June GDP Numbers Confirm Lopsided Economy

This week the ABS released new GDP data, covering the June quarter, which confirm the continuing structural shift away labour toward capital in the distribution of income.

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Senate Testimony on Cutting Penalty Rates

Our Director Jim Stanford was requested to testify before the Senate's Education and Employment References Committee on August 24, 2017 regarding the Fair Work Commission's decision to cut penalty rates for work on Sundays and public holidays in four major sectors of the economy: retail, hospitality, pharmacy, and fast food.

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The Future of Work is What We Make It

Progressives everywhere are grappling with developing policy proposals to improve the quantity and quality of work in our economy, as part of their broader vision for building more successful and inclusive societies. To this end, the Fabians Society in NSW recently published an interesting booklet of policy proposals, to inject into debate within the Labor Party and other fora. One chapter written by Sarah Kaine (Associate Professor at UTS and a member of the Centre for Future Work's Advisory Committee) and Jim Stanford (Economist and Director of the Centre) deals head-on with the challenges facing work, and what can be done to make it better; it is reprinted below.

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The Paradox of Rising Underemployment and Growing Hours

Paradoxically, underemployment and number of hours actually worked are both on the rise in Australia.

Dr. Anis Chowdhury, Associate of the Centre for Future Work, explains how these seemingly contradictory trends can coexist:

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Budget Wrap-Up

Commonwealth Treasurer Scott Morrison tabled his 2017-18 budget in Parliament House on May 9, and the Centre for Future Work's Director Jim Stanford was there in the lock-up to analyse its likely impacts.  Here are some of our main impressions and comments:

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Economists Debunk Job-Creation Claims of Penalty Rate Cut

The Fair Work Commission has ruled that penalty rates for Sunday and public holiday work in the retail and hospitality sectors should be reduced, which would reduce hourly wages on those days by up to $10 per hour.  Business lobbyists predict this will spark a hiring surge in stores and restaurants, as employers take advantage of lower wages to extend hours and ramp up operations.  The economic logic of this claim is highly suspect, however -- especially in light of the fundamental factors which truly limit employment in these sectors (namely, the sluggish growth of personal incomes).  78 Australian economists have signed a public letter debunking these job-creation claims, arguing that the FWC's decision will lead to more inequality, not more employment.

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Don't Pop Champagne Corks Over Longest Growth Streak

On April 1, Australia will surpass the Netherland's old record to mark the longest unbroken expansion of real GDP in modern history.  While this result permits much chest-thumping on the part of some politicians, we should never assume that there is an automatic correlation between GDP growth and the well-being of people, society, and the environment.

In this guest commentary, Prof. Anis Chowdhury -- a new Associate of the Centre for Future Work, and a distinguished global economist -- provides some important perspective on this longest expansion in history.

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Self-Defeating Economics of the Penalty Rate Cut

The Fair Work Commission's decision to cut wages for Sunday and holiday work in the retail and hospitality industries will exacerbate the stagnation of wage incomes in Australia, and undermine the standard of living of hundreds of thousands of workers who are already among the most underpaid and precarious in the whole economy.

Here is a full-length commentary on the decision by the Centre's Director, Jim Stanford, that appeared February 25 in The Age, The Sydney Morning Herald, and the Canberra Times.

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A Ringing but Ineffective Defense of Globalization

Economic elites around the world are rightly alarmed by the rise of right-wing populism, many streams of which (like the Brexit movement and Donald Trump) have directly challenged previous policies of free trade and capital mobility.  Here in Australia, the One Nation party exemplifies some similar isolationist and xenophobic tendencies.

However, the main response of these elites to the challenge has been to simply double down on their standard argument that globalization as currently practiced is universally and self-evidently beneficial.  Apart from temporary "transition difficulties" (that could easily be addressed with assistance for training and relocation), everyone is a winner.  To counter the rise of populism, they urge governments to step up their efforts to "educate" concerned citizens about the virtues of free trade.  Commonwealth Treasurer Scott Morrison made a strong statement in this vein recently to a business audience in Sydney.

Unfortunately, the real world economy doesn't actually work like the theoretical models predict, and denying that anyone is permanently hurt by globalization both flies in the face of empirical evidence, and will be ineffective in countering populist arguments.  Instead, politicians should acknowledge that globalization is producing both loses and winners, and implement policies to reduce the costs and share the benefits.  Here is Director Jim Stanford's commentary on Mr. Morrison's speech, published in the Huffington Post.


The Flawed Economics of Cutting Penalty Rates

It was a "sleeper" issue in the recent election, and led to the defeat of some high-profile Liberal candidates.  But now the debate over penalty rates for work on weekends and public holidays shifts to the Fair Work Commission.  The economic arguments in favour of cutting penalties (as advocated by lobbyists for the retail and hospitality sectors) are deeply flawed.

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