>: There has been a sense of urgency in the government’s pronouncements on economic policy matters so far this year. The budget maintained this momentum. Gordhan’s speech and the budget documents released by National Treasury contain many references to the importance of implementation and to new initiatives to improve it. </p>
<p>This focus, however, is not new. So one is left wondering whether the 2016/17 financial year will bring more progress than previous years. This is particularly important on matters such as the governance of state-owned enterprises, service delivery in many municipalities, retirement reform and clarification of the financial implications of national health insurance. </p>
<p>In these and other areas, a step change in government’s approach to implementation would require more concreteness. This could be in the form of commitments to specific outcomes and clear progress reports in subsequent budgets.</p><img src="https://counter.theconversation.com/content/55452/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Krige Siebrits does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
South Africa’s government should put more effort into developing concrete strategies for dealing with the factors preventing the removal of the critical constraints on economic growth.
Krige Siebrits, Senior Lecturer in Economics, Stellenbosch University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/53570
2016-01-28T15:07:06Z
2016-01-28T15:07:06Z
Four key economic trends shaping society
<figure><img src="https://images.theconversation.com/files/109499/original/image-20160128-3061-hg5x0y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">from www.shutterstock.com</span></span></figcaption></figure><p>The year is off to a turbulent start; both in the UK, and around the world. January saw oil prices plummeting, while Chinese growth slowed, spooking investors (but <a href="https://theconversation.com/explainer-whats-going-on-with-chinas-economy-53404">surprising none</a>). But amid the turmoil and confusion of global stock markets, there are a few economic trends which look set to hold sway throughout 2016. </p>
<p>Here’s a wrap up of some of the key developments which will shape our society in the months to come. </p>
<h2>Employment for women</h2>
<p>Many developed economies are experiencing a rise in <a href="http://www.oecd.org/els/oecd-employment-outlook-19991266.htm">total employment</a>. And in most cases, it comes down to one critical factor: the growing number of women joining the work force. This represents one of the biggest social changes of modern times. For example, in the UK, the employment rate for women is the <a href="http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/october-2015/statistical-bulletin.html">highest since records began, at 68.8%</a> – in part due to the ongoing <a href="http://www.thisismoney.co.uk/money/pensions/article-1679780/New-state-pension-age-retire.html">equalisation of men and women’s retirement ages</a>. </p>
<p>Of course, there are <a href="http://www.oecd-ilibrary.org/sites/emp-fe-table-2013-1-en/index.html;jsessionid=26u7ne6j1hnd7.x-oecd-live-02?contentType=%2fns%2fKeyTable%2c%2fns%2fThematic%2c%2fns%2fStatisticalPublication&itemId=%2fcontent%2ftable%2f20752342-table5&mimeType=text%2fhtml&containerItemId=%2fcontent%2ftablecollection%2f20752342&accessItemIds=">still huge discrepancies</a> between the economic rights and opportunities available for women across the globe. But ultimately, nations where women do not work lose out. <a href="http://www.oecd.org/social/bringing-gender-equality-to-the-core-of-the-g20-agenda.htm">Research shows</a> that women’s skills in the labour force add much value to a national economy. Granted, this is partly related to the low pay and promotion inequality facing women, and more progress is needed to address these issues. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/109368/original/image-20160127-26778-wii2ye.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/109368/original/image-20160127-26778-wii2ye.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/109368/original/image-20160127-26778-wii2ye.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/109368/original/image-20160127-26778-wii2ye.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/109368/original/image-20160127-26778-wii2ye.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/109368/original/image-20160127-26778-wii2ye.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/109368/original/image-20160127-26778-wii2ye.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Women at work.</span>
<span class="attribution"><span class="source">from www.shutterstock.com</span></span>
</figcaption>
</figure>
<p>Expect to see women’s employment continuing to rise, and to be associated with economic growth and wider social benefits, despite global economic challenges. In 2016, countries and organisations that give positive employment opportunities to women will have greater chances of doing better, even in tough times. </p>
<hr>
<h2>The debt trap</h2>
<p>While women’s employment may inspire hope in today’s challenging economic environment, credit and debt trends offer less reassurance. After the financial crisis, governments and central banks busted a gut to pump money into the banks and <a href="http://www.bbc.co.uk/news/business-20927534">get them lending</a>. But there is currently a feeling of déjà vu – as though the world could very easily experience another credit crisis in 2016. There are two clear signs: one in the UK, and one abroad. </p>
<p>The first one is that premier league central banker <a href="http://www.bankofengland.co.uk/publications/Pages/speeches/2016/873.aspx">Mark Carney</a> – who transferred from Canada to the Bank of England as the ultimate master of inflation – now has a curious problem. He cannot find any inflation to master. </p>
<p>A little inflation is good for the economy, a bit like one glass of wine a week for health. The UK economy currently gets <a href="http://www.tradingeconomics.com/united-kingdom/inflation-cpi">nowhere near its target of 2%</a>. Inflation would decrease the value of current debts, making them less of a burden. In a world without much inflation, it is hard to get wages up. The worse case scenario is that debt costs increase, as prices and wages stagnate. </p>
<p>Elsewhere, the <a href="http://www.theguardian.com/business/2015/dec/16/federal-reserve-us-interest-rate-rise-fed-funds-janet-yellen">small interest rate rise</a> in the US has made credit more expensive for many. Businesses in rapidly developing countries, which borrowed when the dollar was cheap, look vulnerable. For countries tied into dollar-based lending, there’s <a href="http://on.ft.com/1P8kNvC">cause to fear</a> the appreciation of the dollar against their local currency. </p>
<p>Expect debt statistics to go on spooking commentators throughout 2016. Look for a <a href="http://www.telegraph.co.uk/finance/economics/11869701/Jeremy-Corbyns-QE-for-the-people-is-exactly-what-the-world-may-soon-need.html">different policy approach</a> that tries to kick start credit via governments and central banks. New strategies will be needed to get money to the parts of the economy that can <a href="http://www.neweconomics.org/blog/entry/is-the-uk-really-producing-anything">enhance productivity</a> and pay real, long-term rewards, such as renewable energy. Better this, than for credit to inflate existing assets such as current housing stock, or company merges and acquisitions. </p>
<hr>
<h2>A transport boom</h2>
<p>Speaking of productive growth – transportation has been a <a href="https://www.iea.org/media/workshops/2013/egrdmobility/DULAC_23052013.pdf">key growth area</a> in the world economy, and looks set to continue on this path. </p>
<p>In the UK, the <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/389592/tsgb-2014.pdf">railways have been a growth area</a> for two decades, with more investment planned, albeit not without political pitfalls. And China has seen <a href="http://www.worldbank.org/en/news/press-release/2014/12/19/china-high-speed-rail-the-rapid-growth-of-a-new-travel-option">extraordinary growth </a>in high speed rail development and use. </p>
<p>Meanwhile, air transportation <a href="https://www.iata.org/whatwedo/Documents/economics/passenger-analysis-nov-2015.pdf">grew globally in 2015</a> and “hub” countries such as the UK and Gulf States benefit from this. Low oil prices make flights cheaper and encourage growth. Air transportation in the UK is ripe for expansion, but is linked to <a href="https://theconversation.com/the-solution-to-londons-airport-capacity-crisis-do-nothing-37866">a difficult political decision</a> over London’s runways. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/109498/original/image-20160128-3027-1njt5il.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/109498/original/image-20160128-3027-1njt5il.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=326&fit=crop&dpr=1 600w, https://images.theconversation.com/files/109498/original/image-20160128-3027-1njt5il.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=326&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/109498/original/image-20160128-3027-1njt5il.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=326&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/109498/original/image-20160128-3027-1njt5il.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=409&fit=crop&dpr=1 754w, https://images.theconversation.com/files/109498/original/image-20160128-3027-1njt5il.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=409&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/109498/original/image-20160128-3027-1njt5il.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=409&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Business is booming.</span>
<span class="attribution"><span class="source">from www.shutterstock.com</span></span>
</figcaption>
</figure>
<p>Global <a href="http://www.statista.com/statistics/200002/international-car-sales-since-1990/">car sales</a> continue to rise at a time when oil is cheap. And while the number of <a href="http://www.statista.com/statistics/270603/worldwide-number-of-hybrid-and-electric-vehicles-since-2009/">electric cars</a> grew more rapidly in 2015, they still represent a small proportion of the total. </p>
<p>This productive growth in transportation has to be debated alongside the need for the uptake of greener technology. Many governments know the ultimate prize will be getting ahead with the production of electric cars and the infrastructure they require, in order to reduce pollution and improve health. </p>
<p>For example, the UK government just <a href="https://www.gov.uk/government/news/40-million-to-drive-green-car-revolution-across-uk-cities">financed four UK cities</a> to provide better charging and parking facilities for electric vehicles. In London, the mayoral candidate, Zac Goldsmith, has clearly linked <a href="http://www.standard.co.uk/news/transport/zac-goldsmith-pledges-support-for-electric-car-sharing-scheme-a3164066.html">electric cars with a sustainable environment</a> and proposes financial incentives to encourage their use. Tesla in the US <a href="http://time.com/3995917/elon-musk-tesla-investment/">has invested huge amounts</a> gambling that the electric car will become more popular. Fortune favours the brave.</p>
<p>Expect to see continuing growth in rail and air travel. Meanwhile, the countries and companies that invest to get ahead with electric cars and other green transport options are likely to see the biggest long term returns. Oil will not stay at $30 a barrel forever.</p>
<hr>
<h2>Young people in poverty</h2>
<p>Another key trend is the increase in the poverty experienced by young adults. A growing number of students in the UK are exiting with greater long term debt, while <a href="https://theconversation.com/australian-graduates-who-move-overseas-will-have-to-pay-back-student-loans-50455">Australia is implementing measures</a> to ensure student loans are paid. In the US, <a href="http://www.bloombergview.com/quicktake/student-debt">student debt</a> now stands at $1.3 trillion. </p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/109497/original/image-20160128-3064-121nd0y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/109497/original/image-20160128-3064-121nd0y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=706&fit=crop&dpr=1 600w, https://images.theconversation.com/files/109497/original/image-20160128-3064-121nd0y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=706&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/109497/original/image-20160128-3064-121nd0y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=706&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/109497/original/image-20160128-3064-121nd0y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=887&fit=crop&dpr=1 754w, https://images.theconversation.com/files/109497/original/image-20160128-3064-121nd0y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=887&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/109497/original/image-20160128-3064-121nd0y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=887&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Where’s my piece of the pie?</span>
<span class="attribution"><span class="source">www.shutterstock.com</span></span>
</figcaption>
</figure>
<p>As well as debt, housing will be a major issue for this group. The <a href="http://www.dailymail.co.uk/property/article-3301572/Luxury-house-prices-jump-Vancouver-Sydney-London-Paris-hit-buffers.html">price of property is increasing</a> in major cities such as Sydney, Vancouver, London and New York: these markets require high deposits, and rents are rising. In the UK, this is making <a href="http://www.ifs.org.uk/publications/8052">the generation gap</a> worse, when it comes to wealth: those aged 50 and over own most of the UK’s asset wealth, including housing. </p>
<p>And in this age of austerity, these factors will work against governments seeking to reduce the welfare bill. Recent <a href="http://www.centreforcities.org/press/nearly-a-million-new-jobs-created-in-british-cities-since-2010-but-average-salary-drops-by-1300-per-city-resident/">data shows that</a>, in UK cities, growing numbers of low paid jobs have led to rising claims for welfare such as housing benefits, defeating the government’s aims to reduce spending. </p>
<p>These major challenges for young people prevail across most <a href="http://www.oecd.org/social/OECD2014-Income-Inequality-Update.pdf">developed countries</a>. Expect young adults to be increasingly dependent on wealth transfers from their parents to clear university debt and secure housing, while those without such support face increasing disadvantages. Only major changes in policy can prevent further inequality for this generation. </p>
<p>Politicians are prioritising the needs of the growing older population who are living longer. But the young are paying the price in lost opportunities and look vulnerable to further economic and social change.</p><img src="https://counter.theconversation.com/content/53570/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Philip Haynes has received previous research funding from the ESRC and other government and voluntary sector bodies.</span></em></p>
It’s a turbulent time for the global economy – here’s what to expect.
Philip Haynes, Professor of Public Policy, University of Brighton
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/48864
2015-10-21T10:08:38Z
2015-10-21T10:08:38Z
Angry doctors are just the latest victims of globalisation
<p>The current threat of a <a href="http://www.theguardian.com/society/2015/oct/17/leader-of-nhs-junior-doctors-urges-jeremy-hunt-to-reopen-negotiations">doctors’ strike</a> is just the latest example of the unhappiness of NHS staff. 2014 <a href="http://www.bbc.co.uk/news/health-29838802">saw strikes</a> from nurses, occupational therapists, porters, paramedics and healthcare assistants – the first in the health service since the 1980s. Staff are being asked to make huge <a href="https://theconversation.com/nhs-turns-to-the-car-industry-for-management-ideas-but-it-wont-save-2-billion-33961">efficiency savings</a> after years of small or non-existent <a href="http://www.mirror.co.uk/news/uk-news/nhs-staff-told-no-pay-2937572">pay increases</a>. <a href="http://bit.ly/1FrMdFe">Morale has plummeted</a> as healthcare workers come under fire for the <a href="http://www.theguardian.com/society/2015/oct/15/two-thirds-hospitals-substandard-care-care-quality-commission">quality of NHS care</a>.</p>
<p>The latest conflict is over the planned introduction of a full <a href="https://theconversation.com/iminworkjeremy-why-doctors-are-rejecting-jeremy-hunt-seven-day-roster-45117">seven-day service</a>. Junior doctors are <a href="http://www.theguardian.com/society/2015/oct/17/jeremy-hunt-i-would-protest-if-i-were-a-misled-junior-doctor">being asked</a> to accept a cut in overtime pay in return for an increase in basic pay so that it becomes cheaper for hospitals to employ more staff on evenings and weekends. In response, the doctors have threatened to strike, while the number of physicians applying for documentation to work abroad <a href="http://www.theguardian.com/society/2015/sep/25/nhs-doctors-contract-changes-work-abroad-applications">has soared</a>. </p>
<p>Doctors have the great advantage of being able to take their highly in-demand skills anywhere in the world, sometimes <a href="http://www.businessinsider.com.au/heres-how-much-money-australian-doctors-actually-earn-2014-5">increasing their</a> salary significantly in the process. But part of what’s driving them to leave their homes and families in this way are the pressures created by a globalised labour market. In some ways, doctors have become the latest victims of globalisation, even if they remain in a much more privileged position than lower-skilled workers. </p>
<h2>The trained brain drain</h2>
<p>In the three days after the government revealed its new contracts, the number of doctors applying for a Certificate of Current Professional Status (CCPS) for overseas work rose from the usual 20-25 a day to <a href="http://ind.pn/1FYfWWk">almost 550</a> a day. But the numbers seeking to work abroad has been increasing for some years now. <a href="http://bit.ly/1W3mjEp">General Medical Council figures</a> indicate that the number of UK-qualified doctors issued with a CCPS increased by 22% between 2008 and 2013.</p>
<p>Our own (as yet unpublished) freedom of information request identified that the vast majority – more than 80% – of those issued with a certificate are under the age of 40. During the 2014-15 winter <a href="http://www.telegraph.co.uk/news/uknews/11327043/AandE-crisis-NHS-posts-worst-waiting-time-figures-in-a-decade.html">accident and emergency crisis</a>, the College of Emergency Medicine highlighted a sustained <a href="http://www.rcem.ac.uk/CEM/document?id=8588">“trained brain drain”</a> of staff moving overseas. <a href="http://www.rcem.ac.uk/Training-Exams/EMTA/Trainee%20survey%20and%20report/">Its survey</a> of current trainees indicated this would likely continue into the future.</p>
<p>While we do not know how many of those issued with a certificate actually go abroad to practise, <a href="http://bit.ly/1NSiMVc">the main destination countries</a>, such as Australia and New Zealand, rely heavily on migrant doctors including those from the UK. In the case of <a href="http://bit.ly/1jRuzWI">New Zealand</a>, the UK is the dominant source of overseas doctors, contributing half of its international medical workforce.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/99014/original/image-20151020-32269-1tltnvi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/99014/original/image-20151020-32269-1tltnvi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/99014/original/image-20151020-32269-1tltnvi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/99014/original/image-20151020-32269-1tltnvi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/99014/original/image-20151020-32269-1tltnvi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/99014/original/image-20151020-32269-1tltnvi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/99014/original/image-20151020-32269-1tltnvi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Healthcare now relies on a global workforce.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p><a href="http://www.human-resources-health.com/content/pdf/s12960-015-0069-4.pdf">Healthcare workforce planning strategies</a> in New Zealand, as well as countries such as Australia, New Zealand, Canada and the US explicitly rely on the international recruitment of doctors (and other healthcare professionals) as a solution to domestic shortages. <a href="https://www.rcn.org.uk/__data/assets/pdf_file/0016/482200/004332.pdf">The evidence</a> is that those countries intend to continue this policy for years to come to meet demands for increasing healthcare provision in their ageing societies. These destinations are vigorously competing for healthcare workers, promoting their salaries, professional opportunities and lifestyle to potential healthcare employees.</p>
<p>In such a globalised labour market, UK-qualified doctors have a clear escape route from the austerity-hit NHS. Unlike many other groups of workers, this means they have some bargaining power. They can realistically threaten to take their skills elsewhere. So why does the government seem so determined to antagonise this key group of <a href="https://theconversation.com/jeremy-hunt-cant-win-his-fight-with-doctors-they-have-always-held-the-power-in-the-nhs-48421">powerful professionals</a>?</p>
<h2>Not all austerity is equal</h2>
<p>Part of the answer is that to achieve its commitment to expanding access to NHS services while meeting spending targets, the government will need to be more hard-nosed than in the past when dealing with the medical profession. In this way, doctors are simply victims of the more generalised effort to erode pay and conditions of all NHS staff, and those in the public sector more broadly. </p>
<p>But the globalised labour market that allows UK-qualified doctors to move abroad also means the government can replace them with doctors from countries where the impact of economic crisis and austerity is even worse. So ministers can cut pay and renegotiate working conditions knowing that the NHS will still offer its own advantages of salary, professional opportunities and lifestyle. They are happy to drive away UK-qualified doctors because there are other professionals from poorer countries willing to take their place.</p>
<p>Between <a href="http://bit.ly/1tEtNKf">2010 and 2013</a>, the number of overseas-qualified doctors working in the UK increased significantly faster than that of UK-qualified doctors. The biggest increase was among doctors from other EU countries. Italy is now the top source country in the world for new doctors registering in the UK, followed closely by Greece and Spain. Meanwhile, recruitment from traditional source countries such as Pakistan and India is falling.</p>
<p>It is short-termist for the government to rely on crisis-stricken European countries to replace UK-qualified doctors, and not just because of the money spent on training them that is effectively wasted if they emigrate. When those countries recover their economic position, the global war for talent and skills will strengthen, making the UK less attractive. While NHS employers have recently launched initiatives to encourage UK-qualified doctors currently abroad <a href="http://ind.pn/1zaauuW">to return</a>, it is difficult to see how these can succeed if the new contracts are imposed.</p><img src="https://counter.theconversation.com/content/48864/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
The global game of supply and demand that lets UK doctors move abroad for better pay is the same force pushing down salaries at home.
Majella Kilkey, Senior Lecturer in Social Policy, University of Sheffield
Neil Lunt, Reader in Social Policy, University of York
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/48255
2015-09-29T04:44:52Z
2015-09-29T04:44:52Z
The study of inequality has been mainstreamed – what now for the left?
<figure><img src="https://images.theconversation.com/files/96511/original/image-20150928-30967-4g6efj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Global South is engineering new anti-poverty strategies, leaving traditional left analysts in a quandry.</span> <span class="attribution"><span class="source">Reuters/Nacho Doce</span></span></figcaption></figure><p>It could be said that mainstream economic research is informing the left’s long-term critique of trickle-down economics.</p>
<p>Three extensive pieces of research illustrate how the study of inequality has been mainstreamed. Thomas Piketty, in <a href="http://www.hup.harvard.edu/catalog.php?isbn=9780674430006">Capital in the Twenty-First Century</a>, confirms that market-led growth deepens inequality and good redistributive policies improve growth. Tracing changes in inequality since 1921, <a href="http://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---actrav/documents/publication/wcms_247981.pdf">Kate Pickett and Richard Wilkinson</a> show that among the richest countries, it is the more unequal ones that do worse according to almost every quality of life indicator.</p>
<p>Another important voice is the re-emergence of Keynesian arguments against inequality. In a more recent study <a href="http://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---actrav/documents/publication/wcms_247981.pdf">Herr, Ruoff and Salas</a> argue that financialisation is part of a neoliberal political project designed to increase the share of income going towards profits, thereby increasing inequality. </p>
<p>Three broad conclusions can be drawn from these studies of inequality:</p>
<ul>
<li><p>First, levels of inequality were reduced between the 1920s and the early 1970s by the use of a series of policy instruments, such as progressive taxation and nationalisation. Also key were the growth and development of trade unions. </p></li>
<li><p>Second, inequality has a negative affect on the quality of life, including life expectancy, levels of violence and other societal problems.</p></li>
<li><p>Third, the growth in levels of inequality since the seventies is the result of a political project designed to increase the power of capital over labour. This is especially so of finance capital. This <a href="http://www.boeckler.de/pdf/v_2014_10_30_herr_ruoff.pdf">“neoliberal revolution”</a> has not only increased the share of income going to profits. It has also weakened trade unions and eroded the institutional gains made by workers in advanced capitalist countries after the second world war.</p></li>
</ul>
<h2>Social policy as the panacea</h2>
<p>There has been widespread discussion in recent years of policy instruments such as conditional cash transfers, the basic income grant and increasing taxes on the rich, including a financial transaction tax on high frequency fines. But a number of debates remained unresolved.</p>
<p>One is around social policy. Armando Barrientos and David Hulme suggest that a <a href="http://r4d.dfid.gov.uk/Output/186955/">“quiet revolution”</a> is taking place in social policy in the Global South. They argue that social protection is now better grounded in development theory. </p>
<p>This is especially in an understanding of the factors preventing access to economic opportunity and leading to persistent poverty and vulnerability. The initially dominant conceptualisation of social protection as social risk management is being extended by approaches grounded in basic human need and capabilities.</p>
<p>In practice, this has <a href="http://r4d.dfid.gov.uk/Output/186955/">involved</a> the:</p>
<blockquote>
<p>… rapid up-scaling of programmes and policies that combine income transfers with basic services, employment guarantees or asset building. </p>
</blockquote>
<p>Many of these programmes and policies have been dismissed by the left as <a href="http://econpapers.repec.org/article/gigafjour/v_3a46_3ay_3a2012_3ai_3a2-3_3ap_3a33-62.htm">neo-liberal</a> and <a href="http://ndabaonline.ukzn.ac.za/NewsletterPrinter.aspx?id=26">tokenistic</a>. The question raised by our research is whether, as <a href="http://www.osisa.org/sites/default/files/schools/ferguson_2009_users_of_neoliberalism.pdf">Ferguson</a> provocatively puts it:</p>
<blockquote>
<p>Can we on the left do what the right has, in recent decades, done so successfully, that is, to develop new modes and mechanisms of government? And (perhaps more provocatively) are the neoliberal “arts of government” that have transformed the way that states work in so many places around the world inherently and necessarily conservative, or can they be put to different uses? To ask such questions requires us to be willing at least to imagine the possibility of a truly progressive politics that would also draw on governmental mechanisms that we have become used to terming “neoliberal”.</p>
</blockquote>
<p>The growing institutionalisation of social assistance as a right through intense political struggle is the story in India, Brazil and South Africa. James Ferguson <a href="http://www.osisa.org/sites/default/files/schools/ferguson_2009_users_of_neoliberalism.pdf">suggests</a> that this:</p>
<blockquote>
<p>… redefines groups in poverty as citizens (social citizens). A deepening of democracy follows. </p>
</blockquote>
<p>These emerging welfare regimes of the South, what Ian Gough calls <a href="http://eprints.lse.ac.uk/51023/1/Gough_social_policy_regimes_2013.pdf">informal security regimes</a>, rely on informal work as well as a variety of livelihood strategies such as street trading, the extended family, and the villages and communities within which they are embedded.</p>
<p>But, these schemes merely temporarily alleviate the conditions of the poor; they do not enable the poor to escape poverty. Unlike the social assistance schemes in South Africa and India, the focus of Brazil’s <a href="http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:21447054%7EpagePK:64257043%7EpiPK:437376%7EtheSitePK:4607,00.html">Bolsa Familia</a> programme is not on providing jobs for the unemployed poor. Instead, this scheme and its predecessors focus on a combination of income grant and means to enhance “human capital” development. </p>
<p>This means-tested cash benefit is attached to certain conditions, mainly school attendance and health checks for children.</p>
<h2>What’s needed to bring about real change</h2>
<p>A final key unresolved issue is an identification of the social forces that will align with the union movement. It is important to note that fundamental differences in the perceptions of the role of trade unions exist – differences that have divided the trade union movement since unions first emerged in 19th-century Europe. </p>
<p>The division lies between those who discern significant potential in trade union activity, and those who argue that such activity does not in itself facilitate the transformation of capitalist society. Some hold that it may even inhibit it.</p>
<p>Could the surge of worker and popular resistance worldwide provide the global trade union movement with an opportunity for the optimistic tradition to re-emerge? Could global labour take the lead in developing <a href="http://socialistregister.com/index.php/srv/article/view/18814#.VglNfvnvPIU">a broad coalition</a> of social forces that combines initiatives for change from within government with support for developing wider, more radical sources of power outside?</p>
<p>If the labour movement is to play this broader role, new forms of organisation, new sources of power and new forms of worker solidarity will need to be constructed. </p>
<p>A broader role for labour will require reviving and redefining the role of labour as a <a href="https://books.google.co.za/books?id=FuUmIixUldwC&pg=PA162&lpg=PA162&dq=Flanders,+unions+as+sword+of+justice&source=bl&ots=Hb-Nahmls0&sig=-H45BIYNgfhYpVLoUXD9U9N5L5w&hl=en&sa=X&ved=0CCQQ6AEwAWoVChMI6eW47uKZyAIVS78UCh2cewLh#v=onepage&q=Flanders%2C%20unions%20as%20sword%20of%20justice&f=false">“sword of justice”</a> in the fight against inequality and not as a “defender of vested interest”.</p>
<p>Globalisation must be seen not only as a constraint. It is also an opportunity for new forms of transnational networks to build a movement at various levels, worker to worker, worker to communities, union to union and between labour scholars.</p>
<hr>
<p><em>The article is drawn from Webster, E. and Morris, C. Trade Unions and the Challenge of Economic Inequality: An Unresolved Debate. In Alexander Gallas, A., Herr, H., Hoffer, F. and Scherrer, C. (eds.). Combating Inequality: The Global North and South. London: Routledge.</em></p><img src="https://counter.theconversation.com/content/48255/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Edward Webster is the outgoing director of the Chris Hani institute.</span></em></p>
Could the surge of worker and popular resistance worldwide provide the global trade union movement with an opportunity to take the lead in developing a broad coalition of social forces?
Edward Webster, Professor Emeritus, Society, Work and Development Institute , University of the Witwatersrand
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/46902
2015-09-18T04:35:00Z
2015-09-18T04:35:00Z
How a wage subsidy can alleviate South Africa’s youth unemployment
<figure><img src="https://images.theconversation.com/files/93771/original/image-20150903-8808-1pbmzl7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Unemployed South Africans wait for work outside a factory gate in downtown Johannesburg. A wage subsidy could help reduce the numbers by offering opportunities to school leavers.</span> <span class="attribution"><span class="source">Reuters</span></span></figcaption></figure><p>Over the past 20 years, <a href="http://www.statssa.gov.za/publications/P0211/P02111stQuarter2015.pdf">South Africa’s unemployment</a> has doubled. Youth unemployment in particular has skyrocketed. The hardest hit are school leavers. </p>
<p>There are multiple reasons behind the broad rise in unemployment. One likely explanation for the high unemployment rate in individuals in their 20s has to do with the quality of post-apartheid secondary education. </p>
<p>In a well-functioning labour market, schooling provides important information with which employers can sort potential workers. In South Africa, it’s not just that the quality of schooling is poor, but there is also tremendous variance in this quality across schools. </p>
<p>Simply holding a matric, the qualifying year of high school, does not convey sufficient information to employers. Uncertain worker quality by itself need not be a huge problem if firms can hire and keep workers are good while dismissing those that are not. In South Africa, though, regulations to protect worker job security make dismissing workers potentially difficult and costly. </p>
<h2>The cost of unemployment</h2>
<p>From a macroeconomic viewpoint, unemployed workers represent potential but unrealised output. From a microeconomic viewpoint, unemployed workers leave households with fewer resources and hence more vulnerable. </p>
<p>Workers in their 20s typically begin to accrue the on-the-job human capital that they will use during ensuing decades. Missing this opportunity may convey costs that remain for decades. </p>
<p>Finally, the very high unemployment rate for young South African adults contributes to the social ills that accompany a loss of hope. These include crime, disengagement with the political process, and a lack of investment in one’s future well-being.</p>
<p>Pragmatic policy proposals, then, must work on those margins where change is most feasible and accept constraints that are unlikely to yield in the near term. Better schools, for example, are a fine proposal. </p>
<p>But reforming the education sector is not likely to happen quickly enough to really impact youth unemployment in the short-term. Similarly, a broad overhaul of labour laws is not likely to happen any time soon.</p>
<h2>Wage subsidy may be the best solution</h2>
<p>A policy which is doable is a targeted wage subsidy to facilitate the school-to-work transition. A critical component of the targeted wage subsidy is a probationary period during which subsidies workers may be dismissed at will.</p>
<p>Such a policy is already being <a href="http://www.treasury.gov.za/comm_media/press/2013/20131219%20-%20Employment%20Tax%20Incentive%20FAQs.pdf">piloted</a> by the country’s National Treasury. </p>
<p>A tax on formal sector wages is the norm in many developing countries. This fiscal policy discourages employment in the formal sector and, on the margin, encourages investment in capital instead of labour. </p>
<p>By lowering the cost of labour employed in the formal sector, a wage subsidy increases the demand for labour in the formal sector, increases employment in the formal sector, favours labour over capital, and costs the Treasury. A targeted wage subsidy does this for only a subset of workers, thereby increasing the relative attractiveness of hiring the targeted group relative to those who are not targeted. </p>
<p>The data overwhelmingly suggest that there is something that is preventing young school leavers from entering the labour market, but that once employed, they tend to stay employed albeit not necessarily in the same job. This might be because firms are unwilling to incur the costs of training workers if the workers will then be hired away. </p>
<p>A wage subsidy, while not first best, addresses this issue. The subsidy also addresses the externalities associated with high youth unemployment such as crime, as well as the market imperfection that arises due to negotiated wages. </p>
<p>When dismissal is difficult, it is risky to take on a new worker if that worker’s quality is unknown before hiring. When dismissal is easy, firms can offer a job at a wage that, in expectation, is appropriate to the worker’s expected productivity and then dismiss those that are sub-par while retaining and adjusting upwards the wage of those that are acceptable. When dismissal is difficult, this sort of “experimentation” on the part of the firm is curtailed.</p>
<p>Dismissal costs in South Africa are also perceived to be high. There are compelling historical reasons for many of the rules governing dismissal. </p>
<h2>How concerns can be addressed</h2>
<p>There are several caveats associated with a targeted wage subsidy for youth. First, the free dismissal provision is subject to abuse. This concern is alleviated because it is lousy business to fire good workers, because any training costs would need to be re-incurred, and because even if this happens, the worker still picks up some potentially valuable experience. </p>
<p>Second, the targeted wage subsidy favours young workers so there is the possibility that firms might just substitute the subsidised workers for the existing non-subsidised workers. But the same dismissal rules that make it hard to dismiss workers alleviate this concern. </p>
<p>It is also possible that the subsidy might stigmatise subsidised workers, but if it is nationally implemented, this seems unlikely. </p>
<p>Finally, the policy might be subject to potential fraud. This is a real concern but careful programme design can minimise the problem.</p>
<h2>Crafting the best wage subsidy</h2>
<p>A well-crafted wage subsidy might be implemented as follows. Every South African would become eligible for the wage subsidy upon turning 18 years old. The subsidy would be for a fixed amount of money and would not expire. Each youth would be given an individual subsidy account with a given balance in it. </p>
<p>When the youth took a job for a registered firm, a fraction of the individual’s wage would be drawn from the individual’s account. For a youth earning the average minimum wage, the subsidy might comprise up to half of the wage. </p>
<p>The subsidy would be completely portable. If the individual left a job or was dismissed, the remaining subsidy balance could be used with another employer. The subsidy would not expire so as to lessen the incentive to leave school early. </p>
<p>Finally, employment with the subsidy would allow for a probationary period during which a “no-questions-asked” dismissal policy would be in effect. The period should be long enough for the firm to ascertain whether the worker is a good fit.</p>
<p>Over the longer run, it is important not to lose sight of the underlying issues around school quality and labour market regulations. In the near term, a targeted wage subsidy for recent school-leavers coupled with a probationary period allowing free dismissal is a step in the right direction.</p>
<hr>
<p><em>This is an extract from The Oxford Companion to the Economics of South Africa, edited by Haroon Bhorat, Alan Hirsch, Ravi Kanbur and Mthuli Ncube, and published by Oxford University Press.</em></p><img src="https://counter.theconversation.com/content/46902/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>James Levinsohn receives funding from the Bill & Melinda Gates Foundation. </span></em></p>
South Africa’s unemployment figures have been stubbornly high over the past two decades. One policy measure that could help alleviate the pressure is a youth wage subsidy.
James Levinsohn, Director of the Jackson Institute for Global Affairs, Charles W. Goodyear Professor in Global Affairs & Professor of Economics and Management, Yale University
Licensed as Creative Commons – attribution, no derivatives.