Tonight’s post provides a few observations on current economic news. I am not giving links where the source article is behind the firewall.
At the moment there is a lot in the Australian financial press about the need for and resistance to economic reform among Australians. If my own reactions are any measure, I fail to see why there should be surprise at people’s resistant to economic change. Now don’t get me wrong, I happen to agree that Australia does need to improve productivity for example, but the reform debate is almost totally contextual, and that is where it fails.
To begin with a semantic point, “reform” simply means to reshape or change. It does not mean change in a positive direction, although the way the word is used and abused often carries that loading. Most if not all change brings winners and losers. When, as in my case, change seems to have damage the things that I care most about, then I become change resistant. Who will benefit from this change, I ask? Who will lose? When the majority of the population comes to feel that they belong in the loser class, necessary change becomes almost impossible.
In a piece in today’s Australian Financial Review, Rachel Nickless reported on the results of a survey of Australian graduates carried out by Universum. Now Universum classifies itself as “the employee branding firm”. Chaps, you have something to learn. As often happens, I tried to check the story against source. This is the Universum web site summary. It gives damn all information, although no doubt the company thinks it pretty! Back to Rachel.
According to Rachel, Universum found that among 8,516 final year students, people and culture contributed most to employer attractiveness. When asked about their career gaols, work like balance came first (61 per cent) followed by job security (50 per cent) and then a feeling that I am serving a greater good ( 43 per cent). At the same time, students still had inflated salary expectations.
These result are broadly consistent with my own experiences. They are part of the problem faced by those mounting a case for economic change on the grounds that this will make the country wealthier or, at least, more economically self-sustaining. This doesn’t garb as an objective, while students are well ware of job insecurity.
In another short piece in the same paper, Andrew Podger looked at the McClure report into the Australian welfare system. Beyond noting that data buried in Appendix G showed that the proportion of working age Australians receiving income support had declined from 25 per cent in 1996 to 18 per cent today. He also commented that Australia had the most targeted welfare system in the world.
I don’t know about that. I do know that our increasingly less generous and more targeted welfare system has actually become a cause of welfare dependence. In more generous days, you could move through the system from dependence to independence. That’s what many did. Today, tight targeting has created a situation where the transition financial costs of improving oneself have become very great. The obvious answer is to further increase restrictions and penalties. You could do a lot more with some relaxation in rules at a not especially great net cost.
I am running out of time tonight, so I want to return to my main theme. I said that the reform debate was almost totally contextual. By that I mean simply that it it is dominated by particular thought constructs and broader ideological arguments on the part of right and left. These do not address the causes of resistance to change. They are simply obiter dicta, things said in passing that appear to provide justification.