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Spiny Norman
21-03-2009, 06:32 AM
I have the view that this is extraordinarily bad timing. Just as we are slipping inexorably into recession, possibly an extended recession, re-regulation of the job market will definitely cost more workers their jobs.

How do I know? Several employers have recently told me that if this new legilsation goes through, they have already identified some poorly performing workers who will be sacked by June 30, before the new laws take effect.

These are small businesses, employing more than 15 staff (but way less than 100).

There is already a trend of employers using the current economic downturn as an excuse to shed lower performing staff, with the expectation that they can then take their pick from a much larger range of candidates on offer. The new legislation will just rapidly accelerate that trend. Very unfortunate.

Things needed to be made fairer, but I honestly think they've gone too far in the other direction. I'll also bet that most of those who think otherwise will be people who have never tried to run a small business. (I did previously, Gunner does now, anyone else here a small business owner with staff?)

Basil
21-03-2009, 10:26 AM
This post is a very polite (and articulated :lol:) version of what of I think of Laba, Gillard and self-serving fools who marched in fava. Talk about shooting your hard-wired, moronic, mealy-mouthed, clueless selves in the foot!

TheJoker
21-03-2009, 01:55 PM
Snail King and Gunner

What are your opinions of the chaning nature of global employment relations, such that temporary, casual and contractd employees are becoming the norm, as opposed to full-time permanent staff. This means there has been a transfer of risk in regard to economic conditions from the employer to the employee (or more accurately the tax payer) in the name of preserving the bottom line.

We all know that the business cycle is very volatile, the casualisation of the workforce increases that volatility. In effect workforce planning becomes a largley short-term specualtive activity. And at the first sign of trouble there can be a massive reduction in employment as casual and temporary staff are laid-off. The reduction in employment makes the predicition of a recession a self-fulfilling prophecy. It's only natural that this reaction occurs if a downturn is forecast, businesses dont want to suffer a loss in profitability because the they have an inflexible workforce whilst compeititors who down-size are more competitive.

THe resverse occurs in booms the workforce exapnds to meet short-term opportunities beacause ther is little risk in expanding the casual workforce so long-term sustainability need not be considered. The rapid rise in employment stimulates the economy causing further employment, greater investment opportunites and higher assets and commodity prices. The increase return on investment means greater levels of gearing are exceptable. Eventually the capacity in the workforce tightens, increases in inflation and interest rates cause cost to rise dramatically. It all goes belly up, an so we see a massive reduction in employment and a huge economic downturn.

This is indeed a very real social/economic problem that requires a regulatory solution. The problem is that with a globalised economy cpaital is readily transferrable across the world, therefore national level regulation against the casualisation of the workforce just forces firms to move jobs elsewhere. We really need a global regulatory solution. SO that organisation are forced to make workforce decisions that are sustainable long-term (the "old slow and steady wins the race" idea), at least large businesses, I am in favour of maintaining full flexibility of the workforce in small businesses.

Also just for your interest Australia has one of the highest rates of casual labour in the developed world.

Capablanca-Fan
21-03-2009, 02:02 PM
Look at the high unemployment in the Union of Socialist Soviet States of Europe. They have lovely workplace laws that protect workers already in jobs, but because it's too hard to fire, employers are more reluctant to hire.

Seeming good, ending jobs (http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/seeming_good_ending_jobs/)
Andrew Bolt, 21 March 2009

If Labor’s plans won’t cost workers their jobs, Kevin Rudd would simply have said so. But four times he refused (http://www.abc.net.au/am/content/2008/s2521319.htm):


CHRIS UHLMANN: Prime Minister, how does pushing up the cost of labour protect jobs?

KEVIN RUDD: Our belief is that when you look at all the measures that this Government and, for example, governments like the Queensland Government, are investing in the economy through infrastructure; we are out there supporting jobs at the same time as the global economic recession is having an effect on pulling jobs out as well. But…

CHRIS UHLMANN: But you’re making labour more expensive.

KEVIN RUDD: But what we believe is that the right thing to do, consistent with our undertaking to the Australian people, is to provide proper protections.

CHRIS UHLMANN: But those protections cost money and business has to pay it.

KEVIN RUDD: But can I say to you that the overall balance in our workplace relations reforms is right. We crafted this over a long period of time in Opposition; a lot of consultation with Julia Gillard and business over the last 12 months to get the balance right. This is part of the balance, and if you’re out there and you’re one of half-a-million or so workers who would be thrown to one side by Mr Turnbull and his latest flip-flop on policy, well, that’s a matter for Mr Turnbull…

CHRIS UHLMANN: Prime Minister, I can just establish this. You say you’re pushing the balance back and you’re pushing it back towards employees, that makes the cost of labour more expensive for employers, doesn’t it? And your award changes will do the same thing. How does that protect jobs?

KEVIN RUDD: The whole challenge with a workplace relations system is to get the balance right, and in the economy overall, to make sure that we are doing the right thing to provide support for economic activity. You’ve got workplace relations here, implementing our mandate, getting the balance right, and at the same time, us quite clearly investing a large amount of money in the economy at a time of global recession to lift the prospect of further jobs in the economy.

CHRIS UHLMANN: And in a time of global recession, do you need to make the cost of labour more expensive? Won’t that just mean that employers will not hire people?

KEVIN RUDD: At a time of global economic recession, what you need to do is to honour your word, get on with the business of providing proper protection for people in the workplace, as we said we would, as Mr Turnbull said we had a mandate to do, and if you are one of those half-million Australians right now, you’re going to be looking for the protection which we promised to give them. Only the Senate and the Liberal Party stand in the way of that.

CHRIS UHLMANN: One last question. Doesn’t more expensive labour mean less jobs?

KEVIN RUDD: What you do, as far as overall economic management is concerned, is you advance on a range of fronts. You get out there, you invest in infrastructure to support jobs, you provide payments to people to support 1.5-million employees in the retail sector, you are out there across a whole range of different policies supporting jobs in the economy, and at the same time, as part of a balanced overall approach, giving proper protections to people in the workplace.
It really is true and it really is disgraceful. Rudd himself cannot deny it - his plans will make hiring workers more expensive, and so people will lose their jobs. This is not just a farce, but a crime. How dare the unions applaud.

eclectic
21-03-2009, 02:08 PM
This is not just a farce, but a crime. How dare the unions applaud.

so long as companies posting obscenely huge profits and retiring CEO's leaving with huge golden handshakes despite these recessionary times are seen as crimes too then who am i to argue? ;)

Spiny Norman
21-03-2009, 03:50 PM
re: casual labour ... it has its place ... but it would be a very bad thing if it dominated the market. its important for the benefit of both employers and employees that permanent positions make up the majority. permanency offers a measure of security to both parties, which is good for business and less stressful for the employee.

Capablanca-Fan
21-03-2009, 05:00 PM
so long as companies posting obscenely huge profits
Define "obscene". Such meaningless words are part and parcel of leftist rhetoric, serving to incite envy but lack objective merit.

And in the private sector, the only way to make huge profits is to give huge numbers of people what they want at prices they are prepared to pay. Thanks to the profit motive, many people, including poor ones, can buy cheap goods to improve their quality of life.


and retiring CEO's leaving with huge golden handshakes despite these recessionary times are seen as crimes too then who am i to argue? ;)
What really is a crime is using taxpayers' money to bail them out. If there were no bailout, AIG could not have paid the bonuses. But now the corrupt US Congress whinges that they are paying their bonuses, when Congress signed legislation that explicitly included them (http://townhall.com/Columnists/KevinJames/2009/03/20/obama_squandered_the_leverage_to_stop_the_aig_bonu ses), and impose a retro-active 90% tax (http://townhall.com/Columnists/LawrenceKudlow/2009/03/20/a_hidden_agenda_behind_the_90_percent_tax). The harm of such ex post facto legislation will not stop there. It will create a climate of uncertainty, just like that which prolonged the Great Depression.

And Layba types were rank hypocrites for whinging about the salary of the CEO of Pacific Brands, the boss of 5000 employees, then are happy to pay the same amount to bring Tiger Woods here (http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/column_giving_tiger_what_we_deny_sue/).

Basil
21-03-2009, 06:36 PM
Snail King and Gunner, what are your opinions of ...
What a loaded, simplified, model-watching pile of balls! No wonder Rudd and Gillard can spew out the hopeless positions they hold when simplified tenets like these are held up as fact.

I might find the time time to pick at your statements one by one - then again I might not. Knowing me, I probably will ... :wall:

Igor_Goldenberg
21-03-2009, 06:43 PM
It took less then three minutes for my 11yo son to work out that:
"An employer is less likely to hire if it's more difficult to fire"

Capablanca-Fan
21-03-2009, 06:51 PM
This is indeed a very real social/economic problem that requires a regulatory solution. The problem is that with a globalised economy cpaital is readily transferrable across the world, therefore national level regulation against the casualisation of the workforce just forces firms to move jobs elsewhere. We really need a global regulatory solution.
We should NOT give up our national sovereignty to trans-national progressivist bureaucrats who are unaccountable.

TheJoker
21-03-2009, 08:50 PM
We should NOT give up our national sovereignty to trans-national progressivist bureaucrats who are unaccountable.

No-one was proposing such a thing, I thinking more along the lines of a collaboration between national governments.

TheJoker
21-03-2009, 09:13 PM
What a loaded, simplified, model-watching pile of balls! No wonder Rudd and Gillard can spew out the hopeless positions they hold when simplified tenets like these are held up as fact.

I might find the time time to pick at your statements one by one - then again I might not. Knowing me, I probably will ... :wall:

Simplified of course how could it not be on a bulletin board? Asking a loaded question often saves time in getting to the point of the topic you wish to discuss, so I wont make any apologies there.

As for model watching you are right the theory proposed does on a cursory inspection seem to fit the economic data, I dont see how this is a bad thing?

I doubt anybody holds what I said up as a fact, its simply an opinion based on observation not any serious research. I'll admit on re-read it does sound like I am making a statement.

My post may well be a "pile of balls" perhaps it making up for lack balls shown by you in not offering a counter-arguement ;)

Basil
21-03-2009, 09:25 PM
My post may well be a "pile of balls"
It is.


perhaps it making up for lack balls shown by you in not offering a counter-arguement ;)
As I said, probably coming.

Davidflude
21-03-2009, 09:53 PM
Define "obscene". Such meaningless words are part and parcel of leftist rhetoric, serving to incite envy but lack objective merit.

And in the private sector, the only way to make huge profits is to give huge numbers of people what they want at prices they are prepared to pay.

The way to make huge profits are:-

1) ponzi schemes

2) monopolies or ersatz momopolies

2) Oligopolies

Capitalism is very good at forcing profits down to what is reasonable over time.

Capablanca-Fan
21-03-2009, 10:42 PM
The way to make huge profits are:-
The ways below are insignificant to the fortunes made by Microsoft, Walmart, Woolworths etc., which provide people with cheap goods and improve their standard of living. The same goes for the misnamed robber barons (http://capmag.com/article.asp?id=39)of 100 years ago, who likewise found ways to supply products more cheaply.


1) ponzi schemes
Which are illegal, except for US Social Security (http://www.isil.org/resources/lit/time-to-end-ss.html). Real capitalism is not anarchy, but the free exchange of goods and services without fraud or coercion.


2) monopolies or ersatz momopolies
Monopolies have the best chance when the government prevents competition.


2) Oligopolies
Once again, cartels are usually government backed.

2) Oligopolies
Capitalism is very good at forcing profits down to what is reasonable over time. [/QUOTE]
Whatever "reasonable" means. But indeed, in a free market, if one company is making huge profits, it means there is demand for what they produce, which is an incentive for competitors to enter and make even more of this product. So the price comes down and consumers win.

TheJoker
21-03-2009, 10:56 PM
Once again, cartels are usually government backed.

Actually Oligopolies are in many industries the natural outcome of a mature capitalist marketplace (that's not to say they are overt cartels) but incentives do exist to avoid price wars.

Igor_Goldenberg
23-03-2009, 03:17 PM
Capitalism is very good at forcing profits down to what is reasonable over time.

Good point!

Capablanca-Fan
23-03-2009, 05:30 PM
It took less then three minutes for my 11yo son to work out that:
"An employer is less likely to hire if it's more difficult to fire"
Well, he has an unfair advantage over most adults: he hasn't suffered through 12 years of indoctrination and brain-addling by teachers who are members of leftist pro-Layba teachers unions.

Basil
23-03-2009, 05:47 PM
Well, he has an unfair advantage over most adults: he hasn't suffered through 12 years of indoctrination and brain-addling by teachers who are members of leftist pro-Layba teachers unions.
I regret that I am prevented (by my own rules) from awarding HCDs for political comment. Brain-addling! :clap: That sits nicely with some of Bill and Kevin vernacular (eg dribble and wibble) that I have appreciated over the two or so years here.

Capablanca-Fan
31-03-2009, 12:47 PM
Unfair law toxic for small businesses (http://www.theaustralian.news.com.au/story/0,25197,25265381-7583,00.html)
Barry Cohen (Former Labor Minister)
The Australian 31 March 2009

...

During 50 years of running small businesses, the untold stories would fill an encyclopedia. Most employees were honest, loyal and hardworking, and no sane employer would sack them. Then there were the others.

Few will be surprised to learn that I am not an admirer of the unfair dismissal clauses in the recently passed Fair Work Bill. In fact, I detest them. The Government places great stress on the rights of employees while ignoring those of employers.

...

The depressing part about this debate is that the Coalition, while opposing unfair dismissal, has argued about numbers, not the principle: the right of employers to choose their staff.

...

I'm amazed the Government doesn't recognise the burden it is placing on small business by not allowing them to employ whoever they wish.

It claims unfair dismissal laws will not increase unemployment. It is deluding itself. Any employer with close to 15 employees will think long and hard before employing new staff.

The reason for this blind spot is not difficult to discern.

Increasingly, those who make up the Labor caucus have less and less business experience. Each successive parliament in recent years has Labor members and senators with the same background: teachers, lawyers, public servants, party apparatchiks and trade union officials.

Noble occupations all, but a vastly different mix from when I came to Canberra 40 years ago. We had all the above but we also had farmers, policemen, doctors, chemists, journalists, accountants, small-business people and more. Unfair dismissal legislation would never have passed caucus, let alone cabinet.

It's never too late for a government to recognise it is in error. Let's hope it has the courage to do so.

Basil
31-03-2009, 12:59 PM
^ :clap:

Fantastic!

I'm very tempted to make this a thread by itself,
Lock it,
Make it mandatory reading in chess chat sign up
Print it

and shove it up the nose of every clueless plank (the majority) walking the streets who bought the awful demonising ad camapign on the back of which Krudd's Laba won the last election.

Basil
31-03-2009, 01:07 PM
But it's just not that of course. The idea that employers will play with people's lives and flick them out of work (and replace with another) to save a few bucks is the dark cluelessness of the suspicious and talentless.

The reality is that great staff are the lifeblood of any organisation big or small and talented, successful employers will reward employees appropriately and do whatever they can to hold on to them.

Once again the left has bent their supporters over and done a very rude thing to them. Or murdered in their beds - whichever you prefer.

Desmond
31-03-2009, 01:31 PM
But it's just not that of course. The idea that employers will play with people's lives and flick them out of work (and replace with another) to save a few bucks is the dark cluelessness of the suspicious and talentless. I know people who have been given a new contract at less pay (50% of his current pay in one case) and told to sign it or get out.

eclectic
31-03-2009, 02:24 PM
I know people who have been given a new contract at less pay (50% of his current pay in one case) and told to sign it or get out.

such people may well be "forced" to sign such a contract but with a 50 % pay reduction they would be mentally spending 50 % of their work time thinking about where else to work and any respect or loyalty they might have had for that employer would now be 0 %

Spiny Norman
31-03-2009, 02:32 PM
Just as there are bad employees, so there are also bad employers. Neither side has a monopoly on the moral high ground. Employers that mistreat employees get a reputation for doing so, find it hard to hire good people, and eventually suffer the economic consequences. Similarly, employees that mistreat their employer (or are just incompetent) get a reputation for being hopeless and eventually they too suffer the economic conequences of their actions.

pax
31-03-2009, 04:41 PM
Just as there are bad employees, so there are also bad employers. Neither side has a monopoly on the moral high ground. Employers that mistreat employees get a reputation for doing so, find it hard to hire good people, and eventually suffer the economic consequences. Similarly, employees that mistreat their employer (or are just incompetent) get a reputation for being hopeless and eventually they too suffer the economic conequences of their actions.
This is true, and in economic boom times such as those we have seen in recent years, it has been suicide for companies to mistreat employees who can easily find work elsewhere, and who are not easy to replace.

The problems occur when economic conditions deteriorate, and unemployment rises. That is when some companies see an opportunity to cut salaries and employment conditions with little fear that workers will be able to find work elsewhere.

Rincewind
31-03-2009, 05:44 PM
This is true, and in economic boom times such as those we have seen in recent years, it has been suicide for companies to mistreat employees who can easily find work elsewhere, and who are not easy to replace.

The problems occur when economic conditions deteriorate, and unemployment rises. That is when some companies see an opportunity to cut salaries and employment conditions with little fear that workers will be able to find work elsewhere.

I think there is nearly always a balance of power issue in such negotiations. Usually the balance of power is with the employer so they generally have the greater opportunity to abuse that power.

However salaries falling is not necessarily a symptom of immoral employment practices. Just as salaries rise in time of acute skill shortage, so too when demand abates salaries should fall. I think the expectation of ever increasing salaries are a little unrealistic.

Capablanca-Fan
31-03-2009, 05:46 PM
The problems occur when economic conditions deteriorate, and unemployment rises. That is when some companies see an opportunity to cut salaries and employment conditions with little fear that workers will be able to find work elsewhere.
Some companies cut salaries not because they hate their staff, but because there is simply less money coming in. A major reason that the Detroit car companies are in such trouble is that the unions have kept wages much higher than comparable ones in Toyota etc. But sensible companies would make sure that the people at the top share the pain too, and take the salary cuts they are imposing on their staff.

Basil
31-03-2009, 08:33 PM
I know people who have been given a new contract at less pay (50% of his current pay in one case) and told to sign it or get out.
I would like to (need to) know a little more about this. Clearly he(?) wasn't on an award. Was he being over-paid IYO?

In any event, I don't doubt there are rogue employers (albeit shooting themselves in the foot) willing to take advantage at any opportunity (just like there are rogue employees).

My objection is the demonisation of Work Choices and the people who introduced it as opposed to the people who sought to exploit it.

Desmond
31-03-2009, 08:46 PM
I would like to (need to) know a little more about this. Clearly he(?) wasn't on an award. Was he being over-paid IYO?He is a programmer and no, not on an award. Not sure what his salary is, would estimate not less than 70k. Perhaps a fair bit more than that. A nice salary, to be sure, but not excessive for his skills and experience etc.


In any event, I don't doubt there are rogue employers (albeit shooting themselves in the foot) willing to take advantage at any opportunity (just like there are rogue employees). OK then we are in agreement. I think you may have overstated your position in that last bit I quoted.

TheJoker
31-03-2009, 11:13 PM
But it's just not that of course. The idea that employers will play with people's lives and flick them out of work (and replace with another) to save a few bucks is the dark cluelessness of the suspicious and talentless.

The reality is that great staff are the lifeblood of any organisation big or small and talented, successful employers will reward employees appropriately and do whatever they can to hold on to them.

Gunner what you say is generally true especially for small business, however we have seen that quality staff will be tossed aside and replaced if the savings are great enough. It certainly was the case with early call centres in India and early manufacturing in China (although the quality of both has improved dramtically over the past few years). It also depends on the particular labour market and whether there is a shortage of skilled/quality workers or an excess. Remember the IT boom, those guys earning the megabucks were often tossed aside once the labour market had developed the capacity to meet the demand.

But in general I agree, employers do often spend alot of energy and money trying to retain quality staff (especially since there are a lot of skills shortages). I have seen organisations spend a fortune on developing their staff only to have the employee resign at the drop of a hat because some else offered them a few more bucks, without a thought for the investment their current firm has made in their career. To me thats unfair resignation. But then again the rights of the inidividual should always be paramount to that of the organisation, since organisations are here to serve the needs of people and not vice versa.

And having workforce flexibility does create jobs that otherwise might not exist. However, workforce flexibility does have other social and economic impacts, that need to be weighed against the benefits. It's really not a simple as it's often made out to be. It's even harder to develop a set of effective regulations.

Capablanca-Fan
31-03-2009, 11:17 PM
Thomas Sowell:


It would be devastating to the egos of the intelligentsia to realize, much less admit, that businesses have done more to reduce poverty than all the intellectuals put together. Ultimately, it is only wealth that can reduce poverty and most of the intelligentsia have no interest whatever in finding out what actions and policies increase the national wealth.

Think about the things that have improved our lives the most over the past century-medical advances, the transportation revolution, huge increases in consumer goods, dramatic improvements in housing, the computer revolution. The people who created these things-the doers-are not popular heroes. Our heroes are the talkers who complain about the doers.

TheJoker
31-03-2009, 11:54 PM
Thomas Sowell:


It would be devastating to the egos of the intelligentsia to realize, much less admit, that businesses have done more to reduce poverty than all the intellectuals put together. Ultimately, it is only wealth that can reduce poverty and most of the intelligentsia have no interest whatever in finding out what actions and policies increase the national wealth.

Think about the things that have improved our lives the most over the past century-medical advances, the transportation revolution, huge increases in consumer goods, dramatic improvements in housing, the computer revolution. The people who created these things-the doers-are not popular heroes. Our heroes are the talkers who complain about the doers.

What a bunch of rubbish, these organisatons/brands are admired IBM, Microsoft, Google, Apple, Genreal Electric, Mercedes, BMW, Viagra. As are numerous individuals Bill Gates, Sergey Brin, Larry Page, Richard Branson and Henry Ford for example.

Marketing ensures that the loyalty/admiration whatever you want to call it lies mainly with the brand and not the individual, as its more sustainable that way.

Brands are greatly admired by today's youth, Sowell needs to get out a bit more. :rolleyes:

Basil
19-02-2010, 08:52 AM
Didn't know whether to put this gem (http://www.news.com.au/business/business-smarts/bosses-rapped-for-valid-sacking/story-e6frfm9r-1225832031738) here, or under 'Wall-To-Wall Labor' or start a new thread entitled 'Wake Me Up When You've Finished Shagging This Country Senseless'.

Igor_Goldenberg
19-02-2010, 10:33 AM
That article came to my attention as well.
I was interested what spin would ABC or TheAge put on this story.
They took the easy way out - not reporting at all.

Capablanca-Fan
19-02-2010, 11:13 AM
Now, being a hopeless employee is job security (http://www.theaustralian.com.au/business/legal-affairs/bosses-rapped-for-valid-sacking/story-e6frg97x-1225831970896), even for a legitimate firing:


THE nation’s industrial umpire has ruled that a long-term employee who was legitimately sacked for repeated safety breaches must be reinstated and paid compensation because of his poor education and poor job prospects.

In the latest ruling to concern business, Fair Work Australia found the worker had engaged in “relatively serious misconduct”, but ruled the sacking harsh due to his length of service and the fact he was a poorly educated middle-aged family man…

During a shutdown at Norske Skog Paper Mills in Albury last September, Paul Quinlivan and a colleague were cleaning out a tank that captured staples from recycled pulp, when he repeatedly removed his safety glasses and was told four times by a manager to put them back on.

The tribunal accepted that his repeated failure to wear the safety glasses and his disdainful and abusive response to management amounted to serious misconduct…

But the tribunal said the sacking was a “disaster” for Mr Quinlivan, taking into account that he had worked at the mill for 20 years, was married with two daughters, aged nine and 11, and had a mortgage of about $70,000. It also considered that Mr Quinlivan left school at 16, did not complete secondary school and had not found another job.

“If the applicant had substantially lesser service; had not been a middle-aged man with very poor employment prospects for whom the dismissal has such serious personal and economic consequences; or if it had been brought home to him at any time on 2 September, 2009, that a further breach would have serious consequences, I would not have concluded that the dismissal was harsh,” vice-president Michael Lawler found.

He said Mr Quinlivan should have been warned rather than sacked [duh, he WAS warned several times!]. He ordered his reinstatement and that he be paid $16,000.

Nice for those already in work. But devastating for those looking for work, since what employer will take a risk on them now?

Capablanca-Fan
19-02-2010, 11:15 AM
What a bunch of rubbish, these organisatons/brands are admired IBM, Microsoft, Google, Apple, Genreal Electric, Mercedes, BMW, Viagra. As are numerous individuals Bill Gates, Sergey Brin, Larry Page, Richard Branson and Henry Ford for example.
Not among the intelligentsia, which is what Dr Sowell was talking about. These groups are also often targets for "anti-trust" laws, so vague that they enable targeting for setting prices too high, too low, or too similar to competitors.

Capablanca-Fan
19-02-2010, 11:19 AM
And having workforce flexibility does create jobs that otherwise might not exist.
Indeed, such as thousands of popular after-school jobs that are under threat (http://www.theaustralian.com.au/news/nation/workers-employees-protest-against-minimum-hours-rules/story-e6frg6nf-1225830262319)because of Commissar Gillardova's minumum-hour rules.

Leftards don't want to admit that the best protection an employee has is other employers.

Desmond
19-02-2010, 01:13 PM
Gunner what you say is generally true especially for small business, however we have seen that quality staff will be tossed aside and replaced if the savings are great enough. It certainly was the case with early call centres in India and early manufacturing in China (although the quality of both has improved dramtically over the past few years).From what I have seen this is true. During the downturn, manufacturers downsized their workforce. The downturn either wasn't as severe, and/or didn't last as long, as expected, and now (late last year) that the market has recovered there aren't enough feet on the ground in plant to actually meet the demand. This is true across a number of IT vendors.



But in general I agree, employers do often spend alot of energy and money trying to retain quality staff (especially since there are a lot of skills shortages). I have seen organisations spend a fortune on developing their staff only to have the employee resign at the drop of a hat because some else offered them a few more bucks, without a thought for the investment their current firm has made in their career. To me thats unfair resignation. I doubt many employees who have had siginificant amounts of training provided to them are unaware of that fact. It is about striking a balance between increased wages as a result of knowledge, skills, and experience and the investment a company makes in those things. If you give them training but not incease wages or promotion or something then it's not really career development from their point of view. It's potential for career development. If that potential is not realised at their current employer, what option does that leave?

Another point worth noting is that contracts will often have clauses whereby an employee who receives expensive training an leaves shortly after can be held liable to repay the cost of that training.

Goughfather
19-02-2010, 01:32 PM
Indeed, such as thousands of popular after-school jobs that are under threat (http://www.theaustralian.com.au/news/nation/workers-employees-protest-against-minimum-hours-rules/story-e6frg6nf-1225830262319)because of Commissar Gillardova's minumum-hour rules.

What rot. I observe the following two examples in the tabloid article quoted:


Ben Kearney, from the Australian Newsagents Federation, said newsagency delivery truck drivers, whose early morning work lasted 1 1/2-2 hours, would be affected by the four-hour minimum work rule under the transport award. "It will potentially lead to the loss of some people's jobs," Mr Kearney said.

There were also fears the retail award's three-hour minimum rule could cost jobs in fitness centres.

Breathe Wellbeing, in inner-city Melbourne, opens from 6am to 8am for pre-work fitness classes, and then shuts until 11.30am. Owner Roger Jones said his receptionists could no longer work that shift under the new laws, but he did not want to close in the mornings or sack staff.

Is Kearney suggesting that newsagents are going to stop selling newspapers? If not, then how does he plan to have newspapers delivered without staff to do so?

Given that the 6am to 8am pre-work fitness classes are probably highly lucrative, is Roger Jones really going to leave the receptionist desk unmanned for those two hours, thereby turning his business into a running joke? Or is it more likely that the receptionist will attend to general duties between 6 and 8, followed by an hour of other appropriate administrative tasks for the following hour?

With employer groups leading the charge against new IR laws, you'd think the first question one would ask is whether concerns these employers purport to have on the behalf of employees are simply rhetorical hogwash. When the rubber hits the road, Kearney knows that newsagents still need people to deliver the papers and Jones knows full well that he'll keep the 6-8 session going with a receptionist running the desk. Unfortunately, the Jonos of this world simply don't get it.

Goughfather
19-02-2010, 01:48 PM
I doubt many employees who have had siginificant amounts of training provided to them are unaware of that fact. It is about striking a balance between increased wages as a result of knowledge, skills, and experience and the investment a company makes in those things. If you give them training but not incease wages or promotion or something then it's not really career development from their point of view. It's potential for career development. If that potential is not realised at their current employer, what option does that leave?

I tend to agree. If one honestly sees the employer-employee relationship and the determined wage of the employee being determined by market forces, then an employer should no more expect an employee to stick around to his or her own disadvantage than the employee should expect the employer to retain him or her at his or her disadvantage. Nor can employers expect loyalty to count for anything if their own decisions are founded upon their bottom line. A smart employer should come to a proper understanding of what their employee is worth before their employee, or worse still, their opposition does and take proactive steps to keep their employee happy, just as the employee does to maintain his or her own job security.

Of course, it's worth noting that advantage or disadvantage are more than mere economic considerations. I would much prefer to stay in a position where I fit in with the culture than move to a workplace with uncertain dynamics offering me a few more dollars.

Capablanca-Fan
19-02-2010, 01:58 PM
What rot. I observe the following two examples in the tabloid article quoted:
Ah yes, typical LeftyAnointed who knows better how to run a business than the businessman himself. And the businessman is risking his own money, while the LeftyAnointed pay no price for being wrong in their third-party interference. But their interference makes them feel smug and morally superior, which is more important to them them than actual results, like schoolkids losing their jobs.


Is Kearney suggesting that newsagents are going to stop selling newspapers? If not, then how does he plan to have newspapers delivered without staff to do so?
Ditch the after-school jobs that Commissar Gillardova has verboten, and find another way, but not to the benefit of young workers looking for jobs.

We already know that employers coped with minimum wage laws as well, but not to the benefit of young people or their businesses. For example, now people pump their own petrol and wash their own windscreens, since petrol station owners can no longer hire kids to do that. And movie goers now stumble in the dark since the laws forbid theatre owners to hire ushers below a certain wage. But GF doesn't mind the loss of jobs, as long as people lucky enough to find jobs get their minimum wage.


With employer groups leading the charge against new IR laws,
Ah, evil employers. But when unions led the charge against Work Choices, that's pure altruism.


you'd think the first question one would ask is whether concerns these employers purport to have on the behalf of employees are simply rhetorical hogwash. When the rubber hits the road, Kearney knows that newsagents still need people to deliver the papers and Jones knows full well that he'll keep the 6-8 session going with a receptionist running the desk.
He won't be able to hire schoolkids after school. But even though the schoolkids want the jobs, and parents want them to take these jobs, GF and Gillardova know better.


Unfortunately, the Jonos of this world simply don't get it.
I.e. I prefer to listen to those whose own money, rather than lefties who don't stand to lose anything by their impositions,

Goughfather
19-02-2010, 02:26 PM
Ah yes, typical LeftyAnointed who knows better how to run a business than the businessman himself. And the businessman is risking his own money, while the LeftyAnointed pay no price for being wrong in their third-party interference. But their interference makes them feel smug and morally superior, which is more important to them them than actual results, like schoolkids losing their jobs.


What interference? Who am I stopping from doing as they like? And precisely how much does your insipid punditry cost you, you hypocrite?


Ditch the after-school jobs that Commissar Gillardova has verboten, and find another way, but not to the benefit of young workers looking for jobs.

"Another way"? Sounds like you wouldn't have a clue.


We already know that employers coped with minimum wage laws as well, but not to the benefit of young people or their businesses. For example, now people pump their own petrol and wash their own windscreens, since petrol station owners can no longer hire kids to do that. And movie goers now stumble in the dark since the laws forbid theatre owners to hire ushers below a certain wage. But GF doesn't mind the loss of jobs, as long as people lucky enough to find jobs get their minimum wage.

While we're entering your utopian Dickensian society, how about we slash wages by 50 percent (but only of unskilled, rather than skilled workers) so that employers could afford to hire twice as many people? We could double the number of new jobs overnight. Or how about we conscript people to work for free? After all, it worked wonders for cutting the black unemployment rate in America before the Civil War.


Ah, evil employers. But when unions led the charge against Work Choices, that's pure altruism.

Not evil. Just self-interested. Just as the unions are, except that representing the interests of unionised workers and even un-unionised workers is in the self-interest of the unions.


He won't be able to hire schoolkids after school. But even though the schoolkids want the jobs, and parents want them to take these jobs, GF and Gillardova know better.

If he wants to run his shop, he will. And by the way, her name is Gillard.

For all your crocodile tears concerning unemployment, you don't seem to recognise, let alone address the chronic problem of underemployment that exists under your Dickensian model and remains an increasingly problematic structural issue in the Australian workforce.


I.e. I prefer to listen to those whose own money, rather than lefties who don't stand to lose anything by their impositions,

And I prefer to listen to those who hold themselves to the same standard by which they judge others and don't believe that one creates an imposition simply by expressing an opinion not shared by them.

Capablanca-Fan
19-02-2010, 03:39 PM
What interference? Who am I stopping from doing as they like?
The policies you advocate stop an employee from working for less than three hours, even if they want to and their parents are happy for them to work.


And precisely how much does your insipid punditry cost you, you hypocrite?
The point is, what I am advocating does not interfere with people's choices.
But the policies of Labor and their union allies cost them nothing, but cost employees' jobs and employers.


"Another way"? Sounds like you wouldn't have a clue.
I don't pretend to—which is why I don't presume to tell an employer how to run his business or an employee what he can't do. But then I'm not telling an employee that he can no longer work under conditions he was happy to accept.


While we're entering your utopian Dickensian society,
George Reisman's book Capitalism: A Treatise on Economics points out that the reason for the poverty was exploitation but low productivity of labour. So people had to work much harder and for longer just in order to produce enough to survive. The basic machinery we take for granted today was not available back then. So the working conditions were Dickensian simply because the means of improving them had not been invented. Furthermore, children were not forced to work by heartless exploiting employers, but by their parents, so the family could make enough to survive. It was not child labour laws but increasing productivity of labour that spelled the end of child labour. Reisman writes:


The abolition of child labor was an accomplishment of capitalism and the rise in the produc¬tivity of labor it achieved. As in the case of maximum-hours laws, insofar as child-labor laws merely ratified the abolition of child labor already being achieved by the market, they were superfluous. Insofar as they went ahead of the market, and imposed reductions in child labor beyond what parents judged their families could afford, they were destructive. Along with depriving poor families of urgently needed income, they had the effect of forcing children to work at lower wages and in poorer conditions than they needed to.


how about we slash wages by 50 percent (but only of unskilled, rather than skilled workers)
Missing the point, as usual for a lefty. The notion of "we" slashing wages still implies outside parties setting wages. I oppose that. Supply and demand should set wages. If leftard third parties declare that no one can be hired below a certain wage, then that discriminates against the low-skilled whose work is less productive than that arbitrary amount. This denies workers the chance to develop useful skills, such as punctuality, serving customers, co-operating with other staff, handling money.

Lefties denounce "McJobs", but in reality they are useful training for young people. The list of ex-McDonald employees include Andy Card, White House chief of staff; Jeff Bezos, founder and CEO of Amazon.com; Jay Leno, "Tonight Show" host; Carl Lewis, Olympic gold medalist; Joe Kernan, former Indiana governor; and Robert Cornog, retired CEO of Snap-On Tools.


so that employers could afford to hire twice as many people? We could double the number of new jobs overnight.
What rubbish. In a free society, supply and demand would determine wages. And as I pointed out, employees would be protected by rival employers who could offer better conditions.


Or how about we conscript people to work for free? After all, it worked wonders for cutting the black unemployment rate in America before the Civil War.
Again, the leftard GF can't escape his mentality of telling other people what to do. The free market means choice,/I] the [I]antithesis of slavery. Slavery was actually an economic disaster, which is a major reason that the South lost the US War Between the States. Brazil was so economically backward even though they retained slavery for longer than any other country in the Americas. It happens to be a fact that slaves in ancient Rome were not the source of their wealth but a demonstration that the owner was wealthy enough to own slaves. This is documented in Conquests and Cultures by Thomas Sowell (himself black). Southpaw Jim, a leftist economist, pointed out (http://chesschat.org/showthread.php?p=174239&highlight=dismal+science#post174239):


Jono's 100% correct on the economics of slavery. BTW, a little known fact: economics is known as the "dismal science" not because of recessions and so on, but because this phrase was used as propaganda by the slavers when economists in the 19th Century advocated the abolition of slavery on economic grounds — claiming that the abolition of slavery would ruin the nation... sound familiar?


Not evil. Just self-interested. Just as the unions are, except that representing the interests of unionised workers and even un-unionised workers is in the self-interest of the unions.
Not so. Milton Friedman pointed out that their support for minimum wage laws protected the unions from competitions. And in its effects, the minimum wage laws were the most anti-black laws in America.
ca8Z__o52sk


If he wants to run his shop, he will.
But you and Gillardova want to tell him how to do so.


For all your crocodile tears concerning unemployment, you don't seem to recognise, let alone address the chronic problem of underemployment
This "underemployment" is wanted by those schoolkids working at newsagents.


that exists under your Dickensian model
Here we go with the gross misunderstanding of the problem of early Victorian England.


and remains an increasingly problematic structural issue in the Australian workforce.
Not at all. Australian unemployment would be minimal under a policy like the LDP's Friedmanite negative taxation (http://ldp.org.au/index.php?option=com_content&view=article&id=1164:taxation&catid=101:policies&Itemid=290).


And I prefer to listen to those who hold themselves to the same standard by which they judge others and don't believe that one creates an imposition simply by expressing an opinion not shared by them.
It's an imposition by definition if a policy declares that an employee MUST take a paid job for less than three hours.

TheJoker
25-02-2010, 03:13 PM
We already know that employers coped with minimum wage laws as well, but not to the benefit of young people or their businesses. For example, now people pump their own petrol and wash their own windscreens, since petrol station owners can no longer hire kids to do that. And movie goers now stumble in the dark since the laws forbid theatre owners to hire ushers below a certain wage...

The minimum wage in Australia has not experienced any growth in real terms since we had ushers and petrol pump attendants, so it's no more costly now than it was then for employers to offer such services. So why is it then that these jobs no longer exist?

One possible explanation is:

1. People don't value these addtional services hence the they opt for services where the price of the overall service is reduced by foregoing said labour costs etc. That is public value is less than the cost of producing the service.

and

The value people are willing to pay for the service is less than the value someone is willing to perform the service for. Even with the removal of minimum wage controls. Who is going to pump petrol all day for say $1 an hour no-one.

Also something both you an Mr Friedman have skipped over is that minimum wages provide an incentive/requirement for people to increase their skills to level where they are productive enough to contribute at least the value of the minimum wage.

Low-paid employment that doesn't develop skills (e.g. pumping petrol) is a poverty trap. I agree with the ideas of apprenticeships were a lower rate of pay is acceptable due to being offset by training to increase the employees future productivity.

However, if a worker cannot contribute enough value in an hour to justify the minimum wage then he or she needs re-skilling. Rather than have someone leave school early to pursue a job than pays less than the current minimum wage, it is better for the economy to have them stay in school for a few more years and gain the skills to more productive for the rest of their working life.

Capablanca-Fan
25-02-2010, 03:56 PM
Also something both you an Mr Friedman have skipped over is that minimum wages provide an incentive/requirement for people to increase their skills to level where they are productive enough to contribute at least the value of the minimum wage.
Doesn't happen in practice. Rather, young people have a hard time getting jobs where they can best learn their skills.


Low-paid employment that doesn't develop skills (e.g. pumping petrol) is a poverty trap.
But it does develop skills: turning up to work on time, serving customers. The real poverty trap is the minimum wage, forbidding employment of the low-skilled.

I've also pointed out that many very successful people started off in similar alleged poverty traps or "dead-end jobs" such as burger flipping at Maccas.


However, if a worker cannot contribute enough value in an hour to justify the minimum wage then he or she needs re-skilling.
But you Anointed types deny them the best means of re-skilling: working at less than the minimum wage.


Rather than have someone leave school early to pursue a job than pays less than the current minimum wage, it is better for the economy to have them stay in school for a few more years and gain the skills to more productive for the rest of their working life.
How nice if this were to happen. Yet in this case, they could develop their skills better in a job than in useless government schooling.

Leftards always think they can defy laws of economics. In this case: raise the price of something, and you get less of it. This applies to the price of labour as much as anything else.

Spiny Norman
25-02-2010, 04:44 PM
As a former employer, I would take the kid with real world, practical experience over a university qualified person any day of the week.

Desmond
25-02-2010, 08:40 PM
As a former employer, I would take the kid with real world, practical experience over a university qualified person any day of the week.
Me too, although I would have to enquire if the B of Gas Pumping was legit.

Spiny Norman
26-02-2010, 04:49 AM
Me too, although I would have to enquire if the B of Gas Pumping was legit.
I suppose it would depend what sort of degree that Uni person had done too, and what results they had achieved, and so on. Its complicated. Some Uni students work damn hard to get through their course, earn good marks, and have a good work ethic. Its the work ethic that's important, regardless of whether its paid work or study work.

TheJoker
26-02-2010, 09:12 AM
As a former employer, I would take the kid with real world, practical experience over a university qualified person any day of the week.

That a pretty generalised statement, which shows you haven't thought things through. Would you really employ a person for an IT job who has spent their youth pumping petrol over someone with HD average in Computer Science from major University:eh:

TheJoker
26-02-2010, 09:45 AM
Doesn't happen in practice. Rather, young people have a hard time getting jobs where they can best learn their skills.

No you learn more skills in High School than pumping petrol, that's a fact. Pumping petrol isn't going to teach any high level skills



But it does develop skills: turning up to work on time, serving customers. The real poverty trap is the minimum wage, forbidding employment of the low-skilled..

Well we'll have to disagree here because I don't believe those low skilled jobs develop the necessary skills to earn skilled employment. And I should know I left school and had a few including flipping burgers and cleaning a mechanics workshop. And I can seriously say that I didn't learn any of skills necessary for me to get a more highly skilled job. It wasn't until I re-skilled myself, through an apprenticeship and going to University that I developed the skills necessary to fulfil my current role.

I am all for on-the-job training. But pumping petrol is no such thing its a dead end job.


I've also pointed out that many very successful people started off in similar alleged poverty traps or "dead-end jobs" such as burger flipping at Maccas.

Let's get this straight a very few sucessful people start out these jobs. For every sucessful person that started out flipping burgers etc. I bet I could show you 10,000 that are still in low paid employment without any decent skill set.



But you Anointed types deny them the best means of re-skilling: working at less than the minimum wage.

Beacuase it's not the best means unless its a specific program of on-the-job training (e.g. apprenticeships, traineeships etc). You are better of completing year 12 than spending 3 years showing people to their seats at the cinemas.

If you want I can prove it by showing you mean (and median) income levels for those people who received a formal education vs those that haven't.


they could develop their skills better in a job than in useless government schooling.

More unsubstaintiated garbage. Show me some stats that proves that people who leave school early to get a minimum wage job end up earning more in the long-run. Hope you don't practice what you preach and have your kids flipping burgers rather than going to medical or law school:eek:



Leftards always think they can defy laws of economics. In this case: raise the price of something, and you get less of it. This applies to the price of labour as much as anything else.

No-one is trying to say you won't have less labour. But Human Resources are an asset than can be developed. If you invest in developing that asset (education, skills) it will produce more per hour labour. So whilst you might have less labour hours due to a higher cost, those labour hours will be more productive.

If you cannot understand that I suggest you look at countries that put children straight into the workforce rather than educating them first and see what the GDP per capita is compared to those with a highly developed education system that recognises it is best to forego labour until such time as the necessary skills have been developed to ensure that labour meets some minimum productivity standard.

I suggest you re-skill yourself in economic realities;)

TheJoker
26-02-2010, 10:18 AM
Jono what's your opinion on whether its is hard to find a job in Australia, if one is willing to do anything and work for the minimum wage?

I suggest that anyone who cannot find a minimum wage job in this country is either being selective about the type of employment they will accept (e.g. they won't accept a job as a toilet cleaner), or they don't want to work. Or they have some condition that limits the type of employment they can perform.

Spiny Norman
26-02-2010, 05:55 PM
That a pretty generalised statement, which shows you haven't thought things through. Would you really employ a person for an IT job who has spent their youth pumping petrol over someone with HD average in Computer Science from major University:eh:
Don't be such a goose. I would take someone with 12 months (perhaps less) practical IT work experience over someone with 3 years of University IT study any day.

Desmond
26-02-2010, 08:08 PM
I suppose it would depend what sort of degree that Uni person had done too, and what results they had achieved, and so on. Its complicated. Some Uni students work damn hard to get through their course, earn good marks, and have a good work ethic. Its the work ethic that's important, regardless of whether its paid work or study work.
If it's work ethic you want, then neither a degree nor a year of employment will really tell you about it. One can bludge through uni, and one can bludge through a job.

Capablanca-Fan
27-02-2010, 09:35 AM
Well we'll have to disagree here because I don't believe those low skilled jobs develop the necessary skills to earn skilled employment. And I should know I left school and had a few including flipping burgers and cleaning a mechanics workshop. And I can seriously say that I didn't learn any of skills necessary for me to get a more highly skilled job. It wasn't until I re-skilled myself, through an apprenticeship and going to University that I developed the skills necessary to fulfil my current role.
Even your own case supports my point. Even the so-called dead-end jobs teach people good work habits and a general shedding of immaturity. The added maturity can equip people for apprenticeships or university study.


Let's get this straight a very few sucessful people start out these jobs. For every sucessful person that started out flipping burgers etc. I bet I could show you 10,000 that are still in low paid employment without any decent skill set.
I doubt it. Many of the successful people didn't stay burger flippers but became mature-age university students and did well there precisely because of their greater maturity.

Thomas Sowell was one such. Looking back on his early jobs, he says that at the time, he thought his bosses were harsh on his work performance. With mature reflection, he marvels at the patience of his bosses, and how they would have lost money by paying him the minimum wage. Later on he went through the army, then earned a doctorate in economics.


If you cannot understand that I suggest you look at countries that put children straight into the workforce rather than educating them first and see what the GDP per capita is compared to those with a highly developed education system that recognises it is best to forego labour until such time as the necessary skills have been developed to ensure that labour meets some minimum productivity standard.
What is the cause and what is the effect? Just as I explained to your fellow leftard GF, the poverty of Dickensian England was not the fault of the free market, but of low productivity. The things that vastly improved productivity, and life in general, had not been invented. Child labour ended when productivity became high enough that parents no longer needed to send their kids out to work for the family to survive. A country needs high productivity to support a highly developed education system.

Spiny Norman
27-02-2010, 10:00 AM
If it's work ethic you want, then neither a degree nor a year of employment will really tell you about it. One can bludge through uni, and one can bludge through a job.
but you can see from a resume very quickly whether they have worked their way through life (even if just simple part time jobs in/around the industry) vs someone who just has the degree. that's always what I have looked for in a resume ... evidence of work ethic. its evidence that they have tried to find relevant work, vs nothing at all, that I find the most useful thing one can learn about a potential employee. anyway, each to their own ... just keep in mind that a few years back I had a bunch of staff (about 20) some of whom were graduates and some who were not. those who had real world work experience were, for the most part, immediately productive. those who were straight out of Uni took about 2 years before they knew enough to really contribute.

Desmond
27-02-2010, 10:28 AM
but you can see from a resume very quickly whether they have worked their way through lifeGoal post shifting, unless you consider someone at 19 to have made their way through life.


(even if just simple part time jobs in/around the industry) vs someone who just has the degree. that's always what I have looked for in a resume ... evidence of work ethic. its evidence that they have tried to find relevant work, vs nothing at all,You really need to make 3 categories here. Relevant work, irrelevant work, and nothing at all. Someone who wants to be a spftware engineer will most likely be working at maccas through uni rather than getting anything that could even broadly be called relevant. Originally you (or perhaps Jono) seemed to be saying that any work would do but now it's more qualified.


that I find the most useful thing one can learn about a potential employee. anyway, each to their own ... just keep in mind that a few years back I had a bunch of staff (about 20) some of whom were graduates and some who were not. those who had real world work experience were, for the most part, immediately productive. those who were straight out of Uni took about 2 years before they knew enough to really contribute.The problem is that you aren't being specific. Did the one person have a degree in something and the person with real world experience have that experience in the same thing? Eg a person with a 3 year bachelor degree in software engineering vs a working software engineer with 3 years experience (and somehow no degree). I would bet the latter attracts a salary of at least 2-3 times that of the former if not more.

Igor_Goldenberg
27-02-2010, 05:43 PM
Jono what's your opinion on whether its is hard to find a job in Australia, if one is willing to do anything and work for the minimum wage?

I suggest that anyone who cannot find a minimum wage job in this country is either being selective about the type of employment they will accept (e.g. they won't accept a job as a toilet cleaner), or they don't want to work. Or they have some condition that limits the type of employment they can perform.
If I understood correctly you are of the opinion that anyone can obtain a minimum wage job in Australia. Suppose it's true. Then no-one would agree to work for less then minimum wage (why bother if you can get a higher paying job). In this case why do we need minimum wage at all?

Kevin Bonham
27-02-2010, 05:48 PM
If I understood correctly you are of the opinion that anyone can obtain a minimum wage job in Australia. Suppose it's true. Then no-one would agree to work for less then minimum wage (why bother if you can get a higher paying job). In this case why do we need minimum wage at all?

Surely the answer to this is that if wage constraints were removed then employers would offer many presently minimum-wage jobs at even lower wages, and therefore the "higher paying jobs" (compared to less than minimum-wage jobs) would in many cases no longer exist.

Igor_Goldenberg
27-02-2010, 05:58 PM
Surely the answer to this is that if wage constraints were removed then employers would offer many presently minimum-wage jobs at even lower wages, and therefore the "higher paying jobs" (compared to less than minimum-wage jobs) would in many cases no longer exist.
If (according to the post I replied to) we have a full employment then employers would not be able to fill any position at lwage lower then minimum.

Kevin Bonham
27-02-2010, 07:58 PM
If (according to the post I replied to) we have a full employment then employers would not be able to fill any position at lwage lower then minimum.

I think they would, because the current minimum is being held at an artificially high level by legislation rather than by the choices of the labour market.


I suggest that anyone who cannot find a minimum wage job in this country is either being selective about the type of employment they will accept (e.g. they won't accept a job as a toilet cleaner), or they don't want to work. Or they have some condition that limits the type of employment they can perform.

Or they are not very good at looking for work.

Frankly I doubt I could find and successfully get a minimum-wage job in a week.

Igor_Goldenberg
27-02-2010, 08:19 PM
I think they would, because the current minimum is being held at an artificially high level by legislation rather than by the choices of the labour market.


If we had full employment (i.e. everyone who wants to work can find work), then labour market would not let wage drop below current minimum.

Personally I believe that everyone without some mental or physical deficiencies can find work (sometimes it might be casual work at a slightly lower rate).
Unemployment statistics is marred by the fact that many on welfare have cash in hand undeclared (or under-declared) job. I view extremely high EMTR as a much bigger problem. But minimum wages don't help either.

Kevin Bonham
27-02-2010, 09:59 PM
If we had full employment (i.e. everyone who wants to work can find work), then labour market would not let wage drop below current minimum.

Why not? Suppose we abolished the minimum wage and half the employers currently paying minimum wage cut their wages by 20%. What do you think would happen?

As it is there are plenty of people working below minimum wage on sweatshop-type tasks or as self-employees. The minimum wage is not at all difficult to live on if you live in an inexpensive area and do not have a family to support. There are obviously people who would work for less than it.


Unemployment statistics is marred by the fact that many on welfare have cash in hand undeclared (or under-declared) job.

Far bigger problems with unemployment statistics include over-restrictive views of what constitutes being a jobseeker, and classing people as employed even when they are so underemployed that they cannot go near living off the work they are getting alone.

CameronD
27-02-2010, 10:09 PM
If you removed minumin wage and large employers dropped wages by 20%. Massive union strikes would put the economy to a crawl.

Kevin Bonham
27-02-2010, 10:32 PM
If you removed minumin wage and large employers dropped wages by 20%. Massive union strikes would put the economy to a crawl.

Very likely true. Indeed, this would happen if you removed the minimum wage even if the employers did nothing.

Capablanca-Fan
28-02-2010, 12:51 AM
As it is there are plenty of people working below minimum wage on sweatshop-type tasks or as self-employees. The minimum wage is not at all difficult to live on if you live in an inexpensive area and do not have a family to support. There are obviously people who would work for less than it.
True. For all the talk of "living wage", most minimum wage workers don't have to support a family of four.


Very likely true. Indeed, this would happen if you removed the minimum wage even if the employers did nothing.
As Friedman said, the unions pushed for minimum wage laws to prevent competition and drive their own workers' wages up.

Igor_Goldenberg
28-02-2010, 08:28 PM
Why not? Suppose we abolished the minimum wage and half the employers currently paying minimum wage cut their wages by 20%. What do you think would happen?


We are discussing a hypothetical case of full employment (as advocated by The Joker). In this case employers will lose the staff.

In reality,however, genuine job-seekers will find it easier to get a job

Kevin Bonham
28-02-2010, 09:46 PM
We are discussing a hypothetical case of full employment (as advocated by The Joker). In this case employers will lose the staff.

Why? What would those staff do instead?

They might not be able to find other jobs at the minimum wage because with wages reduced, not all those jobs would exist anymore. There would no longer be full employment at the old minimum wage level.

By the way, I support complete abolition of the minimum wage - but only if my proposed reforms to the unemployment welfare system are all accepted.

CameronD
28-02-2010, 10:08 PM
Why? What would those staff do instead?

They might not be able to find other jobs at the minimum wage because with wages reduced, not all those jobs would exist anymore. There would no longer be full employment at the old minimum wage level.

By the way, I support complete abolition of the minimum wage - but only if my proposed reforms to the unemployment welfare system are all accepted.

if there is full employment and wages are dropped, then some people would leave the workforce (people may retire, others may drop extra work, others may start studying fulltime for a better job at government expence, others may live off their savings etc)

Due to the dropped wages in full employment, you now have a situation where businesses have unfullfilled positions resulting in reduced production and profit and some businesses may close due to inability to find workers. Some businesses will raise wages to get staff, while others will operate in a state of stress. Businesses operating in a state of stress will lose more staff as they get disgruntled and either leave the workforce or work somewhere else, the business will spiral out of control.

This will look close to the picture of the future when Australia will have an aging population and an insufficient workforce.

The economy needs some unemployment to allow for the peak of the cycle, otherwise the country wont reach its potential during the good times due to insufficient workers.

Kevin Bonham
28-02-2010, 10:33 PM
if there is full employment and wages are dropped, then some people would leave the workforce (people may retire, others may drop extra work, others may start studying fulltime for a better job at government expence, others may live off their savings etc)

Many of those would be doing so already as an alternative to looking for and then if successful doing a minimum wage job. I think the number leaving the workforce in these ways as a result of the drop would be very small.

It's all very theoretical because I don't believe we are within a country mile of "full employment".

TheJoker
01-03-2010, 09:42 AM
Even your own case supports my point. Even the so-called dead-end jobs teach people good work habits and a general shedding of immaturity. The added maturity can equip people for apprenticeships or university study.

No it doesn't... I used those jobs as a filler whilst I was pursuing sporting goals. The jobs provided almost nothing in the way of new skills. The only thing they can do is provide a reference in regards to your work ethic.


I doubt it. Many of the successful people didn't stay burger flippers but became mature-age university students and did well there precisely because of their greater maturity.

I suspect there are very few mature-age undergraduate students. Perhaps some of the forum members who work at a Uni could offer a better perspective.


A country needs high productivity to support a highly developed education system.

And just as importantly vice versa.

Garrett
01-03-2010, 09:48 AM
I suspect there are very few mature-age undergraduate students. Perhaps some of the forum members who work at a Uni could offer a better perspective.


A simple SQL query would answer that. I'll ask my boss if I can write a quickie.

What do you define as 'mature age' ? (21 +?).

Are there any undergraduate degrees you would like to exclude ?

cheers
Garrett.

Kevin Bonham
01-03-2010, 10:44 AM
I suspect there are very few mature-age undergraduate students. Perhaps some of the forum members who work at a Uni could offer a better perspective.

No shortage of them when I was doing Arts in the early-mid 90s. Then again Tasmania may have been a special case around that time.

TheJoker
01-03-2010, 10:56 AM
A simple SQL query would answer that. I'll ask my boss if I can write a quickie.

What do you define as 'mature age' ? (21 +?).

Are there any undergraduate degrees you would like to exclude ?

cheers
Garrett.

Hi Garrett

That would be interesting. Any chance you could exclude international students. I guess 21+ is probably fair. Here is USYD eligibility:

You are eligible to apply for the Mature-age Entry Scheme if:

*you are 21 years of age
*you do not have the required UAI for admission to any course;
*you do not have a record of tertiary study; and
*you have completed an approved preparation course.

Desmond
01-03-2010, 11:18 AM
I think my course was about 50-50 school leavers vs non school leavers. Of course that is a slightly different measure than the 21+ given above.

Kevin Bonham
01-03-2010, 11:20 AM
Wouldn't there be plenty of mature-age students who didn't need to get in under the mature-age-specific schemes because they had adequate entry qualifications anyway?

Capablanca-Fan
01-03-2010, 11:30 AM
No it doesn't... I used those jobs as a filler whilst I was pursuing sporting goals. The jobs provided almost nothing in the way of new skills. The only thing they can do is provide a reference in regards to your work ethic.
And that should not be underestimated. Just shedding immaturity, keeping to a schedule, and working with others are skills that school leavers often don't have.

Government work programs, whether Labor or the one touted by Abbott, are no-where near as good. Working for someone who has to hire you is hardly good training to work for someone who doesn't.

Garrett
01-03-2010, 11:43 AM
Hi Garrett

That would be interesting. Any chance you could exclude international students. I guess 21+ is probably fair. Here is USYD eligibility:

You are eligible to apply for the Mature-age Entry Scheme if:

*you are 21 years of age
*you do not have the required UAI for admission to any course;
*you do not have a record of tertiary study; and
*you have completed an approved preparation course.

okay a manager here said it was okay to give a percentage. This sort of information is probably in the public domain anyway.

The figure you are looking for is 16.78 %, almost exactly one sixth of new (Sem 1, 2010) Undergrad students born in Oz were born before 1st March 1989.

TheJoker
01-03-2010, 11:44 AM
And that should not be underestimated. Just shedding immaturity, keeping to a schedule, and working with others are skills that school leavers often don't have.

If 10 years of complusory schooling can't generate students capable of being productive enough to justify the minimum wage then we should re-examine the education system.

Igor_Goldenberg
01-03-2010, 01:02 PM
If 10 years of complusory schooling can't generate students capable of being productive enough to justify the minimum wage then we should re-examine the education system.
If they are productive enough for a minimum wage, why do you need a minimum wage?

Capablanca-Fan
01-03-2010, 02:10 PM
If 10 years of complusory schooling can't generate students capable of being productive enough to justify the minimum wage then we should re-examine the education system.
You're not wrong. But one thing at a time. Government is the problem with the school system just as it is with imposing minimum wage and hour laws.

TheJoker
01-03-2010, 02:32 PM
If they are productive enough for a minimum wage, why do you need a minimum wage?

To provide an incentive for those that aren't to re-skill.

Capablanca-Fan
01-03-2010, 02:53 PM
To provide an incentive for those that aren't to re-skill.
Hasn't worked in practice. When Thomas Sowell first entered the work force, inflation resulted in the minimum wage ceasing to be an economic reality. He admits that his first jobs were excellent training, just in basic work habits rather than special skills. Now he wonders how his boss put up with his incompetence, and says that there's no way that his boss could have afforded to pay him the equivalent of today's minimum wage.

This was a time when racism and discrimination were much higher, but black unemployment was no worse than white. Even in the recession year of 1949, black teen unemployment was not as low as it is now.

But now, minimum wage laws have eliminated these "dead-end" jobs which are really the first steps on the employment ladder. Further, these laws were expanded so there was "no place to hide" for low-skilled workers whose productivity could not command the government-mandated wage. And of course, there are alternatives such as welfare. No wonder Milton Friedman, one of Sowell's mentors, said that minimum wage laws were the most anti-black laws on the books.

In fact, Sowell wrote all this in 1978 to Senator Bill Proxmire, and his response was one of the few times where Sowell thought that explaining things to a politician was worthwhile.

TheJoker
01-03-2010, 02:54 PM
Interestingly enoug there have been a few studies on the effect of the minimum wage on unemployment since it was implemented in the UK in 1999. It hasn't had a significant effect on unemployment.

Igor_Goldenberg
01-03-2010, 04:09 PM
Interestingly enoug there have been a few studies on the effect of the minimum wage on unemployment since it was implemented in the UK in 1999. It hasn't had a significant effect on unemployment.
A popular joke in USSR in ą9ū0s was:
"What happens if we build communism in Sahara desert"?
"First fifty years - nothing. Then we'll have shortage of sand"
I don't think ten years will cause much difference if minimum wage is set on a level where market would put it.

TheJoker
02-03-2010, 09:48 AM
Hasn't worked in practice. When Thomas Sowell first entered the work force, inflation resulted in the minimum wage ceasing to be an economic reality. He admits that his first jobs were excellent training, just in basic work habits rather than special skills. Now he wonders how his boss put up with his incompetence, and says that there's no way that his boss could have afforded to pay him the equivalent of today's minimum wage.

Yet Sowell seemed to realise those jobs weren't leading anywhere and he needed to get an education. I might argue that he has been counter-productive ever since, but that's a matter of personal opinion;)

I believe in most cases if an employer is offering an approved training program (eg. traineeship) they can payless than the minimum wage.

Capablanca-Fan
02-03-2010, 10:13 AM
Yet Sowell seemed to realise those jobs weren't leading anywhere and he needed to get an education.
Then you have missed his point. The point of these jobs was not to "lead anywhere" but to gain the basic work skills that later equipped him for education.


I might argue that he has been counter-productive ever since, but that's a matter of personal opinion;)
By puncturing the conceits of the Left, and analysing all policies in terms of incentives rather than goals? Or by showing that black race-baiters don't speak for all blacks, and actually hurt those they claim to support?


I believe in most cases if an employer is offering an approved training program (eg. traineeship) they can payless than the minimum wage.
As it should be, but it shouldn't be a matter of an exemption—the law is bad in the first place.

TheJoker
02-03-2010, 10:14 AM
A popular joke in USSR in ą9ū0s was:
"What happens if we build communism in Sahara desert"?
"First fifty years - nothing. Then we'll have shortage of sand"
I don't think ten years will cause much difference if minimum wage is set on a level where market would put it.

I believe the minimum wage was higher than what 1.4 million employees were currently being paid. So I wouldn't call that at a level where the market would set it. Most longditudinal studies on minimum wage so that it has minimal effects on unemployment. I believe the same goes for increased labour flexibility. However, this may be changing as we move into a more globalised market, where businesses need to compete not only on a level national playing field but also against businesses in other countries with different employment relations systems.

I don't suspect removal of the minimum wage in Australia would allows us to compete against say China in manufacturing, due to the developed state of our economy, demographics and the increased cost of living.

TheJoker
02-03-2010, 10:48 AM
Then you have missed his point. The point of these jobs was not to "lead anywhere" but to gain the basic work skills that later equipped him for education.

Again it is matter of opinion on whether these type of jobs provide worthwhile skills that can lead to a more productive citizen. I would have a guess that people who forego low paid employment in favour of education end up more productive on avergage than those that opt to forego education in favour of low paid employment. Because education provides skills at a faster rate



By puncturing the conceits of the Left, and analysing all policies in terms of incentives rather than goals? Or by showing that black race-baiters don't speak for all blacks, and actually hurt those they claim to support?.

No for psuedo-scholarship that involves being extremely selective about the evidence analysed so that his conclusions support his ideology rather than reflect the reality. Not that this is uncommon in academia in fact it is often "par for the course".



As it should be, but it shouldn't be a matter of an exemption—the law is bad in the first place.

Based on what evidence? You evaluation of the law is based on your ideology not on any hard evidence.

Capablanca-Fan
02-03-2010, 11:23 AM
Again it is matter of opinion on whether these type of jobs provide worthwhile skills that can lead to a more productive citizen. I would have a guess that people who forego low paid employment in favour of education end up more productive on avergage than those that opt to forego education in favour of low paid employment. Because education provides skills at a faster rate
And with the general work skills of just having a job, many people are better equipped for the discipline of education, like Sowell, and yourself although you won't admit it.


No for psuedo-scholarship that involves being extremely selective about the evidence analysed
Quite the opposite. Racial demagogues often used raw stats to assert "discrimination", esp. by whites against blacks. Yet his worldwide research shows that disparity among different people groups is the norm, not an exception.

Also, the Carter–Clinton "Community Reinvestment Act", largely responsible for the financial crisis, was supported by selective evidence that banks were approving blacks at a lower rate than whites. Yet Sowell showed: 1. the default rates were almost identical, showing that the banks' criteria were economically rational (e.g. not just income but assets and credit history); 2. Asians are approved at a higher rate than Whites, but no one would be crass enough to claim that banks were discriminating against whites in favour of Asians. This is a reductio ad absurdum of the Leftard claim that differences between people groups entail racial discrimination.

Yet another example of the opposite of what you claim is his worldwide research showing the disastrous effects of affirmative action. He opposes AA for moral reasons: he is old enough to remember being discriminated against because of his race, so damned if he is going to support it against someone else—the discrimination against him was wrong in itself, not just a question of whose ox is gored. But AA's defenders claim that the good outweights this, so he also decided to test this empirically. Yet everywhere around the world, the same patterns were repeated: the benefits went to those in the preferred group who were already well off, yet all within that group were resented for benefits few of them enjoyed; the ones hurt were the poorest in the disfavoured group, the promoters of AA in that group were not paying any price; favoured group people would become front men for companies run by the other group, so they would receive government largesse; overall performance in both groups dropped: why should the preferred group work hard if they have guaranteed goodies, and why should the other group try when they might be passed over on racial grounds?


so that his conclusions support his ideology rather than reflect the reality.
Au contraire, he started off as a Marxist, and the real world repeatedly refused to support leftist claims. He also saw first-hand how incentives of bureaucrats often led them to work against the real public interest. See Sowell's interview in Salon (1999) (http://www.salon.com/books/int/1999/11/10/sowell/index.html).


Based on what evidence? You evaluation of the law is based on your ideology not on any hard evidence.
My ideology is based on hard evidence. Economically: you make something more expensive, and fewer people will buy it. This applies to the cost of labour as well. Historically: Sowell's analysis of black v white unemployment over the decades—blacks had fuller employment in times of more racism and discrimination, but no welfare alternatives and no minimum wage laws (for all practical purposes) that priced low-skilled labour off the market. Also, Sowell saw first hand how minimum wage laws increased unemployment in Puerto Rico in his early days, and this was one factor in his abandonment of leftism.

TheJoker
02-03-2010, 11:57 AM
Also, the Carter–Clinton "Community Reinvestment Act", largely responsible for the financial crisis.

Not wanting to turn this inot another Sowell thread, but that is the particular conclusion that is based on extremely selective evidence, including ignoring the opinions of the people at the heart of the crisis.


My ideology is based on hard evidence. Economically

Ah no its not, its basics on an old Econ 101 textbook, there is a great deal of empirical evidence that shows that minimum wage laws do not have a a negative effect on unemployment.

The reason is probably that businesses and employees adapt to market conditions (i.e. they are forced to become more productive).

Capablanca-Fan
02-03-2010, 12:39 PM
Not wanting to turn this inot another Sowell thread, but that is the particular conclusion that is based on extremely selective evidence, including ignoring the opinions of the people at the heart of the crisis.
His book on the housing crisis analyses those closest to the heart. The CRA was largely responsible, as were politicians protecting Fannie and Freddie from scrutiny (mostly Dems but some GOPs as well), politicians of both stripes pushing home-ownership as a goal and ignoring the costs.


Ah no its not, its basics on an old Econ 101 textbook, there is a great deal of empirical evidence that shows that minimum wage laws do not have a a negative effect on unemployment.
This goes counter to what Sowell discovered in Puerto Rico, and his own experience and analysis of decades of black employment data.


The reason is probably that businesses and employees adapt to market conditions (i.e. they are forced to become more productive).
Yes, by buying less of whatever costs more, including labour.

TheJoker
02-03-2010, 02:57 PM
His book on the housing crisis analyses those closest to the heart. The CRA was largely responsible, as were politicians protecting Fannie and Freddie from scrutiny (mostly Dems but some GOPs as well), politicians of both stripes pushing home-ownership as a goal and ignoring the costs.

If you forget about the fact that most defaulting loans were not issued under CRA jurisdiction. Forget that the process of securitisation came from the finance industry not government. Forget that it was market demand for mortage securities that was the driver behind the explosion of sub-prime loans. Forget that the private independent credit rating agencies provided an incorrect assessment of the securities risk, which is what fuelled that demand. Forget that mortage sellers taking risky loans not because they were forced too, but because the market incorrectly assumed that risk was diversifiable through securitisation and therefore had an apetite for risky mortage securities. I agree if we simply forget all of that, we can blame the whole thing squarely on the government as Sowell does, instead of realising they played a very small part in contributing to the crisis.


This goes counter to what Sowell discovered in Puerto Rico, and his own experience and analysis of decades of black employment data.

You need to look beyond Sowell, the guy hasn't been published in an academic journal since the 1970's. If you would like I can suggest some more appropriate authors



Yes, by buying less of whatever costs more, including labour.

I think you'll find that the demand for labour in Australia is fairly inelastic therefore companies are likely to find ways to produce more with the existing labour or pass on the cost to customers or shareholders.

The evidence from the UK shows that businesses tend to chose later option (reducing shareholder returns) over reducing labour.

Capablanca-Fan
02-03-2010, 03:09 PM
If you forget about the fact that most defaulting loans were not issued under CRA jurisdiction. Forget that the process of securitisation came from the finance industry not government. Forget that it was market demand for mortage securities that was the driver behind the explosion of sub-prime loans. Forget that the private independent credit rating agencies provided an incorrect assessment of the securities risk, which is what fuelled that demand. Forget that mortage sellers taking risky loans not because they were forced too, but because the market incorrectly assumed that risk was diversifiable through securitisation and therefore had an apetite for risky mortage securities. I agree if we simply forget all of that, we can blame the whole thing squarely on the government as Sowell does, instead of realising they played a very small part in contributing to the crisis.
You need to read what he actually says in his book. The government was the driver of encouraging risky loans in the first place: the CRI and the "American Dream" of home-ownership. And in places, government polices of restricting land use drove house prices up. Of course, when there is lots of government money available, naturally other lenders want a piece of the action, and they thought they were guaranteed by Fannie and Freddie.

And of course, the real reason that such government incentives were flawed, just like KRudd’s insulation scheme and all his other mad-rushed and impulsive Spendulus pork? Milton Friedman explains on the video The 4 Ways to Spend Money: the worst of the four ways is when you spend someone else’s money on someone else: there is no incentive either to get best value or to economize on the cost.

5RDMdc5r5z8


You need to look beyond Sowell, the guy hasn't been published in an academic journal since the 1970's. If you would like I can suggest some more appropriate authors
Who gives a monkey's? His books have been praised by leaders. E.g. Knowledge and Decisions was praised by two existing Nobel laureates in economics, Friedrich Hayek and Milton Friedman; and by one future laureate, James Buchanan. His research on affirmative action around the world (http://www.hoover.org/publications/digest/3010426.html) was groundbreaking as a purely empirical study of its results. The Economist review of the book (http://www.amazon.com/Affirmative-Action-Around-World-Empirical/dp/0300101996)said: “A delight: terse, well-argued, and utterly convincing.”


I think you'll find that the demand for labour in Australia is fairly inelastic therefore companies are likely to find ways to produce more with the existing labour or pass on the cost to customers or shareholders.
I.e. making the community poorer overall.


The evidence from the UK shows that businesses tend to chose later option (reducing shareholder returns) over reducing labour.
And this has consequences of reducing incentives to invest, which down the track means fewer jobs.

TheJoker
02-03-2010, 04:19 PM
You need to read what he actually says in his book. The government was the driver of encouraging risky loans in the first place: the CRI and the "American Dream" of home-ownership.

Except both were in place for decades it wasn't until the finance industry came up with the idea of securitisation and lobbied the government to allow CRA loans to be securitised that the problem started. Even Clinton admits he made a mistake when he allowed the industry to talk him into allowing derivatives for CRA loans.


Who gives a monkey's?

Anyone who was serious about understanding the real world impacts of minimum wage laws... that's obviously not you. You might also want to be aware of the fact that Sowell only claims to have had an idea about empricially testing the link between minimum wage laws and unemployment in the sugar industry, as far as I know the government department he was working for never let him pursue the matter. So he never did find out. If I am wrong and he has published the "study" can you point out where I might find it


I.e. making the community poorer overall.

No if you transfer money from shareholders returns to wages it does not make the community poorer it is simply a redistribution. Technically speaking in the short term the community is likely to be wealthier since its almost certain that the employees are from the community, whereas the investors could come from anywhere. In the long run you might get less invest because of lower returns, or more because increased local consumer demand.



And this has consequences of reducing incentives to invest.
It also stimulates local demand because low income earners tend to be consumers rather than savers. There are a plethora of trade-offs that occur. I wouldn't venture so far as to say that minimum wage laws are a good or a bad idea. It probably depends on the context, the minimum wage level that is set etc. What I can say is haven't seen a convincing argument as to why we should alter the status quo. The only argument put forward centres around the theory that minimum wage laws have a negative effect on employment, as far as I am aware the empirical evidence shows that no such relationship exists.

Igor_Goldenberg
02-03-2010, 04:29 PM
Except both were in place for decades it wasn't until the finance industry came up with the idea of securitisation and lobbied the government to allow CRA loans to be securitised that the problem started. Even Clinton admits he made a mistake when he allowed the industry to talk him into allowing derivatives for CRA loans.

So you agree that crisis largely caused by securitazation of CRA loans?
Would it be possible if US government did not essentially guarantee then?

TheJoker
02-03-2010, 04:49 PM
So you agree that crisis largely caused by securitazation of CRA loans?

Not largely but partly.

The wiki article is actually a good rundown of all contributors to crisis

http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Causes


Would it be possible if US government did not essentially guarantee then?

I have no idea how much government involvment influenced the rating agencies in giving good credit ratings to mortage backed securities.

Capablanca-Fan
02-03-2010, 04:49 PM
Anyone who was serious about understanding the real world impacts of minimum wage laws... that's obviously not you.
It is, hence the historical data about black unemployment. Leftards usually blame racism, but unemployment was lower decades ago when racism was higher.


You might also want to be aware of the fact that Sowell only claims to have had an idea about empricially testing the link between minimum wage laws and unemployment in the sugar industry, as far as I know the government department he was working for never let him pursue the matter. So he never did find out. If I am wrong and he has published the "study" can you point out where I might find it
It seems not to bother you that the bureaucrats were not even interested, since such a study might explode their leftard theories. That's typical of the Left: their dogmas are not allowed to be challenged, e.g. "leftists are more compassionate (http://www.jewishworldreview.com/cols/sowell112806.php3)", "the debate on global warming is over".


No if you transfer money from shareholders returns to wages it does not make the community poorer it is simply a redistribution.
Not so: the shareholders are the owners of the company. And without an expectation of a good return, future investment diminishes, and thus job prospects.


What I can say is haven't seen a convincing argument as to why we should alter the status quo. The only argument put forward centres around the theory that minimum wage laws have a negative effect on employment, as far as I am aware the empirical evidence shows that no such relationship exists.
Only because you ignore the historical trends, and the common sense economics that making something more expensive means that less is demanded.

TheJoker
02-03-2010, 05:28 PM
It seems not to bother you that the bureaucrats were not even interested, since such a study might explode their leftard theories. That's typical of the Left: their dogmas are not allowed to be challenged.

Shifting the goal posts. You're hard evidence against minimum wage laws is based on study that never happended:eek:

Just like you are uninterested in reading proper economic or scientific journals that might explode your theories.



Not so: the shareholders are the owners of the company. And without an expectation of a good return, future investment diminishes, and thus job prospects.

Not if the increased wages results in increased consumer demand which creates investment opportunites. Hence the overall effects can be predicted by theory since the minimum wage is likely to create opossing economic forces (i.e. increased demand and lower ROI).



Only because you ignore the historical trends, and the common sense economics that making something more expensive means that less is demanded.

See my point above. Labour demand is not exclusively a function of the price of labour but also a function of consumer demand etc. The law of demand only holds true ceterus paribus (all other things being equal) its easy to overlook that. That's why empirical evidence is better than model predictions.

Igor_Goldenberg
03-03-2010, 08:22 AM
I have no idea how much government involvment influenced the rating agencies in giving good credit ratings to mortage backed securities.
Do you agree that government guarantee (in form of Fannie Mae etc.) pushes their rating upwards?

Igor_Goldenberg
03-03-2010, 08:36 AM
The wiki article is actually a good rundown of all contributors to crisis

http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Causes
It's not

TheJoker
03-03-2010, 10:53 AM
It's not

Ok then what's it lacking in your expert opinion:rolleyes:

BTW did you read each sub heading?

TheJoker
03-03-2010, 11:26 AM
Do you agree that government guarantee (in form of Fannie Mae etc.) pushes their rating upwards?

No doubt some investors and ratings agencies assumed that government involvement implies some sort of government guarantee. Another false assumption that caused the high rating of MBS was that house prices could never decline, meaning that the security would always be backed an asset that would allow the owners to recover the initial investment.

Certainly government played a role is crisis, but this attempt to claim that the government interference in the market is soley responsible is just as stupid as claiming the market was soley responsible

Igor_Goldenberg
03-03-2010, 02:48 PM
Certainly government played a role is crisis, but this attempt to claim that the government interference in the market is soley responsible is just as stupid as claiming the market was soley responsible

I can only agree with the second part of the statement.
Without government interference the magnitude of the crisis (assuming it would've happened in the first place) would many times smaller.

Even existing crisis would've been history by now was it not for huge bailouts (especially in US). Btw, those bailouts retrospectively justified inflated ratings. No doubts inevitability of bailout was taken into accounts when issuing ratings for mortgage securities.

In short: government interference disabled market self correction. As a result small problem (which would've been corrected by a very modest fall in both sharemarket and real estate) became big problem. After reckless stimulus it became huge problem.

TheJoker
03-03-2010, 10:33 PM
I can only agree with the second part of the statement.
Without government interference the magnitude of the crisis (assuming it would've happened in the first place) would many times smaller.

Even existing crisis would've been history by now was it not for huge bailouts (especially in US). Btw, those bailouts retrospectively justified inflated ratings. No doubts inevitability of bailout was taken into accounts when issuing ratings for mortgage securities.

In short: government interference disabled market self correction. As a result small problem (which would've been corrected by a very modest fall in both sharemarket and real estate) became big problem. After reckless stimulus it became huge problem.

More assertations based on nothing but ideology... Not surprising...Par for the course really

Igor_Goldenberg
04-03-2010, 08:13 AM
More assertations based on nothing but ideology... Not surprising...Par for the course really
Thanks for the constructive input to the debate.

Capablanca-Fan
04-03-2010, 10:32 AM
Government’s attack on small business could cost Rudd the election (http://www.smartcompany.com.au/politics/20100303-government-s-attack-on-small-business-could-cost-rudd-the-election-gottliesen.html)
Robert Gottliebsen
03 March 2010


One man has the potential to single handedly make Tony Abbott Prime Minister of Australia — Assistant Treasurer Nick Sherry.

Sherry appears to be concocting one of the biggest attacks ever mounted on the small business community by a government minister in direct violation of solemn promises made by Kevin Rudd’s ALP at the last election…

In a nutshell, what happened was the Board of Taxation came up with a series of outrageous recommendations and Sherry ... gave them his blessing… So here are just a few of the ideas that Sherry now has on his agenda.

Each plumber or computer consultant in Australia will need to differentiate between their income from capital (spanners, shovels and computers) and their income from labour (digging the ditches and writing software).

Under the Sherry-blessed plan, part of the income derived from labour would be attributed to the person who supplied the labour and those people would be treated as employees — not business people. The income earned on capital could be returned to the owner(s) of the capital, which may differ from the person who provided the labour. Have you ever heard of anything more stupid? But the Sherry-blessed plan gets worse.

The plumber and computer person must make an annual report to the ATO so that the ATO can match data to see how many clients they have had in a year. If more than 80 per cent of the business income came from one group then whammo! You are an employee.

And once the plumber and computer consultant are deemed to be employees, all their business deductions will be looked at in a different light… And, oh yes, every business must have two employees to be a business.

...

Both the coalition and ALP research shows that small business people tend to congregate in marginal seats. In the last election they were not under attack from either party and voted on other issues. But in 2010, once Tony Abbott explains to them what Nick Sherry has put on his agenda they will vote almost as one.

The latest statistics show that 212,000 of the small business people Sherry is targeting live in 20 marginal electorates and they will each influence two or three more voters – at least. The 212,000 business people in Sherry's sites vote in Bass (Tas); Bennelong (NSW); Bowman (Qld); Braddon (Tas); Corangamite (Vic); Cowper (NSW); Deakin (Vic); Dickson (Qld); Flynn (Qld); Hasluck (WA); Herbert (Qld); LaTrobe (Vic); Macarthur (NSW); McEwen (Vic); Paterson (NSW); Robertson (NSW); Solomon (NT); Stirling (WA); Sturt (SA); and Swan (WA). The coalition will soon know how many Sherry targets are in each electorate.

Never mind that last month Tanner vowed a new assault on red tape on businesss.

TheJoker
04-03-2010, 10:44 AM
Thanks for the constructive input to the debate.

You're welcome. If you want want further information, based on actual research rather than political ideology, I suggest you visit your local library and read some of the expert journals. There are a wide variety of articles on the GFC

Igor_Goldenberg
04-03-2010, 11:00 AM
You're welcome. If you want want further information, based on actual research rather than political ideology, I suggest you visit your local library and read some of the expert journals. There are a wide variety of articles on the GFC
You are free to refer (and substantiate!) any of them. I'll be waiting.

TheJoker
04-03-2010, 12:00 PM
You are free to refer (and substantiate!) any of them. I'll be waiting.

My personal opinion would not substantiate any article (not being an expert economist). The articles are substaintiated by the fact that they have been published in highly regarded economic journals. Which certainly accounts for more than any endorsement anyone on this forum could offer.

Here is one to kick you off from "American Economic Review"

https://www.tinbergen.nl/ti-events/tilectures2009/diamond.pdf

And a few more for your reference:

Crotty, James. Cambridge Journal of Economics, Jul2009, Vol. 33 Issue 4, p563-580, 18p

Blundell-Wignall, Adrian; Atkinson, Paul. Journal of Asian Economics, Sep2009, Vol. 20 Issue 5, p536-548, 13p

Melvin, Michael; Taylor, Mark P.. Journal of International Money & Finance, Dec2009, Vol. 28 Issue 8, p1243-1245, 3p

Blankenburg, Stephanie; Palma, José Gabriel. Cambridge Journal of Economics, Jul2009, Vol. 33 Issue 4, p531-538, 8p

Financial Management (14719185), Jul/Aug2009, p20-21, 2p

These will require you to actually find the articles yourself as they are not freely available AFAIK

Desmond
04-03-2010, 12:30 PM
Government’s attack on small business could cost Rudd the election (http://www.smartcompany.com.au/politics/20100303-government-s-attack-on-small-business-could-cost-rudd-the-election-gottliesen.html)
Robert Gottliebsen
03 March 2010Sounds pretty silly. Why do they even want to do this?

Igor_Goldenberg
04-03-2010, 01:23 PM
My personal opinion would not substantiate any article (not being an expert economist).

Do I take it as you not having anything to contribute to the debate?

Desmond
04-03-2010, 01:45 PM
Do I take it as you not having anything to contribute to the debate?
You asked him for references. :hmm:

Igor_Goldenberg
04-03-2010, 01:51 PM
You asked him for references. :hmm:
And for contribution. I prefer not to rely on experts opinion, nor disregards someone opinion merely because it's not supported by experts.
The Joker invoked "the experts say" line instead of providing arguments. I simply called him on it.

Desmond
04-03-2010, 01:55 PM
And for contribution. I prefer not to rely on experts opinion, nor disregards someone opinion merely because it's not supported by experts.
The Joker invoked "the experts say" line instead of providing arguments. I simply called him on it.
I think he's made plenty of posts on this thread, but meh I'll let him speak for himself.

TheJoker
04-03-2010, 01:59 PM
Do I take it as you not having anything to contribute to the debate?

Take it anyway you like, but my last post contributed far more to the debate than all your posts combined.

Perhaps you might want o provide evidence for the following claims you've made:

1. Without government interference the magnitude of the crisis (assuming it would've happened in the first place) would many times smaller.

2. Even existing crisis would've been history by now was it not for huge bailouts

3.bailouts retrospectively justified inflated ratings.

4. inevitability of bailout was taken into accounts when issuing ratings for mortgage securities.

5. government interference disabled market self correction. As a result small problem (which would've been corrected by a very modest fall in both sharemarket and real estate) became big problem. After reckless stimulus it became huge problem.

I'll provide a couple of quick replies:

1. Pure speculation, I could just as easily assert the opposite that with proper government regulation the crisis would have been averted (as many have)

2. Based on what evidence

3. I can't imagine considering the money lost MBS even with the bailouts that a AAA credit rating could possibly be justified. Perhaps you might like to compare its performance (including bailout money) for me with other AAA credit rated securities

4. What evidence show with "no doubts" that ratings agency took into account government bailouts when rating the securities.

5. Again based on what evidence.

TheJoker
04-03-2010, 02:21 PM
And for contribution.

No you asked me to substantiate the articles. That's a totally different thing. I think its for the articles to substantiate themselves. And the reputation of the journals for producing quality, adds weight to arguement provided in the article itself.


The Joker invoked "the experts say" line instead of providing arguments. I simply called him on it.

The arguments are in the articles:doh: Try reading them.:rolleyes:

TheJoker
04-03-2010, 02:52 PM
I prefer not to rely on experts opinion, nor disregards someone opinion merely because it's not supported by experts.


Off course not, but certainly one is more likely to heed an experts opinion over that of a "quack"

You don't go to your local check-out chick for medical advice.

Igor_Goldenberg
04-03-2010, 10:26 PM
1. Without government interference the magnitude of the crisis (assuming it would've happened in the first place) would many times smaller.


CRA encouraged irresponsible lending. Guarantee of mortgages by FNMA and FHLMC made them look less risky.



2. Even existing crisis would've been history by now was it not for huge bailouts

Mortgage securities crisis of 2007 became GFC of 2008 after bailouts.
GFC of 2008 became recession in 2009 after stimulus packages around the world.


3.bailouts retrospectively justified inflated ratings.

Everybody in USA were sure that if something goes wrong government would bail them out. It did. So the mortgages turned out to be not as risky as normally were.



4. inevitability of bailout was taken into accounts when issuing ratings for mortgage securities.

see above



5. government interference disabled market self correction. As a result small problem (which would've been corrected by a very modest fall in both sharemarket and real estate) became big problem. After reckless stimulus it became huge problem.


Irresponsible lending, as well as unsound securitization of mortgages, could happen under any circumstances. In an open market it's quickly resolved by losses of reckless lenders and falling prices of mortgage security. Support provided by FNMA and FHLMC concealed the problem for a long time, allowing it to develop into a huge crisis.
Personally I even doubt those securities would've made to the market weren't it for Fannie/Freddie support.

Igor_Goldenberg
04-03-2010, 10:28 PM
I think he's made plenty of posts on this thread, but meh I'll let him speak for himself.
He did, but when presented with counter-arguments replied with shallow line:

More assertations based on nothing but ideology... Not surprising...Par for the course really
When called on it tried to dodge the issue.

Desmond
05-03-2010, 08:33 AM
He did, but when presented with counter-arguments replied with shallow line:

When called on it tried to dodge the issue.
Actually I think the shallowest counter-argument on this thread just lately was your "It's not."

TheJoker
05-03-2010, 10:53 AM
CRA encouraged irresponsible lending..

Yet most of the defaults came from loans issued outside the CRA, which shows that the market had an appetite for risky lending. Legislation wasn't forcing anyone, people were making sub-prime loans without being required to do so. Therefore this arguement doesn't hold much water. If you wanted to argue that F and F were buying or gauranteeing these mortages and therefore increasing the demand and that lenders were responding to that demand I'd agree.


Guarantee of mortgages by FNMA and FHLMC made them look less risky.

Guaranteed mortages are different to MBS. It terms of rating MBS there is no relationship.

Also they weren't the only issuers of MBS, and yet there were plenty of MBS issued by other investment banks that had a AAA rating. Therefore the idea that the AAA rating was based on government involvement seems unlikely.


Mortgage securities crisis of 2007 became GFC of 2008 after bailouts.
GFC of 2008 became recession in 2009 after stimulus packages around the world..

Just because events follow one another doesn't imply causation. If that the extent of your analysis its a pretty flimsy argument. The reason the Mortage security crisis had a global impact was a number of complicated financial instruments such CDS meant the liability for the toxic assets were distributed around the globe partically in the financial sector.

The recession was due a number of things that was risk averse banks who wouldn't issue credit, a large part of US consumption had previosuly been fuelled by easy access to credit such as drawing on the equity of the family home. Business realised consumers would have easy access to credit therefore demand would fall hence they cut-back output. Moreover small businesses that often relied on short-term credit were not able to access facilities such as overdrafts meaning the also had to reduce output. Reductions in output mean recession. Global trade and US being the largest economy generally means when the US goes into recession the rest of the world follws that trend.


Everybody in USA were sure that if something goes wrong government would bail them out. It did. So the mortgages turned out to be not as risky as normally were..

Even taking into account "moral hazard" the MBS certainly turned out to be more risky than other AAA rated securities. If you are trying say the AAA was correct you'll end up looking pretty foolish. Have you considered the much larger incentive for the AAA rating, which was that the investment banks issuing the securities were paying the "independent" rating agencies to rate their products. The amount of money involved was huge a poor rating could jeopardise future business form that investment bank which could have been detrimental to the rating agency's bottom line. It was a massive conflict of interest.



Irresponsible lending, as well as unsound securitization of mortgages, could happen under any circumstances. In an open market it's quickly resolved by losses of reckless lenders and falling prices of mortgage security..

Actually the problem was that most of the bad mortages were adjustable rate mortages (even negative amortisation:eek: ) which meant that the securities looked to performing well with a low rate of default until the higher interest rates kicked in usually 2 years later. Because only the originator of the mortage, often a mortage broker, had information on the real risk of default after the interest rate reset and that it was in his interest not to disclose that risk. The market was clueless as to actual risk profile of the borrowers.



Support provided by FNMA and FHLMC concealed the problem for a long time, allowing it to develop into a huge crisis.

No doubt that the failure to disclose information to the market from the whole 'shadow banking' sector helped deepen the crisis.

Also I will agree is that Fannie/Freddie were under capitalised which signalled to the market that management felt that they had indirect access to government capital, or that they saw little risk in the mortage market. This allowed them to adopt a higher risk profile than investors would generally accept. However the lack of capitalisation wasn't unique to Fannie and Freddie. Whether the weak capital structures of a lot of investment banks was the result of trying to compete with Freddie and Fannie, or a heavy focus on short-term profits or an a overly optimistic view of the future, or low interest rates isn't totally clear. However, considering highly leveraged firms existed across all industries it was probably a combination of all those things.



Personally I even doubt those securities would've made to the market weren't it for Fannie/Freddie support.

I disagree since all MBS did not involve Fannie/Freddie although they were the largest providers. There was far to much market support for these innovations outside of the GSE to assume that they were only viable with tacit government backing.

TheJoker
05-03-2010, 10:59 AM
He did, but when presented with counter-arguments replied with shallow line:

When called on it tried to dodge the issue.

No because you didn't provide any counter-arguments just assertations, you've since provided your arguments behind those positions which I have responded to.

I will admit I did jump to conclusion that the positions were based on ideology rather than faulty analysis. You've since cleared that up. Although I do suspect you ideology influences you analysis heavily, but I we are all guilty of that.

arosar
05-03-2010, 12:38 PM
Igor is up to his usual tricks.

The only ones actually debating are TheJoker and Jono.

As for Igor's claims that this GFC would've been smaller and over by now had it not been for bailouts, I'm just like, WOW. I mean fkn WOW! Somebody ring the RBA and give him the top chair in Martin Place.

AR

Capablanca-Fan
05-03-2010, 01:40 PM
Igor is up to his usual tricks.

The only ones actually debating are TheJoker and Jono.

As for Igor's claims that this GFC would've been smaller and over by now had it not been for bailouts, I'm just like, WOW. I mean fkn WOW! Somebody ring the RBA and give him the top chair in Martin Place.
But Igor is right. Maybe (but see below) it might have been OK if the bailout money had dropped out of the sky. But it didn't—it must ultimately come from taxpayers, so we have the injustice of poor taxpayers paying for the rashness of millionaires. It's no accident that Wall Street gave far more to the Dems, so they would back up this crony capitalism.

But the bailouts have the other problem of moral hazard: other businesses get the impression that they can take foolish risks, so if they win, they make billions, and if they lose, taxpayers will be forced to cover them.

Much of the risky behaviour of private lenders was encouraged by the implicit guarantee by the government bodies Fannie Mae and Freddie Mac, in turn protected by the Dems from scrutiny, as documented below:

_MGT_cSi7Rs

TheJoker
05-03-2010, 02:21 PM
But Igor is right. Maybe (but see below) it might have been OK if the bailout money had dropped out of the sky. But it didn't—it must ultimately come from taxpayers, so we have the injustice of poor taxpayers paying for the rashness of millionaires.

Except that would've happened anyway. Let's assume the government didn't restore liquidity to the credit markets. The organisations involved would have failed like AIG. Now how many people and organisations do you suppose held policies with AIG. All those individuals and organisations would have to pay again for their insurance or go bust if they couldn't affrod too. Most cost most likely bourne by the consumer higher prices less demand, and more unemployment (through closures and reduced demand) resulting lower demand which again puts pressure on unemployment. Who pays for people when they are unemployed (bingo the taxpayer)! Add to that all the firms who weren't able to roll-over their liabilities and the small businesses who rely on short-term credit facilities to smooth out cash flows nad you've got a potential disaster on your hands all of which will hit the everyday man in his pocket.

Even if the shareholders wear the cost who do you think are some of the big insitituinal investors, banks and pension funds. Who ends up bearing the cost the everyday man.

The fact is the millionaires responsible (the senior managment teams) are largely untouched apart from losing their jobs. They are certainly not able to foot the bill.


But the bailouts have the other problem of moral hazard: other businesses get the impression that they can take foolish risks, so if they win, they make billions, and if they lose, taxpayers will be forced to cover them..

This is a real concern, however faced with a potential economic meltdown, you can't really afford to take the high ground.


Much of the risky behaviour of private lenders was encouraged by the implicit guarantee by the government bodies Fannie Mae and Freddie Mac

Yet lenders were just as happy to work through other investment banks with no such "implicit government guarantee" to securtise their sub-prime loans. The risky beahviour of the lenders was encouraged by the fact that they weren't the ones who ended up holding the risk.

Capablanca-Fan
05-03-2010, 03:05 PM
Except that would've happened anyway. Let's assume the government didn't restore liquidity to the credit markets. The organisations involved would have failed like AIG. Now how many people and organisations do you suppose held policies with AIG. All those individuals and organisations would have to pay again for their insurance or go bust if they couldn't affrod too. Most cost most likely bourne by the consumer higher prices less demand, and more unemployment (through closures and reduced demand) resulting lower demand which again puts pressure on unemployment. Who pays for people when they are unemployed (bingo the taxpayer)!
Again, this is "what is seen". "What is not seen" (in Bastist's terminology (http://www.econlib.org/library/Bastiat/basEss1.html)) is the loss of jobs because government has taken money out of the economy to fund the bailouts and spendulus. Actually, this one really has been seen already. Remember Obamov rushed his Spendulus through, saying that without it, unemployment would top 8%. Now it's about 10% with the spendulus, and there is a trillion dollar debt to boot. So he now brags about jobs "created or saved", which is nonsensical.


Add to that all the firms who weren't able to roll-over their liabilities and the small businesses who rely on short-term credit facilities to smooth out cash flows nad you've got a potential disaster on your hands all of which will hit the everyday man in his pocket.
To counter this, Coolidge (http://www.burtfolsom.com/?p=365)and Reagan (http://www.burtfolsom.com/?p=544)"did nothing" after recessions, except cut tax rates, and the economy rebounded on its own. Hoover and FDR, then GWB and Obamov, "did something", i.e. spend lots, but it didn't help, and just increased the debt. Similarly, KRudd's mad rush spending on insulation has resulted in deaths and ruined houses, as well as debt.


Even if the shareholders wear the cost who do you think are some of the big insitituinal investors, banks and pension funds. Who ends up bearing the cost the everyday man.
Who bears the cost of bailouts? Hint: everyday man.


This is a real concern, however faced with a potential economic meltdown, you can't really afford to take the high ground.
What is this supposed to mean? I would argue, along with Coolidge and Reagan, that this is an especially important time to take the high ground.


Yet lenders were just as happy to work through other investment banks with no such "implicit government guarantee" to securtise their sub-prime loans. The risky beahviour of the lenders was encouraged by the fact that they weren't the ones who ended up holding the risk.
Indeed so. But this is the problem when government is involved: the effects don't stop with the directly connected, but continue to radiate.

TheJoker
05-03-2010, 04:22 PM
Again, this is "what is seen". "What is not seen" (in Bastist's terminology (http://www.econlib.org/library/Bastiat/basEss1.html)) is the loss of jobs because government has taken money out of the economy to fund the bailouts and spendulus.

We've been through this "crowding out" argument a million times before, you keep bringing it despite the fact that empirical evidence shows that crowding out only occurs when markets are booming. And in fact in downturns there is no corwding out but the reverse "induced investment". But keep believing the "theory" despite the evidence showing otherwise, you do the same thing with the YEC debate so you are not going to change. I post this for the benefit of others who might be reading this and think you know what you're talking about.


To counter this, Coolidge (http://www.burtfolsom.com/?p=365)and Reagan (http://www.burtfolsom.com/?p=544)"did nothing" after recessions, except cut tax rates, and the economy rebounded on its own.

We've covered this time and time again. The cause of the recession was different, it was primarly caused by contractionary monetary policy (i.e. high interest rates to wring out inflation). The recovery was simple matter of reversing that policy. Which was done through expansionary fiscal policy (tax cuts and lowering interst rates). Totally different from a situation where the recession occured during a period of low interest rates. Comparing the two is a fools game.


Who bears the cost of bailouts? Hint: everyday man.

My point exactly bailout or no bailout the same people end up paying the cost.



What is this supposed to mean? I would argue, along with Coolidge and Reagan, that this is an especially important time to take the high ground.

Yeah and let the economy grind to a halt, because not doing so might offer an incentive to future generations to behave recklessly. I put it to you that they would have behaved receklessly anyway. In a booming market and given that managment tenure is short-lived, and that investors demand immediate quartly growth, managers have far more incentives to behave recklessly than thos offered by Federal Government bailouts.

Australia doesn't have a history of government bailouts and yet Babbcock & Brown ABC Learning opted for a risky profile that eventually saw their downfall. Why? Because the incentives exist in the market.

In fact many firms outside the mortage sector got into massive trouble because they were so highly leveraged, that the slightest downturn in demand would have massive effects on the bottom-line.


Indeed so. But this is the problem when government is involved: the effects don't stop with the directly connected, but continue to radiate.

No I think you'll find that global capital and financial markets radiate the risk far more than government exposure. As seen in the fact that European Banks were hit hard because of global market exposure.

Capablanca-Fan
05-03-2010, 05:11 PM
We've been through this "crowding out" argument a million times before, you keep bringing it despite the fact that empirical evidence shows that crowding out only occurs when markets are booming.
I keep bringing it up because it's true. Your bluff about the “empirical evidence” reminds me of the global warm-mongers shouting “the debate is over” as evidence mounts against it. The fact remains that US unemployment rose after the spendulus, in direct contradiction to Obamov who claimed the spendulus was necessary to reduce unemployment. Evidently, like all Lefties, Joke believes that there is such a thing as a free lunch, and massive spending won't have consequences in the present and especially in the future.


We've covered this time and time again. The cause of the recession was different, it was primarly caused by contractionary monetary policy (i.e. high interest rates to wring out inflation). The recovery was simple matter of reversing that policy. Which was done through expansionary fiscal policy (tax cuts and lowering interst rates). Totally different from a situation where the recession occured during a period of low interest rates. Comparing the two is a fools game.
More likely, you explain away the fact that Coolidge and Reagan dealt with more severe recessions than this one by avoiding massive spending and debt. Instead, they cut tax rates, and prosperity followed. Contrast this with the Hoover spending which killed the economy far more than the stockmarket crash, and FDR playing Hoover writ large while treating the man with petty vindictiveness.


My point exactly bailout or no bailout the same people end up paying the cost.
So let's save the trouble of bailing out.


Yeah and let the economy grind to a halt, because not doing so might offer an incentive to future generations to behave recklessly.
More question-begging. The spenduluses have made economies grind to a halt, while the "do nothing" policies of Coolidge and Reagan allowed the economies to recover on their own, since their tax cuts provided more incentive for businesses and investors.


I put it to you that they would have behaved receklessly anyway. In a booming market and given that managment tenure is short-lived, and that investors demand immediate quartly growth, managers have far more incentives to behave recklessly than thos offered by Federal Government bailouts.
Fine, but then only the shareholders suffer, not the whole country.


Australia doesn't have a history of government bailouts and yet Babbcock & Brown ABC Learning opted for a risky profile that eventually saw their downfall. Why? Because the incentives exist in the market.
But only their shareholders lost. That's as it should be.


No I think you'll find that global capital and financial markets radiate the risk far more than government exposure. As seen in the fact that European Banks were hit hard because of global market exposure.
Yet Europe is more to the Left. Shows that more regulation is not the panacea you think.

TheJoker
06-03-2010, 12:57 AM
I keep bringing it up because it's true. Your bluff about the “empirical evidence” reminds me of the global warm-mongers shouting “the debate is over” as evidence mounts against it.

Believe what you want, its your fairytale.


The fact remains that US unemployment rose after the spendulus.

That doesn't mean it caused unemployment to rise since it was already rising rapidly before the stimulus:doh:


More likely, you explain away the fact that Coolidge and Reagan dealt with more severe recessions than this one by avoiding massive spending and debt.

Not me the widespread opinion of economists is that the early 1980's recessionary was caused by contractionary monetary policy. If you cant see the vast difference between the two circumstances. Interest rates were at 20% in 1981!!!! No wonder business went into recession. Who is going to invest in business ventures when the risk-free asset is returning 20%.

Also Reagan insituted a $100 billion corporate tax hike to counteract the deficit caused by the recession. Unemployment rose to 10.8%. There was a $4.5 billion bailout for the Continental Illinois Bank. The Feds purchased $870 million worth of bad loans. Public debt tripled under his administration. And interest rates were reduced. Time to take off the rose coloured glasses.


More question-begging. The spenduluses have made economies grind to a halt.

The economies were slowing much faster prior ot the introduction of fiscal stimulus. So something seems a miss in your assertation that fiscal stimulus caused the economies to grind to a halt.


Yet Europe is more to the Left. Shows that more regulation is not the panacea you think.

Yet in Australia that had strong prudential regulation we saw very little troubles with the banks.

Capablanca-Fan
06-03-2010, 03:17 AM
Believe what you want, its your fairytale.
Your fairytale is your faith that politicians and bureaucrats confiscating money and spending it their way will improve the economy better than people spending their own money as they see fit.


That doesn't mean it caused unemployment to rise since it was already rising rapidly before the stimulus:doh:
Excuse me: your hero Obamov specifically bleated that we must pass this stimulus or else unemployment would surpass 8%. It has now gone way past 9% with the spendulus and all its pork. So it failed his test.

Burt Folsom writes in What Do We Do With 11.7% Unemployment? (http://www.burtfolsom.com/?p=365)


That was the qeustion asked President Warren Harding and Vice-President Calvin Coolidge in 1921. The aftermath of World War I was upon us, and many returning veterans had no jobs. Among the political class of the 1920s, the cry went up for a kind of stimulus package. This particular stimulus emphasized public works–massive road building to accommodate the new automobiles on the streets and highways.

What did Harding and Coolidge do? They rejected the public works for two reasons. First was a quaint reason–most of it was unconstitutional. For example, the Erie Canal of 100 years earlier could not be built with federal funds because President Madison had declared such public works to be unconstitutional–and a gain for New York at the expense of the nation.

The second reason, more relevant to today’s observers, is that the public works schemes would not really create jobs–they would all be an illusion. What we seemingly gained by employing veterans on building highways, we would lose elsewhere because the tax dollars could no longer be used for private, local inventment.

In fact, Harding and Coolidge argued that the proper antidote to the 11.7% unemployment was tax cuts and reduced federal spending. When those two reforms were enacted, the 1920s gave us budget surpluses each year and a top tax rate of only 25%. The result was massive entrepreneurship, including inventions from Kleenex to scotch tape, sliced bread to the zipper. Radio was the biggest of them all. Unemployment dropped quickly and was only 2% in 1923.

How to confront 11.7% unemployment. Learn from Presidents Harding and Coolidge. The principles they applied will work today as well.


Public debt tripled under his [Reagan's] administration.
He won the cold war thanks to his military spending. But the Dem-controlled congress just wouldn't stop its big-spending ways.


The economies were slowing much faster prior ot the introduction of fiscal stimulus. So something seems a miss in your assertation that fiscal stimulus caused the economies to grind to a halt.
It's up to you to show that the stimulus helped the economy. After all, going into huge debt should not be done without a very good reason, so the onus is on the spendulus supporters. Furthermore, what's the point of honest work when one can wait for government handouts (cf. the Australian home insulation fiasco).


Yet in Australia that had strong prudential regulation we saw very little troubles with the banks.
Yet in England, with even more of a nanny state, was in far worse trouble. Not enough credit is given to Howard/Costello for leaving Australia with a healthy surplus that helped us weather the recession.

TheJoker
07-03-2010, 04:38 PM
Your fairytale is your faith that politicians and bureaucrats confiscating money and spending it their way will improve the economy better than people spending their own money as they see fit.

No its aobut leakage an injection.



Excuse me: your hero Obamov specifically bleated that we must pass this stimulus or else unemployment would surpass 8%. It has now gone way past 9% with the spendulus and all its pork. So it failed his test..

I'm not interested in politicians rhetoric, I am interested in whether your assertation that the stimulus caused more unemployment is true. You made the assertation the onus of proof is on you.


He won the cold war thanks to his military spending..

So you agree he didn't do nothing he put the country into huge debt through fiscal stimulus.



It's up to you to show that the stimulus helped the economy..
No again you made the claim that the stimulus was bad for the economy, therefore the onus of proof is on you. I just showed a few reasons why that assertation was unlikely.


Yet in England, with even more of a nanny state, was in far worse trouble. Not enough credit is given to Howard/Costello for leaving Australia with a healthy surplus that helped us weather the recession.

So you agree that the stimulus helped us avert the recession, otherwise what would a surplus have to do with a recession, unless the government is going to inject it into the economy. You can't have it both ways either the stimulus made the economy worse, and therefore Howard running a surplus was a bad idea because it took money out the pockets public to be spent by the government, which you've just stated is a receipe for disaster

Also I'd like to see some evidence that the UK banking sector is more regulated that Australia.

Capablanca-Fan
07-03-2010, 10:58 PM
No its aobut leakage an injection.
No, it's about the best way to spend money. The worst way includes government spendulus packages, so the insulation fiasco should not have been surprising.
5RDMdc5r5z8


I'm not interested in politicians rhetoric, I am interested in whether your assertation that the stimulus caused more unemployment is true. You made the assertation the onus of proof is on you.
The onus is on those who want to spend my money to show that it will do some good. Here, there is no evidence that the spendulus helped unemployment, and all evidence that it hurt, by sucking up money from the economy and creating uncertainty.


So you agree he didn't do nothing he put the country into huge debt through fiscal stimulus.
The debt was due to the Dems' big-spending ways.


No again you made the claim that the stimulus was bad for the economy, therefore the onus of proof is on you. I just showed a few reasons why that assertation was unlikely.
I gave you a very big reason: the debt without any improvement in unemployment. This also occurred with FDR—his Treasury secretary and close friend, Henry Morgenthau, conceded this fact to Congressional Democrats in May 1939:

“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!”


You can't have it both ways either the stimulus made the economy worse, and therefore Howard running a surplus was a bad idea because it took money out the pockets public to be spent by the government, which you've just stated is a receipe for disaster.
The surplus reflected that the government spent less than it was taking in, which is good. While I don't like government spending on more than its proper role, the Howard surplus could have allowed moderate spending while avoiding debt.


Also I'd like to see some evidence that the UK banking sector is more regulated that Australia.
It was under a social democrat government for most of the time Australia was under Howard, yet your hero KRudd attacked capitalism and defended the very sort of social democracy that the UK had.

TheJoker
08-03-2010, 09:30 AM
The onus is on those who want to spend my money to show that it will do some good. Here, there is no evidence that the spendulus helped unemployment.

What was the rate of change in unemployment before and after the stimulus. I think it certainly slowed after the stimulus. Whether there is any cause and effect i don't know. But I faill to to see how it made unemployment worse when prior to the stimulus unemployment was on a massive downturn and we have since seen an improvement in the rate of deteriation of employment levels.



I gave you a very big reason: the debt without any improvement in unemployment.

There certainly was an improvement in the unemployment trend. Whether that can be attributed to the stimulus I am not sure, but there was improvement.


The surplus reflected that the government spent less than it was taking in, which is good.

Why? Doesn't that mean (accroding to your ideology) the government is simply stealing people's hard-earned dollars, not because it necessary to pay for services but so it can also steal there interest payments. Isn't the government unencessarily taking money away from the private sector who, accroding to free-marketers, are much better at spending and investing that money?

Did the Howard government spend less or simply confiscate more?


While I don't like government spending on more than its proper role, the Howard surplus could have allowed moderate spending while avoiding debt.

Backflip.... government spending ruins the economy according to you. Let me help you with your argument, what you want to say is the surplus could have been used to fund tax cuts, which you believe stimulate the economy in a more sustainable way.



It was under a social democrat government for most of the time Australia was under Howard, yet your hero KRudd attacked capitalism and defended the very sort of social democracy that the UK had.

More rhetoric, how about providing substaintial evidence for you claims. I am sure there are a number of organisations that track the level of regulation in the banking sector across the globe.

BTW I am neither a fan of Rudd or Howard. Both are too ideological for me.

Capablanca-Fan
08-03-2010, 03:44 PM
How nice that workers' rights will now be protected, even though thousands of after-school jobs will be lost (as above in this thread), and now many others will face reduced wages. But workers are surprised? Blind Freddie's deaf guide dog could discern that Labor has long ceased to be the party of the worker, and now is the party of wealthy lawyer types, greenstapo elitists, and the Anointed (which of course overlap considerably).

NSW workers face pay cuts of up to $370 a week under Rudd government workplace reforms (http://www.dailytelegraph.com.au/news/nsw-workers-face-pay-cuts-of-up-to-370-a-weekm-under-rudd-government-workplace-reforms/story-e6freuy9-1225837937839)
Steve Lewis, National Political Correspondent From:
Daily Telegraph, 8 March 2010

TENS of thousands of NSW workers face pay cuts of up to $370 a week under sweeping Rudd Government workplace reforms.

In a major election-year challenge to Labor, truck drivers, funeral workers, bar staff, aged care nurses and clerks are furious at award changes…

Nearly 50,000 NSW truck drivers stand to lose up to $200 weekly because they will come under a new national award scheme from July 1. They now plan to take their protest direct to Canberra with a 1000-strong convoy organised for June.

While the Prime Minister and Workplace Relations Minister Julia Gillard promised no worker would be worse off under their industrial reforms, a Daily Telegraph investigation reveals this declaration to be another Rudd Government broken promise… The loss of pay and conditions is a result of the Government’s plan to condense the numbers of national and state awards — from more than 2000 to 130.

Desmond
08-03-2010, 04:01 PM
^ This would appear to say that if you drop the award then a drop in real wages follows.

But you don't apply this logic to minimum wages.

Capablanca-Fan
08-03-2010, 04:11 PM
^ This would appear to say that if you drop the award then a drop in real wages follows.

But you don't apply this logic to minimum wages.
Here's the difference: in this recent protest, it was the government using force to lower actual wages. Abolishing minimum wage laws would force no one to accept any wage, but allow people to work for a rate that their productivity justified.

Desmond
08-03-2010, 04:54 PM
Here's the difference: in this recent protest, it was the government using force to lower actual wages. Abolishing minimum wage laws would force no one to accept any wage, but allow people to work for a rate that their productivity justified.
Sorry but I don't see how the government is forcing anything of the sort. The award is not a dictated wage but a minimum. If employers want to continue paying $20 despite the award dropping to $17 then the government is not going to stop them.

Capablanca-Fan
08-03-2010, 06:41 PM
Sorry but I don't see how the government is forcing anything of the sort. The award is not a dictated wage but a minimum. If employers want to continue paying $20 despite the award dropping to $17 then the government is not going to stop them.
Are you sure? I thought that this was a compulsory payment. If not, then you have a point. Still, this and the lost jobs because of minimum-hour laws means that Labor broke its promist that no worker would be worse off.

Desmond
08-03-2010, 10:19 PM
Are you sure? I thought that this was a compulsory payment. If not, then you have a point. Still, this and the lost jobs because of minimum-hour laws means that Labor broke its promist that no worker would be worse off.
From the Qld Wageline website glossary (http://www.wageline.qld.gov.au/glossary/index.html):


Award
An award is a legally binding document approved by the Commission (federal or state) prescribing the minimum terms and conditions of employment for those employees covered by the application clause of this award.

What your article really shows is that it is taken from granted that if employers have the choice to reduce wages they will do so. Not because they can't afford it. Not because the workers aren't productuive enough. Because they can. An argument for minimum wages.

Basil
08-03-2010, 10:39 PM
What your article really shows is that it is taken from granted that if employers have the choice to reduce wages they will do so. Not because they can't afford it. Not because the workers aren't productuive enough. Because they can. An argument for minimum wages.
Some employers. I have never paid minimum, (or less) whether it be for café work, writing work, admin work, sales work, driving work etc. etc..

Capablanca-Fan
09-03-2010, 02:27 AM
Some employers. I have never paid minimum, (or less) whether it be for café work, writing work, admin work, sales work, driving work etc. etc..
Ah, but in the minds of leftards, employers are always out to exploit employees, while employees never exploit employers. What they don't realize is that the best protection for employees is other employers.

Capablanca-Fan
09-03-2010, 02:32 AM
From the Qld Wageline website glossary (http://www.wageline.qld.gov.au/glossary/index.html):
Fair enough.


What your article really shows is that it is taken from granted that if employers have the choice to reduce wages they will do so.
Actually, there was a time in 19th-century France when maximum wage laws were imposed. But some employers tried to work around this to attract top staff.


Not because they can't afford it. Not because the workers aren't productive enough. Because they can. An argument for minimum wages.
Not at all. It means that the employees are not as productive as the award rate, which was keeping wages artificially high.

Some realism: if the minimum wage were set at $100k, a lot of us would be unemployable. The same applies in principle to lower settings; it's just a matter of degree. Furthermore, the real minimum wage is zero; the higher the official minimum wage is set, the more people will receive real minimum.

Desmond
09-03-2010, 12:07 PM
Ah, but in the minds of leftards, employers are always out to exploit employees, while employees never exploit employers. What they don't realize is that the best protection for employees is other employers.
Actually it is in the mind of the author of the article you quoted.

Capablanca-Fan
04-04-2010, 11:13 AM
TWO teenagers who lost their after-school jobs at a Victorian hardware store have appealed to Kevin Rudd and Julia Gillard for their jobs back (http://www.news.com.au/business/teens-caught-in-workplace-row-reject-cash/story-e6frfm1i-1225849150368), after their employer was required to pay $3000 in back pay.

Matthew Spencer and Leticia Harrison said the part-time work had given them independence and confidence, and they would not accept back pay “for work we have not done”, The Weekend Australian reported.

The duo were among six youths who lost after-school work at the Terang and District Co-operative because their new award stipulated they had to be employed for a minimum of three hours a day, compared with the previous state award that had a two-hour minimum.

However, the youths were engaged after school for 90 minutes, with their employer arguing that was the only amount of work available before the store, located 210km southwest of Melbourne, closed at 5.30pm.

...

"We have decided we don't want the money; we would rather have our jobs back," they wrote.

"We do not feel that you have exploited us in any way as we had agreed that we would work for an hour and a half after school as it suited with our school hours and the opening times of the hardware store.

"We would prefer that the work could continue with the same hours. Surely if we want to work for an hour and a half after school we should be able to do so, especially when the hardware store is only open until 5.30pm. [Why not indeed? Can one of the many blinded KRuddlovers here explain why the government has any business depriving them of jobs?]

"This job has given us independence, skills and confidence that when we leave school will be valuable to us in finding future employment."

Unions are resisting the move, with Joe de Bruyn, national secretary of the shop assistants union, warning that 30 per cent of the workforce were casuals and part-timers who relied on minimum hours protections. [Here's the reason: Layba is paying back its union bankrollers by protecting them from competition. Unions love minimum wage laws for the same reason.]

CameronD
04-04-2010, 01:38 PM
This is all very interesting as my university assignment was based on capitalism and Marxism. The views of the assignment have basically turned me from a swinging voter to a life labor voter and unionist. Its all about ruling class v working class and the workers need to stand together.

Basil
04-04-2010, 01:46 PM
This is all very interesting as my university assignment was based on capitalism and Marxism. The views of the assignment have basically turned me from a swinging voter to a life labor voter and unionist. Its all about ruling class v working class and the workers need to stand together.
Another notch for the uni system. Good work Cam. Outside of uni, Capitalism v Marxism isn't even worth debating these days. Even leftist governments (when given the wheels of power and the training that the public service provides) are righties in lefty clothing. But inside uni, it's all very intense and meaningful with socialist ideas winning out. It's OK mate, there have hundreds of thousands before you. many wake up to themselves around about the age of 35 - earlier if you have a chance to work in commerce (yes, even as an employee, or yes, even as a blue collar employer - basically anyone with a real-world clue). But right now, you think you've got it nailed, right? :rolleyes: :wall:

Basil
04-04-2010, 01:49 PM
Its all about ruling class v working class and the workers need to stand together.
OK seriously. I'm game for some punishment. Who exactly is 'the ruling class'? Me? A relative of your who cashes in his/ her super for a coffee shop franchise?

Basil
04-04-2010, 01:53 PM
BTW do you know if any of your fellow students received good marks from your socialist tutor who didn't really lead you to his own conclusions for eschewing Marxism? :doh:

CameronD
04-04-2010, 02:03 PM
Another notch for the uni system. Good work Cam. Outside of uni, Capitalism v Marxism isn't even worth debating these days. Even leftist governments (when given the wheels of power and the training that the public service provides) are righties in lefty clothing. But inside uni, it's all very intense and meaningful with socialist ideas winning out. It's OK mate, there have hundreds of thousands before you. many wake up to themselves around about the age of 35 - earlier if you have a chance to work in commerce (yes, even as an employee, or yes, even as a blue collar employer - basically anyone with a real-world clue). But right now, you think you've got it nailed, right? :rolleyes: :wall:

Its not as extreme as Marx says it. But there is a power struggle between the ruling class and working class. The ruling class wants to reduce the subsistence wage (and increase the rate of exploitation as Marx believes), whereas the working class wants to increase it.

Personally, Im happy with what I earn and where I am. I dont consider myself exploited. But I am in the working class, and its in my interests to support them.

Ive got 2 more marxist assignments left then I can get away from such theries and start real subjects.

CameronD
04-04-2010, 02:07 PM
BTW do you know if any of your fellow students received good marks from your socialist tutor who didn't really lead you to his own conclusions for eschewing Marxism? :doh:

We were to summerise a 30 page academic writing on inequality of class in Australia into a 350 word summary (the other topics were either racism in Australia or the human rights.) Took me about 20 hours to do it.

Basil
04-04-2010, 02:08 PM
But there is a power struggle between the ruling class and working class.
Where have you witnessed this struggle? (Apart from your tutor's and fg7's dribblings?)


The ruling class wants to reduce the subsistence wage (and increase the rate of exploitation as Marx believes)
What do you support this with? And again, who comprises the ruling class? Are people born into it? Do they buy into it? Are they promoted into it?


Personally, Im happy with what I earn and where I am. I dont consider myself exploited. But I am in the working class, and its in my interests to support them.
I have a newsflash for you that Marx and your tutor didn't let you in on: it's in my global interests to support and look after all people in the economy - and I have 20 years conduct to support my position - including paying some employees more than I pay myself. Put that in your crockpot and smoke it - and send it first class to your dumb ass tutor.

Capablanca-Fan
04-04-2010, 02:08 PM
This is all very interesting as my university assignment was based on capitalism and Marxism. The views of the assignment have basically turned me from a swinging voter to a life labor voter and unionist.
Typical of the leftist bias of academia. Trouble is, a lot of those academics have never been in the real world. So it's hardly surprising that the only place where socialism is still popular is the unis, where ideas don't have to work to survive. This includes that class warfare crap.

In the real world, people from workers' paradises like Cuba risk their lives to come to the capitalist hellhole America, not vice versa. This was so in relation to the Soviet Union during the Cold War, and with China and Hong Kong. Similarly, the Berlin Wall was built to keep East Germans leaving their Marxist paradise.


Its all about ruling class v working class and the workers need to stand together.
But as shown, it's really workers v workers. The unions want minimum wage or minimum hour laws, despite the fact that they cost jobs, because they protect competition. Furthermore, it's also employer v employer in a free market, i.e. if one employer treats his staff like crap, then other employers will hire them.

Furthermore, in the real world, classes are not permanent. Most people in the bottom class end quickly end up in higher classes, including the top one. In reality, the different classes are the same people at different stages of their lives, as ex-Marxist Thomas Sowell often points out.

Basil
04-04-2010, 02:09 PM
We were to summerise a 30 page academic writing on inequality of class in Australia into a 350 word summary (the other topics were either racism in Australia or the human rights.) Took me about 20 hours to do it.
Pfft :hand: Did your tutor show you various papers where Marx has been debunked and ask you to critique them?

CameronD
04-04-2010, 02:17 PM
Pfft :hand: Did your tutor show you various papers where Marx has been debunked and ask you to critique them?

I wouldnt worry to much about it. 1 vote means nothing in my electorate and Im to busy working and studying to care about such things once I finished this subject.

I could easily see myself being converted by a cult. Lucky for me they never go near me. Never seen a JW in my life or have them knock on my door.

CameronD
04-04-2010, 02:18 PM
Pfft :hand: Did your tutor show you various papers where Marx has been debunked and ask you to critique them?

I can debunk them in assignment 4 as its not loaded in a certain direction.

Basil
04-04-2010, 02:21 PM
I wouldnt worry to much about it. 1 vote means nothing in my electorate ...
If only. The intellectual conditioning political thugging you've just received at uni is repeated hundreds of thousands of times a year.

Basil
04-04-2010, 02:21 PM
I can debunk them in assignment 4 as its not loaded in a certain direction.
Don't expect a good mark :wall: :lol:

Capablanca-Fan
04-04-2010, 02:33 PM
We were to summerise a 30 page academic writing on inequality of class in Australia into a 350 word summary (the other topics were either racism in Australia or the human rights.)
Right, so the very nature of the assignment was question-begging. I.e. it presupposes that there is such a thing as class, or that racism is a significant reality in Australia.

Garvinator
04-04-2010, 02:48 PM
CameronD, part of the point Captain and Jono are trying to point out is that if you had handed in a paper that openly and unapologetically criticised Marxism and extolled the virtues of the capitalist system, you would have receive a very poor mark, regardless of how good your arguments were.

TheJoker
05-04-2010, 12:48 AM
Its not as extreme as Marx says it. But there is a power struggle between the ruling class and working class. The ruling class wants to reduce the subsistence wage (and increase the rate of exploitation as Marx believes), whereas the working class wants to increase it.

The big problem with this argument is that it assumes the distribution of profits between labour and capital is a zero-sum game. It's not, and that where the whole Marxism argument falls in heap.

Investment in human capital pays massive dividends in many industries. Especially in a knowledge based economy like Australia

TheJoker
05-04-2010, 12:59 AM
CameronD, part of the point Captain and Jono are trying to point out is that if you had handed in a paper that openly and unapologetically criticised Marxism and extolled the virtues of the capitalist system, you would have receive a very poor mark, regardless of how good your arguments were.

You indeed would since the task was to summarise the original authors argument not to critically analyse the article.

More fool CameronD if he was willing to accept the authors argument as valid without first seeking criticisms of that argument.

As for Uni's being geared around leftist ideals that very much depends on the University and the subject. Certainly trying to extoll the virtues of Marxism in most business schools isn't likely to get you very far. Neither would adopting a viewpoint supporting government economic intervention in the Economics program at the University of Chicago.

Desmond
05-04-2010, 02:05 PM
Never seen a JW in my life or have them knock on my door.Had a couple round the other week. Quite nice looking girls, too. I politely told them that I didn't buy anything from door-to-door salesmen, least of all religion.

Capablanca-Fan
10-06-2013, 02:45 AM
Does the Minimum Wage Hurt Workers?
Ct1Moeaa-W8
Economics professor Antony Davies explains that this view of the minimum wage overlooks an important detail: The minimum wage does not force employers to pay a particular wage to every worker; it forces employers to pay a particular wage to every worker they choose to keep. While the minimum wage may be well-intentioned public policy, it often huts the very workers most in need of our help.

Damodevo
10-06-2013, 02:56 AM
Lower Wages Call to Tackle Youth 'Jobs Scandal'


Rising youth unemployment (http://www.smh.com.au/business/lower-wages-call-to-tackle-youth-jobs-scandal-20130609-2ny3e.html) is the ''scandal of our times'' and should be tackled by removing the minimum wage, introducing more training programs and maintaining an onshore manufacturing workforce, the global head of hiring firm Adecco says.

With youth unemployment in Europe and Australia at twice the overall jobless rate, and above 50 per cent in Greece and Spain, Adecco chief executive Patrick De Maeseneire said countries had to rethink how they constructed their economies or ''lose a generation for whom we are not creating a future''.

''What can we do to create an economy where there is a future for everybody?'' Mr De Maeseneire, who heads one of the world's biggest recruitment firms, said during a visit to Australia.

Rincewind
10-06-2013, 03:10 AM
Youth unemployment in Australia has been going at double the rate for older workers for as long as I can remember. Sure it is not ideal but it is certainly nothing new. The unemployment rate (particularly youth but overall as well) is acute in countries like Greece and Spain. But why would you advocate something radical like dismantle labour protections like the minimum wage in Australia when the present unemployment rate (in Australia) is not exceptional?