Nice article Fred,

I agree with many of your points.

Being an employer myself I have adpoted a business model that remumerates my staff with wages and benefits substantially higher than normal market rates. I run a lean management structure with virtually no heirarchy and have found that I my business has grown stronger than I ever anticipated. I have had virtually no staff turn over and take genuine concern to nurture the happiness and wellbeing of my team.

Perhaps the type of business I run lends itself to this type of model more than others, being a finance broker, however I rarely see other small businesses in Australia adopt this model given that it works so much better than John Howards harsh and morally wrong methode of paying people as little as possible and working them to the bone.

I can tell you first hand that a well paid, well looked after and cared for team member will produce a lot more economic wealth for your business than a poorly paid, overworked, un-cared for slave ever will. It then stands to reason that the more wealth you are creating the more people you can employ.

Once you factor in the cost of high staff turnaround, constant training of new employees, staff theft due to poor pay, lack of morale due to being treated poorly, the costs of treating people like animals or machines is far greater than paying people a generous wage and providing benefits. The most valuable part; being caring, nice and recognising people, costs absolutely nothing.

Fred your hit the nail on the head when you said that John Howards view is untrue. Taking away peoples hard earned benefits, job security, dignity and trust will do nothing but damage a business economically in the long run.

Very nice article.

I've long been an admirer of the Scandinavian system of Government, and it's good to see someone actually looking at the bigger picture, rather than simply seeing the impressive GDP of the US, and ignoring its growing lower class.
I would not like to see Australia go the way of the Americans at all, and instead adopt a more socially equitable system.

Can I assume, Fred, that you are including Germany's 10.5% unemployment rate as a "strong employment outcome" from a "nordic" country?

Great story, pity about the facts.

Perseus -
For starters, Germany isn't a Scandinavian country. Secondly, the German economy has traditionally performed very well for a nation its size, though it is currently in an economic downturn - which happens in all countries from time to time.
Thirdly, unemployment is a difficult figure to quantify, as the author has pointed out.

Do you include those with part time work, looking for more? do you include retirees? students? part time students? those unemployed for less than two months? Those aged under 18? People with disabilities? If not, what kind of disabilities qualify? Those who care for children? How old do the children have to be? Those who look after someone with a disability? Those who do volunteer work instead? Those who are doing 'work for the dole' kind of practices?

If you'd like to dispute the facts, then fine, but please make sure you are referring to the Scandinavian countries the author is referring to, and kindly include some facts in your response.

Perseus, the terms Nordic and Continental are short-term words I used for presentation purposes. Germany is included among the Continental countries (with France, Italy, etc). Please explain what you mean by "pity about the facts".

Economic theories are manufactured in a greedy selfish mind set. I see everyone is riding the unemployment wagon, now if you were to look at economics from a different angle you would see there are no unemployed people, economic managment is about having a surplus workforce of around 10% but the manufactured figures say 6%, now if we blamed those people who invent Jobs for not creating enough jobs, we would see the surplus workforce as a good thing for the economy it would keep wages down, when you have a ecomomy that supports full employment {110%} wages then rise faster than anything else, surplus workers would no longer be bludgers , they would be like extra stock in the warehouse, I often wonder who came up with "unemployed worker" when the truth is they are surplus workers, maybe that happened the same time Landlords acquired tenants to pay off the mortgage , this is now widely discussed on the Net, many are calling landlords and money lenders parasites, when you think about it, you have to agree they do act like parasites, moneylenders charge rent on money we call it interest, this is all legal, how many Judges and Lawyers are collectors of interest /rent, there is the answer, we call the surplus worker, "unemployed, mangotree

I am living with the outcome of government and opposition policy to offshore jobs and to encourage skilled migration.

Background: In 1992 one in four dollars spent in IT was spent by Telstra, since the early 1990s most organizations that employed large numbers of programmers have outsourced their IT departments which has led to higher costs, less flexibility and less control over their information.

Alexander Downer was reported in the HeraldSun in Dec 2001 as saying let the IT jobs go to India as IT salaries in Australia are too high. News flash: IT graduates start on $35000 per annum. IT project managers claim Indian programmers often bill multiple projects and “can’t work in an iron lung”
On 2nd August, Sharan Burrowes, President ACTU, said that she was in favour of offshoring jobs when the costs for telcos were lower but not if skills were lost.

Since 2000 only 20% of IT graduates from the top universities could get jobs in IT but this was easily disguised because Australian government statistics don’t have a category for IT graduates, they are counted as science, business or engineering graduates. Universities are not going to tell fee-paying students that their employment prospects are bleak.

The Australian government paid the Australian Graduate School of Management $12 million per annum to investigate the IT skills shortage.

There is evidence to suggest that labour hire companies get higher fees from placing migrants on visas in jobs rather than local hires.

Professional engineers appear to be in the same situation. Australia’s skill base is being eroded and its such a waste to burden people with long years of study and debt they can’t pay off!

The OECD country survey 31-7-06 views the workforce participation rates of Nordic countries as best practice and Australia has 50% lower rates for older workers.

Last month, the OECD published the standardised unemployment statistics for its member countries:
Australia - 4.9%
Denmark - 3.9%
Finland - 7.6%
France - 8.8%
Germany - 8.9%
Netherlands - 3.9%
Norway - 3.7%
Sweden - 6.5%
As the name suggests, these statistics are calculated on standard criteria. However, as the author noted, these can easily be distorted by the number of discouraged workers and the number of workers on disability pensions. Furthermore, Germany's unemployment may still be heavily influenced by its reunification. With that said, the statistics suggest that some Nordic countries have very low unemployment, other have higher than average unemployment.

I'd like to commend the author for accurately describing the working of the Scandinvaian of social democracy. It is not a work-optional society. As was noted in this weeks Economist, both Denmark and the Netherlands struggled with unemployment until they introduced relatively aggressive work-to-welfare/training legislation.

On the issue of investment in people, Denmark, Sweden and Holland all have extensive and long-standing school voucher programs that have proven to be highly effective. School choice and school vouchers in particular have been vehemently opposed by the Australian left.

I point to these issues to illustrate that the apparent success of the Nordic model cannot be used as an endorsement for the Australian left. Providing the best quality education to all should not a left-right issue and clearly work, not government hand-outs, is the best means to ensure prosperity.

In response to Daniel06,
Many of the points you raise re the short-sightedness and long-term problems with mistreating good employees can be reconciled with the recent IR reforms. As you quite rightly point out, market forces and commercial necessity will protect the vast majority of good employees even in the absence of strict regulation. Furthermore, the new regime will afford protection to employees who take a punt on the long-term unemployed and the young. The IR reforms should only be of detriment to bad employees who are now easier to dismiss.

I think in many ways, it's apples and oranges. Just from my own experiences of travelling, I don't think I'd want to live in any European country, including Scandinavian. They all live in apartments the size of dog boxes, own nothing, and rely on the state far too much. I know everyone touts Sweden and Finland as having really high standards of living, but it just doesn't seem that way to me. I'd like to see a "Dog Box vs Quarter Acre Block Index".

It also seems to me that whilst there's a lot less inequality, there's a lot less social mobility and entrepreneurship at the individual level, which seems indicative of Europe in general. That doesn't seem particularly appealing to me.

Also, it's worth pointing out that these countries have smaller populations that are homogenous and there is a massive market (Europe) on their doorsteps for their high end products and services. So, it's considerably easier to occupy that niche.

Shorbe, some of your points are valid but you are dead wrong in saying that the Nordics have lower social mobility. If you read the literature (summarised in my recent discussion paper on Equality of Opportunity in Australia, April 2006), you will find that the US and UK lag well behind the Nordic countries on income mobility. And the main reason is that the Nordics spend heavily on social investment to equalise education, health, housing and employment opportunities.

The GINI index measures economic equality within countries and some examples are: Denmark 25,Sweden 25,Norway 26,Finland 27, Germany 28, Austria 30, Netherlands 31, Australia 35, Ireland 36, U.K. 36, U.S.A.47 (The lower the figure,the more equal).
The Forbes overall tax burden index or Misery score is: Denmark 121, Sweden 151, Norway 132, Finland 127, Germany 130, Austria 144, Netherlands 123, Australia 98, Ireland 90, U.K. 111, U.S.A. 116. Australia, Ireland and the U.K. seem to be doing OK all round.
Is Fred Argy answering a question that nobody asked?

freddy: What's that mobility worth though if you're taxed into oblivion by the government and you ultimately don't own anything (especially the place you live)? I personally don't consider that a high standard of living, even if the Scandinavian governments do pump a heap of money into health and education.

That's why I want the Dog Box vs Quarter Acre Block Index. I know things are far from perfect here (especially regarding current levels of personal debt, the affordability of housing compared to the past, etc.), but if you ultimately owe your high standard of living to the benevolent hand of the state, then it's a bit of an illusion I think because what it gives with one hand, it takes with the other.

The last time I looked at this issue the cogent point raised (which Fred addresses) is that the overall GDP cost of the Scandanavian approach to unemployment and social disadvantage is actually lower than the Anglo approach, ie, this aspect of the Scandos approach is actually more cost effective than ours.

In this context it seems to me unrelated to tax levels or IR systems.

Shorbe,

European houses are small because there is not much space. The Netherlands has only a million less people than Australia and is half the size of Tasmania. Land is very expensive and building up is the cheap option. The ultimate luxury in Holland is to live in a "bungalow", a house without a staircase.

The fact that almost everyone in Australia can live in a house with a garden (and the nice climate) goes along way towards our low misery index.

Cost effective is a really nice word when it applies to good "social investment" strategies which work harder to give meaning to being a nation "inclusive" with a whole social strata.

I look forward to your next article Argy, and I found the comments excellent as points made in "checking" against the opportunity we are loosing in Australia, while we continue to ignore our all-of-nation-knowledge.

Social Capital is another factor that binds a nation-economy. It could in Australia, given we have the people and technology, help bridge the lines as suggested above; where it is said that Nordic Communities have closer geographical ties which make it easier for them.

I believe Australia moblitiy has improved much since the debates of the "lucky country" .. but I feel the divide in knowledge, skills and income is occurring wider than what should be tolerated by those that have a chair to say.

If I were PM, I would take on board the facts under-written in this article and demand a revision of thought - back to the late-1970s. This is when I felt Australia was debating "good" and "innovative" public policies, and where there was a real suggestion of engaging more people on community development aspects through "public works".

Instead - we are using our unemployed with a harsh-stick, we-use-them-when-we-need-them... especially low-skilled... and then we abolish-the-programme, displace-those-workers (rather than reward them with fore-thought-through another useful development... A reminder for each displaced worker, they are "no-one" in a country that fails to address their value.

Look at CYPLUS in Cape York, the way Aboriginal workers (people I know) were used to engage their communities in various - new - "programmes" - then once their "cultural social capital" (liaison protocols) were transferred... they were told there is "no more funding for their jobs".

The CDEP (recent events) appear to be the same. Little thought preparation for the young families isolated in these communities.... (the-ones-already-at-risk!)

We have a bi-polar situation in all areas of government when it comes to strategies that suit social policies of the day in employment.

Freddy, I assumed that when you included Austria in your list of Nordics that Germany would be there as well. It seems the term nordic is, in this case, to apply to any country with data that supports your argument.

And it must be said that Norway cannot be lumped into the same category as Sweden or Finland because it has a small population and a great deal of OIL. Their low unemployment rate of 3.7 % may have quite abit to do with the fact that they export their unemployed. Norwegians can access free education and support, fully funded by the state, for courses anywhere in the world.

And it is no surprise, then, that here in sunny Queensland we have a large cohort of Norwegian "students" of all ages who combine lifestyle choices under the education umbrella.

To suggest that such a policy could or should be implemented in australia would be a recipe for a Balance of Payments Deficit of astronomical proportions. Oil exporting nations have strong motivation to export funds to manage exchange rates so other domestic industries can remain competitive.

But when we have that problem here, then, by all means, make the suggestion again.

Perseus, the terminology I used (Northern European, shortened to Nordics) was the one used by The Economist ("Intricate workings" July 13) and the countries included in the Nordic group are the same as those selected by the conservative Economist, which drew very similar conclusions to mine. So I am in good company. Give up Perseus on this point. There are far more important issues to debate.

On your other comment, please note that according to the OECD July 2006 and using a “commonly used definitions” basis, Sweden had an unemployment rate of 5.8% in 2005 and the estimate for 2006 is 4.2%. The comparable figures for Australia are 5.0% and 4.7% and for USA 5.1% and 4.7%. Sweden also currently has a high ratio of employment to working age population, an external current account surplus of 6.7% of GDP (compared with big deficits in US and here), a budget surplus of 2.2% of GDP (larger than Australia's and compared with big deficit in US), a positive household saving ratio (ours is negative), an inflation rate below ours and a growth rate in real GDP per capita which (on the last count) exceeds ours. And I could give you similar statistics for the others. The Nordics do really have successful economies to match their low inequality and high social mobility. That does not mean I would prefer to live there than in sunny Queensland.

Perseus, shame about YOUR facts. Germany is not a Nordic country. These are only Denmark, Sweden, Norway and Iceland (and sometimes Finland at a pinch with its non-Nordic, Uralic language). And also in another post, you seem to think that the Normans took England from Celts; no, they took it from Saxons (and Danes who had taken northern England from Saxons) who in turn had taken it from Celts about 500 years earlier.

Perseus,
To be classified as "employed" in Australia, you only need to do one hour of work per week - and that doesn't even need to be paid work.

To be classified as "employed" in Germany, you must be working more than 18 hours per week.

Furthermore, if you are working say, 19 hours per week AND are seeking to work more hours, you are classified as "unemployed".

Apples and oranges?

Re: Apples and inaccurateness

Terrific "Wobbles" .... am still laughing - TA!

I take your point, freddy, but cannot agree on the issue of comparing household savings ratios. This on-going fetish of australian economists in continuing to lump household capital expenditure in with consumption is plain illogical. It may make sense in a country like the Netherlands where home ownership is low but in Australia home ownership is the primary wealth creating (saving) strategy.

And the shifting of retirees to SEQld after selling their higher priced house in SydMelb is proof that house buying is a well established savings/investment strategy, not consumption. And it is such a major portion of total savings and investment that it cannot continue to be treated as consumption. Especially when doing international comparisons.

It is my understanding that the French include a notional income of home owners, net of mortgage debt, in their calculation of GDP. Do you have any thoughts on this?

Perseus, I would need to check my facts but I think the OECD uses the ABS definition of household saving as income less consumption. Consumption includes a lot of spending on consumer durables like cars but not housing. Still, I agree there is something arbitrary about how expenditures are classified.

Another problem with household savings is that "income" does not include capital gains (which have been huge in Australia in the 90's). This is a standard national acounts approach and for some purposes such as evaluations of the impact of changes in household savings on the "real" economy and on the external account deficit (saving less investment), it is the best measure. But if one is trying to evaluate changes in the net wealth of Australian households and their capacity to absorb further debt, the conventional measure tells us very little.

As I said, I might not have all my facts straight.Perhaps someone can further enlighten us.

Yes, curious how an increase in share price is saving but payments of principle on a pre-bought store of wealth (a house), is not.

It would seem that the character and scale of this distortion is too significant to leave unaccounted for when making international comparisons. Is a grey nomad who has sold the house for a winnebago a self funded retiree or a consumer of capital? And does the kids perspective on this differ to that of the nomad?

gusi: I realise Europe has a higher population density than Australia, so land is in shorter supply. However, that still doesn't make living in a dog box any more acceptable or attractive.

Regardless of that though, a look (from Wikipedia) at the population densities of the Scandinavian countries compared to Australia reveals the following, in people/square km:

Australia: 2.6
Iceland: 2.9
Norway: 12
Finland: 15.5
Sweden: 20
(United States: 31)
Denmark: 126 (presumably not including Greenland)

With the exception of Denmark, the rest of Scandinavia is hardly struggling for space, so why the dog boxes? Cheaper to heat perhaps? It still doesn't seem very attractive.

If we look at the breakdown by Australian states, we get the following:

NT: 0.1
WA: 0.8
SA: 1.6
QLD: 2.2
TAS: 7.1
NSW: 8.3
VIC: 22.1
ACT: 130.9

The last I looked, people in Canberra didn't live in dog boxes, yet the ACT is more densely populated than a whole slew of European countries, including all of Scandinavia. What gives?

Just in my lifetime conservatives have gone from pork barreling to workchoices ,once in Queensland drought or flood saw sugar cane farmers hired to work in local council jobs while income was not good.
Now we speak of lower income makeing new jobs without thinking for a second how wrong it is to condem some to lower liveing standards.
Some where some day we must make up our mind if standard of liveing is not of concern if its not us who suffer.

The current phenomena of labour being hired through labour hire companies rather than being hired directly by the employer is insidious.

the employer doesn't have to worry about compensation payments
the employer isn't responsible for sick leave, annual leave or superannuation
the employer isn't responsible for hiring apprentices that's now the microbusinesses responsibility

the employer isn't responsible for training

This might be OK for people earning $400+ per day, but this mode of employment is also being used to hire the most vulnerable members of the workforce like the cleaners in Coles Supermarkets who gross $500 pw and every other grade of worker in between.

As a matter of principle why should a person or company be paid an ongoing commission for giving you a job. Effectively when the Federal government used Hudson to hire ASIO agents they were paying a third party a premium. Why is this not considered corrupt? Why is this considered more efficient that a public service HR department?

We used to be apalled at the shenigans of the Russian court as depicted by Tolstoy in War and Peace but its here in Australia now.

And Persus when I calculated how much direct tax + GST + recommended superannuation top up of 15% of salary, my disposable income was a lower % than it would have been in Sweden.

Admiral Von Schnider,

Interesting measure, the misery index, I have analysed the correlation between life-satisfaction and levels of taxation per nationmaster website and guess what, a negative .3 result, yep – the more tax the less satisfaction.

I would also observe, the interference by the state in matters which are better left to individuals to decide, results in far less “satisfaction” in a society which endeavours to make all things “equal” for the sake of it.

This is partly because bureaucrats cost money and add nothing to the commonwealth. Managing “equality” at the government level demands the appointment of non-productive bureaucrats and generates a demand for greater taxes without achieving anything, except a greater sense of an individual’s impotence against the power of the state.

Fred
The Nordic model, Australia lacks the fjords, the snow, northern lights and sufficient numbers of saabs and volvos to make it happen, you see, a “viable social model” is far more a matter of historic practice (experienced culture) than it is about (unexperienced) idealistic notions.

Billie
employers were never really “responsible” for training, no Australian employer trained me because I was “trained” before I migrated here, it is up to the individual to “get trained”.

The “employer” will get the quality of staff he is prepared to pay for, he is not forced to continue to pay someone who is not worth the minimum wage.

Re sick leave, annual leave or superannuation, these are merely direct labour costs provided and deferred over time. At least employees cannot lose their accrued “benefits” if they have none accrued with the employer – that is a good thing.

Apprentices are a source of future skilled staff, no employer who wants to sustain his business will forego the development of his future source of productive labour.

I have done a number of jobs with Hudsons (when it was called Morgan and Banks) believe me, compared to the dross which is most civil servants, contractors are worth every cent the get.
Nowadays I supply specialist consultative services to government. I negotiate direct with them, no agent required

No Billie, as a former VP of the Qld Employment Agents assoc, I can advise that the main reason job seekers worked with agencies was continuity mixed with flexibility. They worked for the agency not the company and most really liked being part of the workplace but they also liked being slightly removed from the office politics. If they ended up with a turkey for an on-site supervisor they could simply call the agency and request another position. And this had a remarkable sobering effect on all but the most psychopathic employers. It was not for every kind of job seeker and those who wanted a more stable situation simply stayed on the assignment until they found a better job.

But it also didn't take long to work out who was delivering and who was pissing about and extra effort was always made to keep the best in continuous work. Consequently, employers increasingly recognised where the most contributive people were and switched to using agency people.

And I can also state quite categorically that any employer who thinks the way to fixing their bottom line is to shaft their own work team will not be there for too long anyway. So all these union inspired fears of rapacious managements screwing workers are based on the actions of the small minority of employers who will most likely be out of business anyway in a year or two.

And that is my advice to anyone who is presented with a predatory contract. You don't need that job, it won't last anyway, so put your effort into finding a better employer. And if you must have a job immediately then put up with the conditions for only as long as it takes to find a better job. The employer will soon get the message as it costs a lot of money to replace someone.

Col Rouge you can not become a Chartered Accountant until you had completed your university studies, completed 2 years of professional practice and then passed the exam.

At the moment in Australia more than 80% of ICT university graduates are being passed over for graduate jobs in favour of graduates from India.

Each year in June you would see stunned Telstra employees wondering how they were going to pay the mortgage, school fees wondering what they had done wrong. These poor saps had the misfortune to work in a department that an arrogant pom or yank decided to trim because priorities had changed.

30 odd years ago before you arrived in Australia, large employers [the large organisations] saw at their civic duty to train up large numbers of apprentices and ICT graduates. In fact government departments used to take on 200 ICT trainees or 500 apprentices. In 2004 Telstra hired 5 ICT graduates and outsources or offshores its ICT to India. The Taxation office offshores to India, etc.

In some years all of Australia graduates in particular disciplines migrate to get a job. For example in 1992 [as a result of Kennett] no Victorian graduates from any discipline were hired in Victoria.

Col Rouge if you had studied macro economics more than adding up columns you might be aware that when you cut disposable income then you will drive demand down. Remember that the battlers always spend a higher proportion of their income than the fat cats who can save. So forcing down the wages of the weakest members of the labour market is not only unfair but overall reduces domestic demand thus makes it harder for a business to sell its product unless it can export. But being a pom you are familiar with corporate wealth coming from an export market [the empire] rather than from domestic consumers.

Col, 85% of Australians earn less than $80,000 per annum and the adult median income is $26,000 with $1 in $7 of household expenditure coming from social security payments. Government consultants really should have an idea of how most people live.

Billie “Col Rouge you can not become a Chartered Accountant until you had completed your university studies, completed 2 years of professional practice and then passed the exam.”

In the UK, Accounting Examinations and qualifications are managed by the Accountancy profession, not the Universities. A university degree will give partial credits toward (the lower papers of) professional examinations but not replace them.

Similarly, my Australian Professional qualifications will be partially exempted by a university degree, how much depending on the level, Ordinary, Honours or MBA etc.
Whilst you might have parochial knowledge to what happens in Australia the practices you refer to are not “universal”.

As for your suggestions, regarding macro-economics, I would speculate, any study of yours has never erred to that side of social analysis, however, for myself, it was but one of the 20 papers which I sat on the way to acquiring my professional accreditation.

Very few people were “employed” by Kennett in 1992. At that time the state government were shedding public service parasites off the public purse in droves, following the Cain / Kirner years of incompetence. Doubtless, when the liberals regain power in this state, a similar “Spring (Street) Clean” will be well overdue.

As for “So forcing down the wages of the weakest members of the labour market…”
Artificially inflating the wages of the lower paid reduces their opportunity for employment – simple macro and micro economics principal, no point in employing anyone where the cost of employment exceeds the benefits derived from their labour.

“Government consultants really should have an idea of how most people live.”

If “government” expected me to comment on living standards, you would be right. However, the “niche” in which I supply service is in a totally different arena and thus, such particular knowledge to living conditions would be pointless, unwelcome and seen as interfering.

Col Rouge as the forum asks does high employment mean that we have to have high social inequality its reasonable to focus on the Australian labour market and accountancy is about the only area where passing examinations set in London are necessary for the Australian grading of Chartered Accountant. I can understand why you assume I have no social analysis credentials but actually your dead wrong!

I am pretty indiscriminate in my dislike of arrogant ethnic groups who look down on the older inhabitants whether they be ignorant poms or chattering Indian IT personnel who utter “query” “excel and “database” in the one sentence. No Australian from a top IT university would say that, but I do know accountants who think that’s reasonable.

I would like you to tell me why it is more efficient to have broken up the old SEC which by 1992 had a third the number of employees of 1988 and replace it with a power generating company, and 5 retail distribution companies, 2 of which are rewriting the billing software. You can’t tell me that there are any diseconomies of scale inherent in a market of 2 million customers? NB a third of electricity generated is lost when transmitted 200 kms. Although Kennett was slick about folding the SEC to avoid all the compensation payments to the 25% of LaTrobe Valley workers afflicted by mesothaeleoma.

Is it reasonable to expect contract teachers to draw unemployment benefits during school holidays because they have no income. Do you want your children taught by such vulnerable adults in such precarious financial situations? 10% to 30% of teachers are on contract and 10% are hired at $153 per day and $51 to the labour hire company.

I would like you to tell me why its fair to rear and educate our children to have 80% working crap jobs or no jobs burdened by HECS debt while we import untrained graduates for those entry level positions.

Are you prepared to support these displaced public servants on the dole? Do you expect they will displace other people further down?

billie: Hang on a second. I'm not sure where you're getting your figures about teachers working through agencies.

The rate for a CRT (Casual Relief Teacher -- a fully qualified teachers, not unqualified ring-in) in Victoria is a little over $200/day. The way this is basically worked out, I believe, is that a normal teacher's annual salary is divided by two hundred (ie. forty weeks of term times five days each week), as opposed to 365 (so that normal teachers get paid through the holidays too). That's my understanding of it anyway.

An agency typically takes between 10% and 20% of gross pay. After tax (which you're not including in your analysis, or which you're lumping in with the agency fee -- agencies will get, at most, $20 per day from each employee), if a CRT works a full week, he or she will indeed walk home with about $150/day, give or take, which is more than a full time teacher will get (to make up for holidays).

This arrangement may not suit some, who would indeed prefer steady work, especially during terms one and four. However, it suits many others (eg. people who need the flexibility to look after children or pursue other things), and you're also forgetting that there are twelve weeks of holidays in which to make other money if necessary. Furthermore, in some situations (eg. country schools), you don't have to go through agencies and once you get your foot in the door, you can get enough work. Finally, whilst a CRT has to put up with unruly kids, his or her day ends at the last bell. There are no reports, assessments, meetings, etc. This arrangement suits some also.

Ultimately though, if this arrangement doesn't work and the education system can't keep enough people within its ranks and instead loses them to private enterprise, then the education system will have to make it more attractive for them to stay. Market forces. It's that simple.

OK Shorbe, I was sloppy with my numbers I was counting the money in hand, not the gross.

Mythical high employment rates

From my perspective I see that Australia currently has high social inequality that is increasing and high levels of unemployment and underemployment. The unemployed and underemployed ainclude not only the unskilled, workers over 45 but also include university graduates in fields like engineering, IT, teachers trained at country universities. I we were talking about a small percentage of graduates it would be easy to dismiss them as the individual is unsuited to the position for which they trained but when its more 20% of the graduates then one must look at the whole system.

While Australia continues to define employment as 'one hour of paid or unpaid work in the survey period' then we are not going to take meaningful steps to increase employment rates and reduce social inequality.

Sadly we see that the Australian Census 2006 asks questions designed to perpetrate the myths of
* high employment, refer Question 34
* high community involvement in voluntary activity, Question 51
* nuclear family of dad, mum and the kids - a rare occurence in inner Melbourne, Question 6
* older Australians as a burden to society - questions only relate to study, work or need for care. In fact Australians leave work at 50 and die at 75 thus enjoying 13 years of good health before they start to heavily use the health care system in their last 2 years of life.

The OECD survey that recommends that Australia remove the award system also states that Australia has a lower workforce participation rate for workers over 55 than Scandanavian countries

billie: Many of these problems are self-inflicted in this country.

Firstly, great numbers of people expect to go to university now, whereas a generation or so ago, they simply wouldn't have gone to university but would have done something else. A lot of this isn't helped by outside factors (eg. government and business), but in a lot of cases, too many people end up with degrees for which there aren't enough jobs, but because they have those degrees, they won't do anything "beneath" them. There's a whole subset of jobs in our country that can't be filled, which is why guest workers (including backpackers) can't be brought in quickly enough.

Part of the problem is that the jobs aren't desirable jobs for the average Australian, often in terms of the pay. The trouble with this is that the average consumer wants, for example, cheap fruit, yet doesn't want to pay realistic prices to employee Australians to pick or pack it. It's the same principle behind why manufacturing is disappearing in this country. Sure, trade barriers are part of it, but the government shouldn't have to wave a big stick. I wonder how many people complaining about unemployment, manufacturing moving off shore, etc. in this country have bought a foreign product rather than an Australian made one because of the price, or are contributing to shortages of Australian labour in certain industries, even when there's unemployment here. We can't have our cake and eat it too in this country.

Labour hire is not just ofice staff every day labour hire workers go on to construction sites in jobs once paid at much higher rates.
Not rich mans wages just fair pay in an industy that casts of its workers at projects end.
Now such workers are often paid survival wages only and nothing exists at jobs end.
Please understand by no means is every employer a good boss, the reverse is quite often true.
And casual employment for some is knowing they can never own a home or live a normal life.

Yes Shorbe in previous generations 14 year olds used to start work as apprentices, labourers in factories etc.
But where have all the factory jobs gone?
How many electrical apprenticeships have been offered in Victoria in the last 10 years?
When nurses finish their university degrees how do they get their first job - through labour hire companies.
When Victorian teachers finish their degree how do they get their first job - quite a high proportion have to start as casuals?
How do you start in factory these days - as a casual

Which home loan lenders will loan money to casual employees?

Yes there is anecdotal evidence of plenty of work on the other side of the desert in Western Australia for taxi drivers and pizza hands in provincial towns, seasonal fruit pickers and meat packers.
Do these jobs pay well enough to cover the cost of relocation?
What are your job prospects at the end of the commodities boom?

To get nitpicking about the unemployment figures. How can the Australian unemployment rate be 4.8% when the most populous states have unemployment rates of 5.1%

billie: I'm not diagreeing with you entirely -- I do think this country needs to sort itself out or there will be big problems in the future -- I'm just offering another take on things.

Billie “I would like you to tell me why its fair to rear and educate our children to have 80% working crap jobs or no jobs burdened by HECS debt while we import untrained graduates for those entry level positions.”

Pure hyperbole billie, that’s just the easy speak war-cry. People always have and always will have to find employment in an ever changing employment arena. Nothing remains the same.

“To get nitpicking about the unemployment figures. How can the Australian unemployment rate be 4.8% when the most populous states have unemployment rates of 5.1%”

Simple, the individual (and lower) unemployment rates of other states, most notably WA, when aggregated into a national employment result has a lowering affect. Nitpick all you want but you are just showing your lack of numeracy skills.

As for “But where have all the factory jobs gone?”

Well a lot have gone overseas and since we still have record high employment rates, you can readily assume new jobs in other industries have replaced those which have been “lost”.

As for “Which home loan lenders will loan money to casual employees?”

Home loans for people on casual employment contracts, provided they can produce a letter from the employer advising that the casual nature of the contract is, none-the-less, expected to be “ongoing” and they can demonstrate a history in the activity in which they are employed are relatively easy to arrange (when also qualifying against the usual income, CRA and property valuation tests). Likewise, self employed people can get loans without facing too many hurdles.
(You are welcome to forward the names and phone numbers of anyone seeking home loans for my attention through Graham Young).

ColRouge I have seen the raw figures for graduate employment from various universities. I know how DEST treats those figures and I listen to those raw recruits from India every time I catch public transport.

In the past I have used statistics to distort the figures. Like many economists I believe that the unemployment rate is much higher than the oft quoted 4.8%. The WA workforce is just too small to have that great an effect on the national figures.

Yes, I have a problem with training people for jobs that don't exist and I think that if we had a frank look at our situation then we might find real solutions to building a sustainable society for the next 30 years. We might even be able to train students for the next new fields of endeavour.

billie, I can't quite square your observations on IT "offshoring" and its impact on local IT graduates' job prospects with today's headlines in the IT Business section of The Australian: "National fight for staff".

Some quotes:

"Finding technology-skilled staff, and then keeping them, is becoming an increasingly expensive and frustrating exercise..."

"Budget funding for large scale projects will come under increasing pressure as competition for experienced IT staff dries up the resource pool and drives up salaries and contract rates..."

This is severely at odds with your statement that "Since 2000 only 20% of IT graduates from the top universities could get jobs in IT".

Where is the disconnect?

From my own experience running a software development company, I can assure you that when it comes to talented developers, for at least the past fifteen years there has always been a surplus of demand over supply.

I can also vouch for the fact that many talented youngsters in whose training I have invested time and money have chosen to exercise their abilities overseas, where their skills are even more highly regarded and rewarded.

The simple fact is that offshoring of software development is a passing fad, and the key tasks that require competence will return quite soon. (Note that I can only speak for IT skills; it may be very valid to process payroll, or maintain a General Ledger, or prepare invoices overseas.) This will cause another hike in demand, exacerbate the shortage of talent even further, and programmers will once again be as rich as Croesus.

Pericles “when it comes to talented developers….”

And the operative word is “talented”

My observation, “talent” is the same as “skill” and “Skill” is primarily “technical competence mixed with a determined and positive attitude”.

The challenge Billie is trying to resolve is not that faced by the talented (who are, as you said, in chronic short supply) but the also-ran “just wanna-job-mob”, who believe that getting a piece of ornate paperwork with their name on it is the passport to wealth, riches and the adulation of their fellow man.

Reality is, the paperwork is a key which allows them to apply for a particular type of job, the rest is up to the individual.

Personally, I have always found when people undervalue themselves they end up bitter and resentful but when they hold out for what they think they are really worth, they get better pay and the respect of their peers. It is just – the latter requires that elusive “talent”.

Basically Billie is trying to solve a problem which does not really exist.

According to my reading, 'talent' means devine gift. I've always thought of determination as considerably more powerful and praise-worthy than innate ability - especially when it comes to long term success.

Pericles, I am pleased that the Federal government has decided to upgrade or renew its computer systems as this will increase activity for ICT professionals. There is always a shortage of the truly talented ICT professionals but there is also room for the competent practitioner and perhaps you need to fit the right person into the right hole.

I am not sure if you are one of the many IT employers who try to hire graduates with 18 months experience. If so, your talent pool will be increasing as the government projects get under way.

When I read articles in the IT press I always ask who is the spokesman, and what are they trying to sell? There has been a disconnect between the hype and the reality for a number of years,

Now that discussion of offshoring has entered the public consciousness it is possible to question the sensibility of storing Australian Tax information in India, I bet the Service Level Agreement that the Australian Tax Office has with EDS says nothing about where the information must be stored, because the programming is all done in India.

Likewise we should question whether its in the Australian Defense Forces interests to have Optus [Singtel] operating their communication network. Well with Sol Trujillo in charge of Telstra it probably is the best decision.

I do not want to see Westpac store my banking information in India and I wonder what security breaches this will expose me to. I wonder what happens to those displaced banking staff.

billie, I'm not sure of the point you are making.

>>I am not sure if you are one of the many IT employers who try to hire graduates with 18 months experience. If so, your talent pool will be increasing as the government projects get under way.<<

I have employed students on work experience, I have been the first employer of new graduates, and I have employed seasoned practitioners.

I have had great value out of the first and third categories. Work experience folk tend to be (if you select well) absolutely brilliant, with a wealth of new ideas as well as a work ethic to die for. Seasoned (late twenties/early thirties) talent is expensive, but generally they choose you as an employer for solid reasons - they like the technology we work with, they like the freedom to innovate, or simply like working for a small company rather than a corporate bureaucracy etc.

The straight-from-uni people are more risky. They learn very quickly, which is good, but at the same time are super-aware of their increasing market value. As such, it is difficult to make a dollar out of them, as their "external" value (i.e. their actual contribution to a development project) rarely lives up to their own ticket upon themselves. So it tends to be other employers who reap the rewards of the training and development these individuals have received.

But none of this has anything to do with the fact that a) there is presently an acute IT skills shortage in Australia and b) by and large, outsourced development projects do not deliver the goods, and are gradually heading back onshore.

What I cannot do is reconcile these facts with your position that "[s]ince 2000 only 20% of IT graduates from the top universities could get jobs in IT".

Where are they all? I can't track them down for love nor money.

As for your concerns about where data is stored, as long as the local Australian custodian of the data knows how to provide all the necessary programmatic safeguards, its physical location is largely irrelevant.