There is little chance of seeing the minimum wage lowered for purely political reasons. But there is no excuse for paying people to do nothing. Therefore, anyone receiving the dole should be required to perform meaningful, productive work for the hours that would cut out the minimum hourly wage.

Unbelievable that this was written without checking the facts. A simple search for the rates of Newstart will show the figures cited are wrong.
David Leyonhjelm is just another ultra-right winger trying to find some relevance. He is hardly an intellectual.

Of course. It's a law of economics. It's like gravity and thermodynamics in physics. If no-one can legally be paid between zero and $12.10 per hour to work, there simply must be unemployment consequences for anyone whose work is valued in that range. But there’s another law at work here. Most voters are incapable of comprehending laws of economics, physics or anything else that requires adequate capability of the brain. So we are stuck with the problem. Or are we? It’s the politicians who are paid to solve that particular kind of problem. Go to it, Dr Leyonhjelm. I suggest starting a campaign to teach your fellow politicians of how fundamental laws work. They seem to have plenty of unused brain capacity.

We can reduce unemployment by reducing wages, or we can reduce unemployment by stimulating the economy. Unlike Greece and Spain we have unlimited credit, so there's no sensible reason to try to rush to surplus (not that doing so would be effective anyway; Greece and Spain show it isn't).

Tombee,I don't completely agree with your assertions on the hourly worth of some people or age related demographic, and suggest the good senator struggling to remain in the public eye and or, relevant, would likely be seriously overpaid at the suggested rate or absurdity?
Alan B.

Welcome back to the land of Senators Leyno.

I see you have maintained your style of short articles with little depth of evidence.

Your article would be much more informative if you provided:

- How do you define Youth Unemployment in Australia? and

- Do differing definitions and demographics explain far different figures in Japan and Germany?

Especially Japan with a much higher elderly population per capita, strict immigration restriction and low working participation by married women.

On Women see http://noahpinionblog.blogspot.com.au/2011/08/japans-low-unemployment-is-easily.html :

"Many women in Japan do not work. The unemployment rate is the percent of the labor force who can't find work; if a bunch of women say "I am a housewife and am not looking for work"

So if more married or attached Australian women removed themselves from the labour force and became "housewives" Australia's Youth Unemployment Rate may quickly look as low as Japan's.

Obviously the first people who will take a wages cut will be politicians.

The productivity of an MP must be close to zero, or they have negative productivity.

Indeed, the country has been operating for nearly 4 months without a government, (and it could go for 6 months), for no noticeable loss to the country or disadvantage to the country.

I believe many of the problems in this country can be attributed to decisions made by politicians, and if politicians are taken out of any loop, then the country has less problems.

So a wages cut to politicians should be undertaken, as well as a reduction in the number of politicians in the country.

Employment is not an issue, as an immediate cut to immigration will immediately improve the unemployment figures, as well as improve every other aspect of life in Australia.

It is now a time of making a choice between: -

1/ Looking after our young and creating a future for them.

2/ Continuing with the unsustainable rate of immigration.

LOL Tombee
Economic "laws" are more like the godbotherers fairy stories than anything real like gravity or thermodynamics.
Show me a single economic "law" that equates with reality and ill show you some pork in flight.
Economic "laws" are conceived by the wealthy, for the wealthy and for no other reason than to enrich the wealthy at everybody elses expense.

Laws of economics.... I like the Pizza law.

As other have noted the good senator is light on detail/facts. Luxembourg has a higher minimum wage then us and the highest GDP in the world over $100K. however those facts don't help our youth unemployment problem.
It seems there still is enough voters in N.S.W. that can't successfully identify the liberal party on their ballot paper.

Well, apart from Tombee, you have all given the Senator a good talking to, right down to the abusive 'ultra-right' crap that gets hung on anybody who upsets the comrades. I think he makes sense, as usual. I don't agree with him on every little thing he says, but I am glad both he and Senator Day remain in the Senate, as two of the very few experienced men of business and economics in the entire parliament. As Tombee intimates, you are raving if you think employers can pay more than a job is worth to them.

ttbn

If you want to get economic about it, labor costs are usually a small part of total costs to a company.

Labor costs may only be 25% of overall total costs to a company.

So if wages were reduced by 50%, it would only cut total costs by about 12%.

But if you were to cut wages by 50%, many people would not be able to survive, and would have to rely on government housing, government health systems, government education systems, and as they do it in america, government food stamps.

It is estimated that the american Walmart and McDonalds are being subsidised by the american taxpayer by nearly $153 billion a year, because these companies pay their employees very little, and they rely on the taxpayer to keep their employees alive.

http://laborcenter.berkeley.edu/the-high-public-cost-of-low-wages/

Far better to increase productivity, which often means reducing the number of employees.

Most companies seem to be going about increasing productivity through automation and computerization, and unfortunately through offshoring etc.

Either way, there is no need to increase the population, and absolutely no need for immigration.

Unless you want more and more people on the dole in the future.

ttbn,

You miss the point. Instead of reducing the minimum wage to a level where a job currently not worth doing becomes worth doing, it's better to create economic conditions where more jobs are with doing despite our high minimum wage.

Having more cross benchers in the Senate is generally a good thing, and David's previously proven himself to be a force for good despite his dismal understanding of economics (which is shared by Senator Day).

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Cobber,

I think they knew who he was this time. I expect a lot of them chose to elect him instead of the Liberal Party because they disliked Turnbull so much.

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mikk,

It's not that simple. Most economic laws are the result of studying the evidence, are descriptive, and don't favour the wealthy over everyone else. But they tend to be ignored by politicians and the media in favour of dubious conjecture (most of which doesn't even have "economic law" status) which most people think equates to economic responsibility.

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interactive,

Immigration increases the demand for workers as well as the supply of them. We don't need to cut our rate of immigration to create a future for our existing citizens. In fact we could easily increase it. We just have to stop pretending that we can't afford the necessary infrastructure.

Australia has a government, even if you haven't noticed it in the last 4 months!

Aiden,

You should read biology, particularly the part about food chains and sustainability and carrying capacity.

http://www.sustainablemeasures.com/node/33

If, as you say, immigration increases demand for workers (an implausible theory), then we will have to constantly increase the rate of immigration so as to create a demand for workers.

Of course, this leads to total overpopulation at some time.

The country hits a wall.

Not if, but when.

interactive,

"You should read biology, particularly the part about food chains and sustainability and carrying capacity."
I'm well aware of that, thanks.
You don't seem to realise that carrying capacity is not fixed, but is something we can increase.

"If, as you say, immigration increases demand for workers (an implausible theory), then we will have to constantly increase the rate of immigration so as to create a demand for workers."
That's a logical fallacy. I didn't say immigration was the only thing that increases the demand for workers.

Most jobs in Australia are to provide goods and services locally. The more people we have here, the more people need to do that – surely that part's not implausible?

Overall, immigration's effect on rates of employment is near neutral.

Spending is what really drives employment.

If we want to get serious about youth unemployment, stop paying them cash. Half the problem will be solved. It stands to reason that if a kid goes from zero income, or pocket money, to $250 per week, this would be like winning loto to some.

A percentage of their dole should be paid to rent where they live, as this may relive tax payer funded rent assistance. Another to say water, power etc, the rest distributed through a restricted debit card.

Once they find they cant waste the money, their attitudes will change.

As hasbeen has said before, three cans of beans a day and a tent, that will make them stand up and pay attention.

The other issue is educating people where there are no jobs. All that does is extends their school life.

Finally, a radical option would be to channel half of all super into infrastructure projects, with no exceptions.

Hello David,
I have some ideas on how to tackle this problem.
Mine is in contrast to Aiden's ideas and provides a third option.

Aiden's 'shifting digits' approach, where my approach is a 'change the underlying system' approach.

I think the current system isn't fair, efficient, productive or sustainable.

Right now, 2 people fight for one job, which isn't bad because it promotes being skilled.
But the person who doesn't get the job, sits around and does nothing becoming a liability.
The government also pays job networks for their services, employers to provide jobs, job seekers to get and keep jobs... all dead money.
Why not just offer the person a real job, and give him double their dole?

Instead of being a $600+ fortnight liability you structure it so that the work they do (cost now doubled) actually amounts to a 'break-even' situation instead of a dead loss.

You create hundreds of thousands of jobs on things that save the government money.
New national infrastructure projects that create REAL employment opportunities..

I'm really curious to know if this could work.
http://forum.onlineopinion.com.au/thread.asp?discussion=7368

Person cant find work, stress on relationship and family.
Man buys truck and has contract. Company goes bust and risks losing truck while unemployed.
Indigenous person lives in low employment, bad infrastructure area.
Single mum looks to get back into the workforce but needs a job with suitable hours.

Don't give them money for nothing, give them an opportunity to get ahead.
Not a lash, but a carrot on a stick; not a punishment but an opportunity.
Combine the idea with modern technology.
Make it easy for people to succeed.
Create a culture of productivity within the 'unemployed' ranks.
Work and earn training credits.

Our system tries to give everybody a chance to make it to the top.
But there's no safety net for those that fall off the straight and narrow.
For them, it'd be better not spending 500k and 16yrs teaching them how to get ahead in the first place, but simply spending 2 weeks teaching them how 'NOT TO FAIL' overall in life.

[cont.]
One more thing.
I'm really curious about just how well you could teach someone either a task or a skill primarily via an app.
Simulation Training, All Components and Operation information (if equipment) and Safety Training.
And can we take this idea across to all aspects of education and training to massively reduce the costs of training people to become productive, for everything.

Armchair Critic,

I think your last point (Monday, 8 August 2016 10:06:42 PM) has great merit, as I think this 'simulator' training approach could be effectively applied to a great many potential employment opportunities.
I also think such training should be provided by a government agency charged with the responsibility to prepare the unemployed for constructive employment.
I also believe most strenuously that such training should include most, if not all, of those so-called 'training courses' being offered by fly-by-night private training operators who offer such courses as beautician or office-manager etc - which are being offered at no, or little, cost to the individual, as our extraordinarily generous government is footing the bill - on the understanding that some of the cost (ie exorbitance) may later be recouped by the government when the individual is earning more than $54,000 - ie if ever?

With all the hype our State and Federal governments spruik about their concern to provide adequate 'education' services, they collectively have been inordinately quick to abrogate their collective responsibility by 'farming-out' this most important responsibility to the private sector - and in a most irresponsible manner indeed.

Undoubtedly our governments will be counting this spurious expenditure (which is highly unlikely to produce any real 'productive' outcome, let alone any prospect of expenditure recoupment) as 'evidence' of their commitment to 'education'.
What a laugh.

Despite what some want to believe about how well-off Oz is financially and fiscally, I believe most strenuously that a recovery to budget surplus is 'one of the most pressing necessities of our time', and therefore, not only are wages-restructuring and jobs-growth/industry-development essential, but so is the reigning-in of superannuation concessions for the upper echelon, and possibly also some limitations to negative-gearing concessions.
(If Malcolm and Co have the vision - and the cojones.)

Good on Senator David Leyonhjelm for exhibiting some good common sense, and for having the intestinal fortitude to demonstrate the courage and depth of his convictions.

Despite all the suggestions the best way to motivate anyone to find a job, is to stop paying them not to work, because that's is whats happening now. Four unemployed couples living in one house brings in a small fortune, even more when kids are involved, more still when the scam the system.

The number one problem is 'cash', always has been and always will be.

Until we wake up to ourselves we are pissing into a fan.

If there was dole only for the genuinely needy and infirm, working for low wages would be worth it. The dole is too easy to get. Families should take responsibility for unemployed youth. They did it while the kids were at school. Suddenly they can't do it any longer?

And who is going to 'create economic conditions that will create jobs'? Not governments. They are always going to create 'thousands of jobs', raiding the public purse on that pretext. What happens? Sweet BA, is what happens. Only the private sector can create jobs, and they are not going to do it if there is no economic reason for them to do so. Australians are over-paid and underskilled - those who actually want to work, that that is. Then there is the growing number who do not wish to work, and never will work while the dole is available.

As for more immigration forget it. It is a statistical fact that high immigration reduces the individual wealth of all.

"However, when it comes to paid work, it is illegal to work and be paid less than the minimum wage. This is $12.10 at18, $14.60 at 19, $17.30 at 20 and $17.70 if 21 or older. For casuals, it's over $22."

That's true, but there are work opportunities out there that do not fit that criteria, one of them is known from this link > http://www.bepaidtowalk.com.au/

I do some of this work, and I guarantee its no where near the minimum award rate per hour purely because of the nature of the work. I have payslips to verify this. But they get away with freely advertising it here in Australia.
According to the dept of human services, its known as "piece meal" work. Been going on for years already.
Its what the unemployed can do who are fed up having to live of a measly $536 per fortnight because they can't honestly find a job!
Trouble is it starts becoming very counterproductive once you hit the $100 a fortnight cap and starts eroding your Newstart allowance on sliding scale.

Maybe you and/or your senate colleagues could do something about this economically ridiculous $100 cap before Newstart allowance gets eroded. Kinda defeats the purpose of even participating in any form whatsoever in the labor market. So is any work better than no work??

Even if one is being paid the measly rate that "paid to walk" work provides, does it not look favorable on one's resume when applying for jobs? It provides and impression to potential employees that one is not lazy!

David is very right about one thing:

People who ask for nothing and accept nothing from the state, should never be told by the state how to conduct their private affairs and the contracts and transactions they arrange among themselves.
(but note that I am not referring to companies here because unlike individuals they beg the state for incorporation)

However, isn't money all that really matters for one who, despite all lofty ideology, is happy to accept a hefty salary and perks off our tax-money and then when it comes to crunch, when it is time to show leadership and represent the destitute people who elected him in their hour of need and despair, is willing to betray both them and his own conscience, cooperating instead with the regime in order to avoid a $180/day fine?

The fundamental flaw in our pay system has always been in that one is paid for how long it takes to do a job, rather than how much work one gets done in an allotted time frame.

Some people are simply not worthy of the minimum wage.

As for getting them into work, you don't motivate people into the workforce by rewarding them to not work and there in lies the main problem. For a kid to go from zero to $250 per week is living the dream for many.