The fine print costing Australians a pay rise

By MILLIE MUROI, Economics WriterHidden in the job contracts of about one in five Australians are little clauses weighing down their chances of landing a pay rise or a better-fitting role.They might, for instance, ban you from working for any of your employer’s competitors for a set amount of time – even after leaving your job. Or, they can prevent you from setting up your own business in the same industry. These are called “non-compete”...

Read more >>

Our jobs market is booming, but the RBA needn't be so worried

Despite the economy only just popping its head up after 21 months of “per-person recession”, our jobs market has been going gangbusters. How can it possibly be so strong? It’s this strength that has made the Reserve Bank so reluctant to cut interest rates.This week we learnt from the “national accounts” that the economy – real gross domestic product – grew by a princely 0.6 per cent during the three months to the end of December....

Read more >>

Women still being kept in the home, but not by what you think

By MILLIE MUROI, Economics WriterIt’s a topic that, despite its horrific consequences, makes us avert our eyes, close the tab, and turn the page.Usually, sadly, it’s only when there’s a death that readers – and the click-hungry media – pay attention. But before I lose you, I want to reassure you that it’s not all bad news. And I want you to hear from people who have defied the odds.We already know domestic violence kills one...

Read more >>

RBA is lost in the frightening territory of full employment

The Reserve Bank’s behaviour last week can only be described as bizarre. It’s a sign that it’s lost its bearings and isn’t sure what’s happening in the economy or where it’s headed. What has caused its befuddlement? Our unexpected return to near full employment. Sheesh. Whadda we do now?The way “monetary policy” – the Reserve’s manipulation of interest rates – normally works is that, when the rate of price inflation gets too...

Read more >>

How can jobs and joblessness both be going up?

By MILLIE MUROI, Economics WriterDespite more than two years of higher interest rates, meant to slow down spending and activity in the economy, unemployment in Australia remains unusually low.The nation’s chief number-crunchers, the Australian Bureau of Statistics (ABS), said there were 16,000 more people employed in October, while the number of unemployed climbed by 8000. The unemployment rate stayed at 4.1 per cent for the...

Read more >>

How we measure recessions is wrong. There's a better way to do it

By MILLIE MUROI, Economics WriterOf all the scary words in economics, recession is probably among the worst. Not just because of the bad times we link it with, but because of the way it’s measured.What if I told you the way we measure recession is wrong? Or at least that we need to give it a rethink?The widely used rule for a recession is “two consecutive quarters of negative economic growth”. That means two sets of back-to-back...

Read more >>

How the digital world is getting better at measuring us up

These days we hear incessantly about “data”. The media is full of reports of new data about this or that, and there’s a new and growing occupation of data analysts and even data scientists. So, what is data, where does it come from, what are people doing with it, and why should I care?Google “data” and you find it’s “facts and statistics collected together for reference or analysis”. The advent of computers has allowed businesses...

Read more >>

Good news: our falling productivity is too bad to be true

There are few aspects of the economy on which more bulldust is spoken than our productivity. The world abounds with people trying to tell us that our productivity performance is a real worry and the way to fix it is to cut their taxes or give them a government handout. Yeah, sure.These snake oil salesmen (and they’re almost always men) have been having a field day lately. Did you know that last financial year, 2022-23, the productivity...

Read more >>

Bosses are finding more innovative ways to handcuff their workers

When I joined the John Fairfax superannuation scheme 50 years ago on Wednesday, I little knew my new boss was trying to handcuff me. Fortunately, they were “golden handcuffs”. But these days, bosses use other, more blatant ways to tie their workers to them and stop wages growing so fast.The Fairfax scheme I joined decades ago must have been fairly common among big companies in the years after World War II, when shortages of skilled...

Read more >>

How full employment has changed the economy

This may be the first time you’ve watched the managers of the economy using high interest rates and a tighter budget to throttle demand to get inflation down. But if it isn’t your first, have you noticed how much harder they’re finding it to catch the raging bull?It explains why both the previous and the new Reserve Bank governor have been so twitchy. How, after they seem to have made as many interest rate rises as they thought...

Read more >>

Chalmers should give the RBA an employment target

My trouble is I’m too nice. I’m too reluctant to tell people when I think they’re not trying hard enough. If I had time over again, I’d be tougher on nice young Treasurer Jim Chalmers and his white paper on employment.The Albanese government wants to revitalise our resolve to achieve full employment, but didn’t have the courage to put a number where its mouth is and nominate a numerical target for employment.I’ve been convinced...

Read more >>

Labor sets out its alternative to neoliberalism

If, rather than wading through all the things the Albanese government has decided to do, you read what its white paper on employment actually says, you realise a remarkable thing: it reveals a vision of an alternative economy the government wants to take us to.In recent weeks we’ve seen before our eyes the worst of the economy that several decades of “neoliberalism” – the doctrine that what’s good for big business is best for...

Read more >>

RBA's double whammy: hit wages and raise interest rates

If the sharp increase in interest rates we’ve seen leads to a recession, it will be the recession we didn’t have to have. The judgment of hindsight will be that the Reserve Bank’s mistake was to worry about wage growth being too high, when it should have worried about it being too low.The underrated economic news this week was the Australian Bureau of Statistics’ announcement that its wage price index grew by 0.8 per cent over...

Read more >>

Less competition reduces the power of interest rates to cut inflation

The ground has been shifting under the feet of the world’s central bankers, including our own Dr Philip Lowe, the outgoing chief of the RBA. This has weakened the power of higher interest rates to get inflation down.Like all economists, central bankers believe their theory – their “model” – gives them great understanding of how the economy works and what they have to do to keep inflation low and employment high.They know, for...

Read more >>

It's not the wolf at the door that's driving women to work harder

Why do mothers go out to work? Why are more women doing paid work than ever before? And why are more of those women working full-time? At a time when so many are struggling with the cost of living, it’s easy to conclude that more women are having to work more hours just to keep up. But I think that sells women short.Worse, it’s a fundamental misreading of perhaps the greatest social change of our age: the economic emancipation...

Read more >>

Don't miss the good news among the bad: we've hit jobs, jobs, jobs

Here is the news: not everything in the economy is going to hell. Right now, jobs, jobs, jobs are going great, great, great.The news media (and yours truly) focus on whatever’s going wrong – the cost of living, interest rates, to take two minor examples – because they know that’s what interests their paying customers most.This bias in our thinking exists because humans have evolved to be continually on the lookout for threats....

Read more >>