From The Pleiades Mailbag - 16/May/2016

Home Ownership Is A Class Thing Now

Here's something from Pleaides. It turns out homeownership as a percentage is declining in Australia, and it's not even a gentle decline.

Worryingly, the relatively modest declines recorded in successive censuses mask a much larger decline among significant segments of the Australian population over the past two decades. In particular, as Chart 2 shows, the home ownership rate among households headed by people aged twenty-five to thirty-four dropped by 9 percentage points (from 56 per cent to 47 per cent) between 1991 and 2011; among households headed by people aged thirty-five to forty-four it dropped by 11 points (from 75 per cent to 64 per cent); and among households headed by people aged forty-five to fifty-four it dropped by 8 points (from 81 per cent to 73 per cent). 

The impact of these quite sharp declines among young adult and middle-aged households on the overall home ownership rate has been largely offset by households headed by people aged fifty-five and over, which now make up a larger proportion of the population. In that age group, home ownership rates are much higher, and have fallen by much less since the 1991 census.

The decline among households headed by young and middle-aged adults since the early 1990s is particularly striking given that mortgage interest rates during this period have been roughly half what they were over the previous fifteen or so years – and also given that federal and state governments have spent billions of dollars during this period on programs ostensibly directed towards promoting home ownership, such as first home owner grants and stamp duty concessions.

The ramification of this decline is listed in great detail, and it doesn't make for encouraging reading. It paints the picture whereby the decline in home ownership eats into future economic growth in more ways than one, and together, will amount to a significant reduction in the health of the economy in the years to come.

Of course, the thing about both the LNP Coalition and the ALP is that they're both wedded to policies that try and sustain asset prices so whatever they might say or do isn't exactly going to impact on the affordability for some time until it becomes the most pressing social problem. There are signs that the environment might be in the front seat, relegating the housing issue to the backseat for some time. 

The World Thinks We're Stupid

It's because we've cut into our science research so significantly, and on ideological grounds. 

ALMOST 3000 SCIENTISTS from more than 60 countries have condemned Australia’s key government science agency over plans that would “decimate” its climate change research capabilities.

The open letter, delivered to Prime Minister Malcolm Turnbull and his ministers on Thursday evening, warns the cuts would leave the Southern Hemisphere

Since news of the cuts at the Commonwealth Scientific and Industrial Research Organisation (CSIRO) emerged last week, leading scientists and institutions from across the world have attacked the plans. 

CSIRO chief executive Larry Marshall told staff in an email, that the agency wanted to shift the focus of its Oceans and Atmosphere division away from climate change monitoring and modelling because the science of climate change was now 'proved'.

His claimed justification for the cuts have been roundly criticised by current and former CSIRO staff members.

If ideology gets you flying square in the face of facts only to get pulverised, then maybe one shouldn't be sticking to ideology so hard. Still, you get the feeling that with this government, this adherence to climate change denialism and retaining negative gearing and babbling on with trickle-down economics of the Thatcherite variety are the threadbare positions that substitute for actual thinking about where we are in history and what problems actually beset our nation.

There's really not much else to be said about all this except we need to vote out this government.

Helen Razer Thinks The Greens Are Suspect Too

It's not that I'm contrarian, more so that the algorithm that describes me in Vote Compass is somehow tone-deaf to my nuanced distrust of the Greens that it amuses me when it tells me my best political match is with the Greens. I guess, you would think that it might be true if you ignored  recent history.

Anyway, Pleiades sent me an email with one of Helen Razer's Cirkey columns, and she too goes through why Vote Compass is ridiculous in suggesting she should vote for the Greens given her position on things.

Vote Compass gets me. I should not simply be a Greens voter but a lifetime Greens member with a Samoan-inspired tattoo of Bob Brown etched on her arse. 

But I’m not. And this is not entirely due to the current possibility that the Greens will trade preferences with the Libs or that they may have done so in state elections of the past. This is not entirely due to the Greens support for their deal with the government on pensions, their stubbornness and myopia on the ETS and the fact that Larissa Waters is a cultural totalitarian who will not rest until all evidence of gender is purged from the shelves of our toy stores. It’s not my revulsion for fashionably named children or the tastefully rustic surrounds in which their Green-voting parents raise them. It’s not even the reclaimed ladder bookshelf; it’s more the Piketty that rests upon it, whether read or unread.

It's a good summation of the things that vex me about the Greens as well. Why in the hell did they behave in the their-way-or-the-highway during the discussions about the ETS? What good did that position do for the environment?

The problem is that the left splinters off into many hues of differences. This might include trenchant marxists through to regressive left social justice warriors (*ugh* vomit) and somewhere in there are the people trying to protect the environment through available policy channels (and let's not forget the regressive types who go with Sea Shepherd - vomit once more). The reason why the Greens are highly suspect is because as Razer points out:

The Greens say “inequality is really, really bad” and speak urgently of change. But they provide no real prescription for the big shift they say, and I agree, is needed. The optimistic leftist might choose to believe that this is because they are cleverly concealing their red flesh. This pessimist believes they are honeydew melons: a mild shade of green right through. Even those who came to the party by way of classical Marxism seem to have paled, believing only the most convenient and optimistic bits about an innovative new era of production. 

It’s true that the Greens provide, for some of us, a refreshing enticement. On the issue of offshore processing, for example, it’s tempting for some of us to throw a protest vote their way. But so long as they choose not to disturb our social and economic organisation, there will always be a group as maligned as asylum seekers. Inequality is really, really bad. It’s also inevitable if you don’t take a hammer to its foundation.
And they don’t. The Greens’ focus is not on constituting our base differently. It’s about reflecting it more favourably. It’s about taking “gendered” toys off shelves, lighting compassionate candles and generally moralising about those who won’t publicly agree that inequality is really, really bad. 

It’s communism. But without the caffeine, or the communism.

I did a quick survey of my friends who want to vote Greens and it turns out they're disgusted with the policy position of the ALP; would never vote for the Liberals let alone Nationals, and ultimately want to land somewhere on the left that is not-the-ALP. And thus the hue of compromise is given to a vote for the Greens. I'm inclined to agree with Helen Razer and say to hell with that.

One could do worse than voting for the Australian Sex Party.

More On Interns In Australia

There didn't used to be this Intern thing in Australia except the medical profession. After doing your 5 or 6 years course in medicine, you would've gone to do a year as an intern at some hospital of their choosing. The relative desirability of hospital assignment depended on your grades as a medical student but in any case, once you finished your last exam at med school, you were sent off to do your internship where 48 hour shifts awaited you.

I imagine this practice still continues because occasionally I read articles about young doctors and their terrible, long shifts. The baseline assumption about young graduates was that they knew enough to be dangerous so they needed seasoning. How being borderline dangerous mixes well with insanely long shifts is anybody's guess but that was the custom and probably still is. I have friends who are nurses who swear and tell me that the intern at the end of one of those crazy shifts is far too dangerous to let near any patients. I've even asked a doctor friend what he remembers of his intern year and he said not much.

But that's how interns are treated by the medical profession. They do however get paid something.
I know I've said this before but the paying bit is important. In my previous job as a Line Producer at the events lighting company, I would get enquiries from people who anted to intern at the firm. I would tell them to come in and have a chat about a real job instead, and if they were willing, I'd sign them up as crew. Many of these young people who simply wanted a foot in the door and thought working for nothing would do the trick. Given our labour laws, I didn't see the bit where it was defensible to hire such people and throw them out there with the crew for no money. It would've been unconscionable.

When I briefly taught at a video production course I was asked about internships. I told the Australian students that if they worked, they should get paid and there was no place for anything so grey and unaccountable as internships in Australia. The point is, I feel strongly about this, as I do about the work-for-the-dole being an exploitative crackpot policy.

If it's real work, then the person doing that work should be paid properly. If they are doing work experience, then they should value the experience they are getting for when they go back to their courses. And intern is worst of both worlds.

View From The Couch - 12/May/2016

What Is It With This Interns Thing?

The worst of American ideas has somehow crept into the Australian labour landscape, audit's perniciously worked its way up to Canberra to the point where they've turned the utterly useless 'Work-for-the-Dole' scheme in to an 'PaTH Internship' programme. This lousy idea is in fact the centrepiece of Malcolm Turnbull's re-election campaign.

It really is a nutty programme because it pays employers $1000 to have an intern around, and then pays the same employe $10,000 when they hire that sam intern. As part of an incentive for the long term unemployed who will become the said intern, their $263 per week money will rise to a mere $364 a week in exchange for 25hours a week of work. This is why you're seeing the figure $4 an hour.

Now it turns out the legal advice is that this can't actually be legal given our laws.

The $840 million program forms a central plank of the Turnbull government's jobs and growth package.It features generous $1000 incentive payments to employers in the intern phase and $10,000 employer payments in the hire phase, raising concerns of a perverse incentive for employers to churn through interns. 

But if the legal advice is correct, the program is not legally sound in its current form and would necessitate changes to the Fair Work Act, or have its subsidies increased to meet minimum wage rates, adding hundreds of millions to its cost.

Illustration: Ron Tandberg

While concerns of exploitation and systemic abuse have been raised by unions and the group Interns Australia, the advice from the firm Maurice Blackburn is the first authoritative argument that it is technically illegal. 

The ACTU argues it "would require new legislation to legalise a second-class category of $4-per-hour workers and remove those employees' basic rights under the Fair Work Act". 

It says fixing the problem to bring interns's pay up to the legal minimum would "blow out" the cost of the PaTH program by $478 million.

It's interesting how the Federal government can't seem to do basic maths in figuring out how the incentives line up. 

• If you're an unethical company, you employ the intern for the required X weeks of free labour and cash in the $1000. 
• The free labour at 25hours is let's say worth the minimum $20.00/hr to round it off = 500/week x12weeks = $6000.
• Then you employ the intern and collect the $10,000.
• If you then sack the person within the first 6months of employment, preferably the first month, there's no recourse for unfair dismissal by the employee so at worst you're going to pay a month of low wages so subtract $2500 from the $17000= $15000 free money from the government.

In exchange for gifting companies $15000, the unemployed person who goes through the 12week internship and then 1month of employment then gets the $2500+12 weeks of 100 dollars =$3700 (minus PAYG on the $2500). If you consider how much more employable the unemployed person is at the end of the cycle - not much - then it's eminently clear that the system favours the unethical employer 4times more than the intern/worker ... Unless of course this is exactly what the Coalition government wants to do - gift free money to companies under the guise of trying to help the unemployed in which case I don't think we've ever seen a conservative government so cynical. 

If there really is $12200 cash to throw around for every unemployed person, there must be a better way of spending it than that. For a start they could hire the same person for 3months directly and give them a government job with real government job experience. 

The Dishonesty Of Governments About Employment

I just want to go over that last bit again. The Liberals and Nationals always say they want smaller government, less taxation. They say this because it appeals to the notion that governments don't do anything well and so any money given to them would be less inefficient in the economy. This construction masks a greater greed motive whereby if a government business or venture actually is any good, they're the same people who want that same service privatised - and of course that means ripping off form the government the bits that actually work and then leaving behind the bits that are less efficient and then blaming the leftover bits for being inefficient. This construction only serves those who construct the argument - a true hallmark of an ideologically loads argument. 

The government can - and probably should - employ more people to do more things. Especially in the context where aggregate demand is flagging so badly and the RBA is reaching near the Zero-bound, which means the private sector can't seem to generate the jobs or profits to power aggregate demand. Governments of both ALP and LNP hues have overseen growing globalisation which has resulted in an overall growth at the expense of giving up secondary industry. You won't hear it from the ALP but basically globalisation has worked its magic in reducing unionised jobs in this country, so it's not like they aren't party to the problem of structural unemployment. 

What is really galling about all this is that unemployment isn't a uniform 5.7% across the country. There are pockets where plenty of people are unemployed, and int those places the government runs these work-for-the-dole schemes far less whole-heartedly than they do in major cities and their suburbs. The administration of Centrelink in such places is effectively a work-for-the-dole scheme; that is to say, working as a Centrelink officer in those regions is an elaborate work-for-the-dole scheme given that there isn work outside of that job. 

At the  centre of all this is the grand delusion that everybody has to be working in a way that maximises productivity and profitability all the time.  Yet the physical reality of space and materials and capital and people demonstrate this is patently impossible. 

I know. It's a weird thing to say but it needs to be said that how we conceive of work in the industrial world was driven by the development of capitalism. The history of labour movements and unions and such come out of the need to humanise this demand and many countries on the planet have found different balancing points to do with what work is in our waking hours. All this stuff of commuting and schlepping and touring and driving and desk-jockeying and lifting and filing and doing stuff for your pay cheque, came about out of industrialisation. And as we head increasingly into a post-industrialised world, it's well worth asking if this schema of 'work', and the 'work ethic' that bolsters the entire culture of it, is sustainable or frankly, meaningful. 

And if the employed people situation looks somewhat untenable, then the ranks of the unemployed look even less tenable. 

We can't distribute work evenly now. 

We can't grow work readily now without significantly high education and training - which costs money. Money which the Coalition Government doesn't exactly want to spend. 

We can't encourage employers to hire people they don't need without gifting them money - which is in fact simply less effective than giving that money to the people that need it. 

Not to mention the obvious fact that we can't just shoot/exterminate unemployed people. 

The thing is, it's the government's job to think about this stuff and figure out what to do. The fact that our election is mired in the same kinds of conversations we've had since at least 2004 suggests we've not advanced in the least bit while the world has moved in to a more precarious period, and we do need to start thinking about all these things. Both our major parties really need to reassess what the hell we're talking about when we say 'work' and how that 'work' is being rewarded.