I agree that the resource boom is contributing far more to current low unemployment than the government’s IR laws. But labour market programs alone cannot eliminate unemployment – they don’t create jobs, though they may help to suit the unemployed to the jobs that are available.

Surely recent experience suggests that, in Australia at least, neither the left-wing solution to unemployment (spend more money on employment programs) nor the right-wing solution (deregulate the labour market) is sufficient by itself to deliver full employment.

The best way to cut unemployment is strong and sustained economic growth. One of the most pleasing things about our recent labour market trends is the sharp drop in long-term unemployment that that had seemed so intractable in the 1990s.

Australia experimented with extensive labour market support programs with “Working Nation” in the 1990s, with mixed success (http://www.dest.gov.au/sectors/training_skills/publications_resources/profiles/nbeet/esc/)

Depending on where the bottlenecks or impediments to labour market participation arise, either or both of deregulation and labour market programs may also help the unemployed to take up positions, or encourage employers to take on more employees.

Billie is right that the official employment numbers include those working far less than they’d like, and exclude discouraged job seekers who’d like to work but weren’t actively seeking work in the reference periods. This has been the case for a long time and is not a result of recent government attempts to massage the numbers, as JamesH infers. It’s also consistent with international standards.

The OECD estimates unemployment rates on a standardised basis for all its members, and Australia fares relatively well, though not quite as well as Denmark. However, other OECD countries with interventionist labour market policies, such as Sweden and Finland, have higher unemployment rates that Australia’s.

Continuing *growth* isn't required for full employment; you can boost demand for labour even in a receding economy by cutting labour costs and/or preferring labour-intensive to capital-intensive investment.

Industrial relations reform attempts to cut the cost of labour by making it easier to sack people and reducing the relative bargaining power of workers. It's ineffective and unnecessary in a growth period. Why not save it for a bust?

Technological development has markedly improved labour productivity. It can be a mark of a successfully adapting business that it lays off workers; many such businesses are likely to hire again before long. Layoffs are also a convenient way to keep wages low and the labour market fluid. It is in this context that economic growth is necessary to keep employment high. But such productivity improvements, while large, are limited in the larger economy.

In service industries, increasing the productivity of paid labour often means making customers do the work. In agriculture, it means unsustainable mechanised chemical- and water-intensive monocultures and short intense bursts of unskilled seasonal labour. In manufacturing it means mean ever higher-value products and ever-increasing automation. The wealthy English-speaking countries seem to have given up on secondary industry, but high-wage, high-quality, stringently-regulated manufacturing remains strong in several countries including the Scandinavian ones, Germany, Japan and Korea, while wages and standards are rising fast in low-wage manufacturing economies.

There is always a trade-off between labour productivity and the productivity of capital investment. If full employment is a goal of public policy, the simplest way is to tip that balance in favour of labour with regulation or subsidies.

If certain segments of the population appear unemployable and it is a public policy goal to get them into work, then government must direct investment in their direction. This may mean training, or installation of access ramps. It may also mean encouraging employers to take part-time workers if people who need work find the pressures of a full-time job too high, and it may mean subsidising otherwise uncompetitive businesses in remote locations. It would beat the dole hands down.

What became of the CDEP?

The Australian Council of Social Service (ACOSS) and other commentators have estimated that by taking into account "hidden" and "underemployment" the real level of joblessness is approximately double that given by the official data.

Even the ABS's Labour and Statistics Branch acknowledged in 2006 that the official unemployment rate alone may provide a misleading picture.

Unfortunately, no Government will change the way unemployment is measured if the "number" is higher. B

But until the Government is honest with the electorate, the problem of joblessness will not receive the attention that it deserves.

See: Saunders, P. (2003) 'Lies and Statistics - It is easy to fudge a low employment rate (PDF 48kb)', AFR, August 16-17, p. 71
http://www.roymorgan.com/resources/pdf/papers/20030801/AFR%20-%20Lies%20and%20statistics%20-%20easy%20to%20fudge%20low%20unemployment.pdf

At first, Mr Seibert claims that Work Choices is not responsible for job creation but later concedes it encourages employment "by devaluing the economic worth of the unemployed, by forcing them to accept inferior terms and conditions of employment if they want a job."

Apparently, the author thinks that the economic worth of having a job is inferior to being unemployed. Go figure!

Mr Seibert believes the solution to unemployment is for Australia to be more like socialist countries such as Denmark. It is true that socialist countries can provide full employment, there was very little (if any) unemployment in Soviet Russia. Around one third of the Danish workforce either works for the govt or govt owned businesses.

But is this the kind of society we want? Surely people would prefer to have productive work since productive work pays more. Not surprisingly, labour productivity growth is higher in Australia than in Denmark and therefore it is likely that average Australian wages have grown by a greater amount than in Denmark.

While the author highlighted the benefits of the welfare state, he failed to mention the costs. Denmark is one of the highest taxing countries in the OECD (around 51% of GDP) and as a consequence of this and its generous welfare, Denmark also has high effective marginal tax rates which discourage people from working. The proportion of long-term unemployment is higher in Denmark than in Australia.

The author suggests that an increase in labour market program expenditure can be funded by the budget surplus. Surely a better approach would be to give the money back to taxpayers. This would encourage people to work and invest thus creating more job opportunities and further reducing unemployment.

Finally, Mr Siebert has forgotten that Australia has already experimented with active labour market policies in the 1970s to mid-1990s, and guess what? They didn't work. It was not until they were (mostly) scrapped and the labour market was deregulated that we finally got the unemployment rate back to where it was in the mid-1970s.

The Nordic countries have one distinct advantage. No sun, sand and
surf to amuse people, as an alternative to working. They might
as well go get a job.

I recently read an article on unemployment in various areas. It
seems that in those areas where the surf is pretty good,
unemployment is quite high!

With 90 billion$ spent on welfare, it seems to me that Aussies
have it so good, that employment is basically optional. If there
is not a cushy job within a few minutes of where they happen to
be living, why bother looking further afield?

I wonder a couple of little thoughts crossed my mind with the authors comparisson to Denmark..

What unfair dissmissal laws are applied in Denmark and what % of workers are employed in small business in Denmark.

Those two factors, which the author chose to not address, have a huge relevance and impact on employment figures in Australia. How about a comparison of laws and effects of those in Denmark. I reckon any unfair dismssal laws in Denmark would equate with those under Workchoices and a much much smaller % of Danish workers would be employed by small businesses.