John Howard hates working women. Still.

While I wait for my maths converter to set itself up. I caught the latest article by Gittins in the (otherwise not-especially-useful-but-pickings-are-slim) SMH.

Discussion of concepts such as Full Capacity, Full Employment, Natural Rates of Unemployment and Potential Real GDP don’t often find their way out of first-year Economics classes, so it is nice to see one in a newspaper. Essentially the point is this: when you are at capacity (i.e. actual GDP = potential GDP), you will not get new jobs from increasing Aggregate Demand, which increases GDP.
What is needed are policies that increase potential GDP (also known as policies for Long-Run Economic Growth).

As it happens, Australia is – once Gittins removes from consideration the farming sector, which tends not to do much for job creation – pretty much expected to grow at what is pretty much considered potential real GDP. In comes the interesting part. The government/Treasure need to work on supply (of labour), not demand. Thus:

Treasury says that any employment creation occurring in our present circumstances will have to involve adding to the potential supply of labour – to labour utilisation – not just to the demand for labour.

“This may come about, for example, through raising the labour force attachment of older workers, providing assistance for people with disabilities to enter employment, or employment of indigenous Australians who would otherwise face a life of passive welfare dependency,” Treasury notes.

“Another avenue is to increase the size of the labour market through immigration of suitably skilled workers.”

What catches the eye is this discussion of properly-managed immigration (the idea of which, under this government, is frankly laughable), but notice also the people that Treasury is talking about getting in the workforce: the elderly, the disabled, indigenous people. All people otherwise draining Treasury of welfare payments of one type or another. What better than policy to get them paying into the Treasury rather than taking out of it?

I’m not compaining – if this or any other government can come at all close to doing something about the state of Indigenous Australia they’d have my vote. I don’t see John Howard getting far down that road. Ever.

What I noticed first in the Treasury statement (and that upon which Gittins comments and closes), is the absence of the large, qualified pool of non-participating workers in Australia: mothers. It strikes me that just about every tax and workplace relations law in our country actively or passively contributes to the marginal cost of women (re)entering the workplace. Ever since his first Family Tax Initiative.

So here we are with more women going in and out of higher education, no real policy for imbuing our indigenous people with skills, let alone qualifications, more alacrity for locking asylum seekers up in the middle of the desert than for integrating them, and crying poor for skilled labour. And here we shall probably remain (although there is an election looming…more on that soon).

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