EDITORIAL FRIDAY 16.01.09.
This week’s unemployment figures are both better and worse than expected. Better, in the sense that the overall unemployment rate has increased only marginally from 4.4% to 4.5%, reflecting a net loss of about 1200 jobs in December. Worse, because the facts behind that figure paint a more disturbing picture. Almost 44 000 full time jobs vanished in December, while at the same time almost as many part time positions were added. It appears that more of the workforce is becoming casualised.
There could be a number of interpretations to explain this phenomenon. It could be that as the Global Financial Crisis pushes our economy closer to recession businesses are cutting hours instead of cutting jobs in an effort to minimize the damage. Or it could simply be an exaggeration of the seasonal effect of a surge of pre-Christmas part time jobs co-inciding with the sudden drop in full time employment. It could even be an extension of the long term trend of the casualisation of the workforce as businesses seek to place themselves to have some flexibility in the face of the oncoming challenges of both the looming recession, and the forthcoming changes to industrial relations law.
Whichever spin is put onto the figures though it still amounts to a strong warning of more difficult times ahead. If the first explanation is correct, the move to more part time jobs is just a precursor to further job cuts as the downturn becomes more severe. If the Christmas surge is the explanation the obvious trouble is that Christmas is now behind us and as the stock take sales wind down the retail sector is entering what is always its quietest period of the year. As for the flexibility argument, well that’s just another way of saying that cutting jobs is made easier.
At this time, business leaders are pushing for the Government to delay its Fair Work Australia bill because they say it could potentially add to unemployment. Business wants to keep wages growth low, and be free of unfair dismissal constraints or the imposition of increased union negotiating power. On the other hand, unions are insisting that the legislation should go ahead as soon as possible, arguing that wage claims and job protection are justified because every dollar in the pocket of working families is a dollar that will be circulated into the economy, helping to stave off recession.
Paradoxically, they are both right. The more workers have job security and wages growth, the better it will be for the economy. But at the same time, if individual businesses are suffering revenue loss in the economic downturn they simply cannot afford to pay higher wages without risking their own viability. It is a catch 22, but that is why the most important factor is the capacity for government to invest in economic stimulation.
Despite the ongoing argument about the ethics of taxpayers being forced to bail out a financial system which has been brought down by corporate greed, there really is no alternative. Not only Australia, but around the world the taxpayer funded bailout is the only way to cut the losses and help to restore prosperity. And if we are to be perfectly honest about it, the taxpayers are not entirely without blame for this mess. Governments around the world have presided over regulatory regimes which happily gave corporate pirates the tick of approval and allowed the whole sorry mess to happen in the first place.
That’s why government efforts to stimulate employment are not only essential, they are a moral obligation.