Friday, May 13, 2005

Our Unemployment Problem


... but, hang on, don't we have the lowest unemployment figures in 30 years? What problem? If unemployment is so low, why is it that Peter Costello feels the need to be pushing people off unemployment benefits and on to work?

The answer, briefly, is the participation rate. Today's age on this topic didn't give the parameters, but it did give the final accounting : 64.5%. Let's just assume the statisticians know their business, although I have heard compelling arguments that the "potential workforce" is itself calculated to exclude many people who you might not expect.

It's not the 5% - odd unemployment rate that should be bothering us. If that meant that 95% of people were working, we would be laughing. The problem is that people aren't even bothering to try any more.

Peter Costello's solution is not the only one. As Kim Beazley said, "These things can be done carrot-ly as well as stick-ly". I have said before - this is a stick-only solution.

The philosophical issues surrounding this are clear. The problem is real. The participation rate is low.The solution is one-sided, and does not appear to gave good, evidentiary backing behind it. I have not read any claims by the media or the government to the effect that they have any knowledge of whether their strategies are likely to be successful. It's hard to believe that something so important could be made in an entirely un-informed way, but at the very least the debate has not been framed in these terms.

In order to have a properly reasoned debate, the public need the same information that the treasurer has used to come to this decision. The key pieces of information missing are likely to be: reports on similar policies in other countries; reports on alternative policies in other countries; a proper framing of the treasury analysis of the effects of the policy; a forum for public debate in order that people can understand and come to terms with *why* the problem is so severe, and *how* the proposed solution addresses the issue.

A properly reasoned argument made along these lines could go a long way toward easing the concerns of the public that the treasurer is merely cashing in on an easy policy whose effects are unknown. When targeting the weakest, poorest people - the unemployed and the disabled - there should be not the slightest doubt that the policies being enacted have been fully analysed, with compelling evidence for their success.



Blogger Andrew said...

Though few policies are properly analysed to see if they are successful or not.

7/11/2005 01:58:00 PM  

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