Sunday, August 10, 2014

Big news on jobless data burying the bigger problem - youth unemployment

Headline rate probably a measurement error

I hate to say it, but the spectacular events that hit the headlines aren't necessarily the things most worth worrying about. The big news on the economy this week was the spectacular jump in the unemployment rate from 6 per cent to 6.4 per just during July. Not a big worry.

Question is, what does it prove? That the economy fell into a hole around the middle of the year? Doubt it. There's little other evidence that it did and a lot that it didn't.

That the slow upward creep in unemployment we've been seeing for about two years may have accelerated? Doubt that, too. Again, the other economic indicators aren't pointing that way.

(Indeed, some economists have been wondering if unemployment was close to peaking. So far this year employment has grown by an average of 15,600 jobs a month, compared with just 5100 a month last year.)

That the unemployment figures are volatile from month to month and this is an unexplained statistical blip that should be corrected next month? Seems a bit too big for that.

Truth is it's hard to know what the problem is. Easier to be sure when we've seen another month or two's figures.

But my guess is it's a once-only upward step in the measured rate of unemployment, caused by a seemingly small change in the questions that people in the Bureau of Statistics' monthly survey are asked so as to ascertain whether they've been "actively" seeking a job if they don't have one.

The change – made partly because of the switch to searching for jobs on the internet rather than at Centrelink – seems to have led more people to be classed as unemployed and fewer as "not in the labour force".

If this guess proves right, it's not so worrying. It doesn't change reality, just the way we measure it. In any case, we've long known that the official measure of unemployment is very narrow and understates the extent of the problem.

That's why the bureau publishes every quarter a broader measure of unemployment, which takes the official unemployment rate and adds the under-employed – people with jobs who aren't working as many hours a week as they'd like to – to give the "labour force underutilisation rate".

The figures for May show narrowly measured unemployment of 6 per cent, and an underemployment rate of 7.5 per cent, to give a broader measure of 13.5 per cent.

Less spectacular than this month's jump in the official rate but, to me, more worthy of worry is news that hasn't hit the headlines: the rapid worsening in teenage unemployment.

Whereas so far this year the trend rate of overall unemployment has risen by 0.2 percentage points, the trend rate for people aged 15 to 19 has risen by 2.8 percentage points to 19.3 per cent.

Note, this doesn't mean almost one youth in five is unemployed. Most people that age are in full-time education, so aren't in the calculation. Turns out about one in 20 of all 15 to 19 year-olds is unemployed and looking for a full-time job.

Many people have it in their heads that unemployment rises because people lose their jobs and employment falls. That's true only in recessions. It's rare for employment to fall – it fell only briefly even during the global financial crisis.

No, the main reason unemployment rises outside of recessions is that the economy isn't growing fast enough to employ all the extra people joining the labour force from education, as immigrants or as mothers rejoining.

That's what's been happening over the past two years. And young people – particularly those who leave school or training too early – have borne most of the burden of insufficient job creation. We should be doing much better by them than Work for the Dole and denying them benefits for six months to keep them hungry.

But there's nothing spectacular about this quiet suffering, so it doesn't hit the headlines. Much better to scandalise over factory closures, which surely signal the end of the world. So let's look at the facts on retrenchment, courtesy of a Bureau of Statistics study.

About 2 million people left their jobs over the year to February 2013 (the latest period for which figures are available). About 60 per cent of these left voluntarily and 21 per cent left because of their illness or injury, leaving 19 per cent – 380,000 – who left because they were retrenched.

That's a rate of retrenchment of 3.1 per cent. The rate hit 4 per cent in 2000, but then fell to a low of 2 per cent in 2008, just before the global financial crisis, then increased sharply to 3.1 per cent in 2010, where it has pretty much stayed since.

Over the year to 2013, all industries experienced retrenchments, but the most were in construction, 65,000; retailing, 40,000; and manufacturing, just under 40,000.

But the number of people employed in particular industries differs a lot so, judged by rate of retrenchment, utilities and construction come equal first with 6.4 per cent, then mining with 6 per cent, pushing manufacturing into fourth place with 4.5 per cent.

The rate of retrenchment is consistently higher for men because men tend to dominate those industries where retrenchment rates are higher, whereas retrenchment rates tend to be lower in industries dominated by women workers, such as education and health.

The likelihood of being retrenched falls as your level of educational attainment rises. We're more conscious of older workers being laid off but, in fact, retrenchment is greatest among workers aged 25 to 44.

And what happens to people who're laid off? For those retrenched over the year to February 2013, half were back in jobs by the end of the year, leaving 29 per cent unemployed and 21 per cent not in the labour force.


The political significance of the section 18C debacle

Many Australians think that multiculturalism means better restaurants. I doubt they thought it meant that Muslim and other ethnic lobby groups would wield the power of veto over important national policies.

That the sectional interests of organised ethnic groups might subvert the national interest has long ranked high among the concerns about multiculturalism articulated by critics on the centre-right.

That such concerns are legitimate has been verified by the debacle that is the Abbott government's decision to break its election promise and abandon its commitment to abolish section 18C of the Racial Discrimination Act.

When announcing the policy U-turn, the Prime Minister said that the government's push to restore free speech in Australia had complicated negotiations with the Muslim community over new counter-terrorism laws.

This was a remarkably frank and alarming admission. It implied that Muslim organisations would not join 'Team Australia' and back measures to stop Islamist fanatics harming innocent Australians of all creeds and colours unless the government caved in on section 18C.

The Abbott government has not only sold out the democratic right to free speech of all Australians to help itself politically with the ethnic lobbyists and 'human rights' lawyers opposed to repealing section 18C. What is worse are the political consequences of the government's actions, which are likely to embolden the Muslim lobby at a time when it is discovering just how much political muscle it can flex.

In response to the war in Gaza, some state and federal Green and Labor MPs have publically condemned Israel, and one federal Liberal MP has encouraged Australia to adopt a 'more neutral stance on Israel.'

These calls to revise Australia's traditional, bi-partisan foreign policy of support for Israel are motivated by raw political calculation for the reasons set out by former Foreign Minister Bob Carr in his diaries released earlier this year.

Carr's book detailed the circumstances surrounding the rolling in Cabinet of the former Prime Minister Julia Gillard in 2012, which led to Australia abstaining on the vote in the United Nations General Assembly on the recognition of Palestine's observer status at the UN. Carr explained that the Cabinet-revolt was in response to electoral concerns that the original 'No' vote in the UN backed by Gillard would see the Labor Party lose support among Muslim voters in key Labor seats in South Western Sydney.

The final indignity of this sorry episode is the fact that one needs to worry whether it is legal to discuss its political significance. With section 18C still on the statute books, who knows who might take offence and decide to wage some 'lawfare' to shut down debate about a subject of national importance.


Russia will continue to buy Australian WINE despite introducing harsh import bans

Russia has introduced trade sanctions on Australia which will block hundreds of millions of dollars worth of Aussie imports each year - but they will continue to import our wine.

Russia has banned agricultural products from Australia and other western countries after they imposed their own sanctions against Moscow over its policy in Ukraine following the MH17 disaster.

The retaliatory ban covers all imports of meat, fish, milk and milk products and fruit and vegetables.  But bizarrely, President Putin has approved the importation of Australian wine.  In 2013, Russia consumed $4.7 million worth of Aussie alcoholic beverages.

The federal government says it's disappointed by Russia's trade sanctions on Australia. Prime Minister Tony Abbott has confirmed that Australia are working towards harsher sanctions, now that Australian personnel are returning to the Netherlands.

Prime Minister Abbott was reluctant to strengthen sanctions against Russia whilst personnel on the ground were only 'within 20 or 30km from the Russian border.

Russian Prime Minister Dmitry Medvedev said on Thursday the 'full embargo' would come into effect immediately and last for one year, unless 'our partners demonstrate a constructive approach' in regards to sanctioning Russia.

Foreign Minister Julie Bishop says it's disappointing that Russia has retaliated rather than adhere to international concern and stop the flow of weapons to Russian-backed separatists in Ukraine.

It's believed Russia supplied the weapon that was used to down flight MH17 over eastern Ukraine, killing 298 people, including 38 Australians.

'The Australian government will do everything in its power to minimise the impact on Australian agricultural producers,' she told AAP in a statement.

Australia had acted in line with others in the international community in imposing sanctions on Russia, she said.

Russia's sweeping move will cost western farmers billions of dollars but could also lead to empty supermarket shelves in Russian cities.  'Of course this is a serious decision for the suppliers of such foods from these countries,' Mr Medvedev said.

The ban will not cover baby food and people will still be able to buy the banned products abroad if they want, but Mr Medvedev warned those who tried to profit from reselling them would be 'harshly punished'.

Experts said that local producers would find it hard to fill the gap left by the ban, as the nation's agricultural sector had continued to suffer from poor efficiency and shortage of funds.

The damage to consumers inflicted by the ban would be felt particularly hard in big cities like Moscow, where imported food filled an estimated 60-70 percent of the market.

Mr Medvedev said Russia could go further and ban western carriers from flying over Russia on flights to and from Asia - a move that would significantly swell costs and increase flight time.

He said there has been no decision on that yet, and wouldn't specify when and under what conditions the move could be taken.

He made it clear that Russia hoped the sanctions would make the west revise its policy and stop trying to pressure Russia with sanctions.  'We hope our partners will put a pragmatic economic approach above bad policy considerations, and they will start thinking instead of trying to scare us,' he said.

The decision shows that President Vladimir Putin has no intention of bowing to western pressure over Ukraine and will instead try to strike back at the west.

The U.S. and the EU have accused Russia, which annexed Ukraine's Crimean Peninsula in March, of fomenting tensions in eastern Ukraine by supplying arms and expertise to a pro-Moscow insurgency, and have imposed asset freezes and loan bans on a score of individuals and companies.


Jewish schools in lockdown after Bondi race hate bus attack

ARMED guards, police patrols and traffic escorts greeted Jewish families yesterday as an unprecedented security crackdown was imposed across the eastern suburbs in the wake of the anti- ­Semitic attack which left a city shocked and shaken.

Jewish colleges across Sydney were placed on high alert in the wake of Wednesday’s terrifying attack by six drunken teenagers which left a busload of Moriah and Mount Sinai schoolchildren traumatised.

The gravity of the distant Gaza conflict shattered what should have been just another day for children as young as six and seven at the Jewish eastern suburb schools.

They were confronted by uniformed police officers on their buses and armed security guards clad in bulletproof vests at the schoolgates.

Police have so far made three arrests in relation to the incident involving six teenagers, aged between 14 and 17. They allegedly boarded the 660 school bus and hurled anti-Semitic abuse and threatened to cut the throats of its young passengers. Police are hunting three more people.

The six teenagers who allegedly boarded the school bus and began chanting “heil Hitler”, “kill the Jews” and “Palestine, Palestine” will be dealt with under the Young Offenders Act if charged, which means they will avoid jail and criminal convictions.

It is understood all six youths live around Sydney’s eastern suburbs and attend public schools.

A Moriah College student told The Daily Telegraph last night the incident was being widely discussed and condemned by the school ­community.

“We’re all shocked that something like this could happen in Australia,” he said. “Teachers were telling us it’s something you’d expect to see in Europe.”

He said his school bus was escorted by security personnel yesterday morning and an increased security presence — including armed members of the Board of Deputies’ Community Security Group — was visible throughout Moriah.

The school’s principal John Hamey, in a letter sent home to parents, described the attack as “random”

He said steps were being taken to ensure students wouldn’t be exposed to such abuse again.

“The college, in conjunction with the NSW Jewish Board of Deputies and CSG, has already commenced discussions with the (State Transit Authority) to minimise the possibility of a recurrence of this sort in the future,” he wrote.

Mr Roberts also personally escorted schoolchildren to and from buses yesterday.

Police nabbed five drunken youths following a separate incident in Rose Bay around 3.30am yesterday morning and learned that three of those teens had been involved in the anti-Semitic tirade.

CCTV footage from the bus provided by the State Transit Authority was forming part of the police investigation.

The driver of the 660 bus at the time followed protocol and will not be suspended, an STA spokesman said.

Jacqui Blackburn, whose 12-year-old daughter pleaded with the driver to kick the six youths off the bus, said the 25 children on-board were still traumatised by the ordeal.

Police said last night there was no evidence of any physical violence.

The alleged victims were yesterday being interview by police in the presence of guardians.


Anti-protest laws draw demonstrators to Tasmanian Parliament

Proposed anti-protest laws have drawn demonstrators to a union-organised rally outside the Tasmanian Parliament.

However, the Construction, Forestry, Mining and Energy Union (CFMEU) concedes its opposition to the Tasmanian Government's anti-protest laws is not shared by all its members.

Under the new laws, people who disrupt workplaces faced $10,000 spot fines, with three-month mandatory jail sentences for repeat offenders.

Proposed laws:

Protesters may not cause or threaten damage to a business
Police can direct protestors to leave a business or "business access area"

Police can remove any obstructions to a business and people may not prevent them doing so

Inciting any of these acts is an offence

Police can demand proof of identity

Police can arrest without warrant and remove people from a business

Officers can use necessary force to perform these powers

The laws were passed by Tasmania's Lower House in late June and are now before the independent-dominated Upper House.

The changes have been criticised by opposition parties, civil liberties advocates, environmental activists, lawyers and unions.

The CMFEU says the laws go too far, and today joined 15 other unions at State Parliament lawns to call on the Upper House to reject them.

CFMEU national secretary Michael O'Connor said some members of the union supported what the Government was doing.

"We've communicated with our members, and as I've said there are different views here, but quite quickly, from my point of view... I'm saying to you that this legislation is way too wide for the purpose," he said.


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