20 Jan 2016
by Jim Rose
in applied welfare economics, economic history, labour economics, politics - New Zealand, poverty and inequality
Tags: Employment Contracts Act, employment law, Leftover Left, rational ignorance, rational irrationality, top 1%, union power, Withering away of the proletariat
The union movement posted two excellent charts during the last election showing how well things have gone since the 1980s economic reforms and their consolidation in the early 1990s.
The charts show that real wage growth returned in the early 1990s after the passage of the Employment Contracts Act and the consolidation of government finances. This was after two decades of wage stagnation in what the unions regards as the good old days.
Furthermore, as the union chart shows, the average incomes of the top 1% in New Zealand is a pretty stable for several decades. Whatever else is happening New Zealand, you cannot blame it on the top 1% because they are lazy. What increase there was in average top incomes in New Zealand was followed by the return of real wage growth in New Zealand and a long economic boom where the unemployment rate drop below 3.5%
The main bugbear is housing affordability which is a result of the Resource Management Act passed in 1993 as the union chart shows. The unions, the Labour Party and Greens all support the laws that result in this housing unaffordability.
19 Jan 2016
by Jim Rose
in Euro crisis, great recession, job search and matching, labour economics, macroeconomics, politics - New Zealand, politics - USA, unemployment
Tags: Denmark, employment law, employment protection, flexicurity, labour market regulation, social insurance, welfare state
https://twitter.com/KiwiLiveNews/status/688503382181449728
My search for an example of how Danish flexicurity might have an advantage over the status quo in the New Zealand labour market is still to yield results. Danish flexicurity is no better than New Zealand and often worse in keeping long-term male unemployment rates down as the charts below show. The flexicurity model combines flexible hiring and firing with a generous social safety net and an extensive system of activation policies for the unemployed.
Data extracted on 18 Jan 2016 21:55 UTC (GMT) from OECD.Stat.
The charts above and below do show is that a more generous social safety net for the unemployed introduced with the onset of the Great Recession in the USA was followed by a sharp increase in the incidence of long-term unemployment.
Data extracted on 18 Jan 2016 21:55 UTC (GMT) from OECD.Stat.
13 Nov 2015
by Jim Rose
in economic history, Euro crisis, labour economics, labour supply, macroeconomics, politics - USA, public economics
Tags: employment law, Eurosclerosis, France, Germany, growth of government, labour market regulation, size of government, taxation and labour supply
10 Nov 2015
by Jim Rose
in business cycles, economic history, economics of regulation, Euro crisis, job search and matching, labour economics, labour supply, macroeconomics
Tags: British economy, employment law, equilibrium unemployment rate, Eurosclerosis, France, Germany, Italy, labour market reforms, Margaret Thatcher, Thatchernomics, The British Disease
Unlike the USA, the German, Italian, British and French equilibrium unemployment rates all show fluctuations that reflect changes in their underlying economic circumstances and labour market reforms. The case of the British, the rise of the British disease and Thatchernomics. The case of German, its equilibrium unemployment rate rose after German unification and then fell after the labour market reforms of 2002 to 2005.
Source: OECD Economic Outlook November 2015 Data extracted on 10 Nov 2015 07:07 UTC (GMT) from OECD.Stat.
25 Sep 2015
by Jim Rose
in applied price theory, labour economics, labour supply, occupational choice, personnel economics, politics - New Zealand
Tags: employment law, employment protection law, employment regulation, fixed costs of employment, Leftover Left, The fatal conceit, unintended consequences, zero hours contracts
This Labour Party link made it very easy for me to submit to the Select Committee of Parliament to oppose the Bill on regulating zero hours contracts. I oppose the Bill for the exact opposite reasons that the Labour Party opposes the Bill.
I encourage others to make a submission to Parliament as well opposing this draft amendment that will lower the wages of workers. My submission is as follows:
I do not support the proposed changes to the legislation governing zero hour contracts in the Employment Standards Legislation Bill. There should be no regulation of zero hours contracts.
Zero hours contracts is creative destruction at work in the labour market, sweeping away obsolete working time arrangements, mostly in the retail services sector. Plenty of new ways of working have emerged in recent years that include the proliferation of part-time work, temporary workers, leased workers, working from home, teleworking and sub-contracting. Employment laws were built on the now decaying assumption that workers had career-long, stable relationships with single employers.
Advance notice of work schedules is always known only to a minority of temporary and permanent employees in New Zealand, and there’s not much difference between that advance notice between temporary and permanent employees.
Critics overplay their hand if they suggest that somehow workers are very much disadvantaged and employers are holding all the cards. Job turnover and recruitment problems are a serious cost to a business. Workers will not sign zero hours contracts if they are not to their advantage.
Unless labour markets are highly uncompetitive with employers having massive power over employees, employers should have to pay a wage premium if zero-hour contracts are a hassle for workers.
The fixed costs of employment are such that you shouldn’t expect zero-hour contracts: you’ll typically do better with one 40-hour worker over two 20-hour workers because of these costs. Zero hour contracts would be most likely in jobs with low recruitment costs and where specialised training needs are low. Workers with low fixed costs of working will move into the zero-hour sector while those with higher fixed costs would prefer lower hourly rates but more guaranteed hours. Again, read lower here as meaning relative to what they could elsewhere earn.
Unless we have a good idea about why firms are moving to zero hours contracts, which we don’t, and why employees sign these contracts rather than work for other employers who offer more regular hours, meddling in these novel working time arrangements is risky.
Employers must pay a wage premium to induce in workers to sign zero hours contracts. This Bill seeks to deny workers the right to seek higher wages.
Feel free to use the above text as the basis for your own submission to Parliament.
17 Sep 2015
by Jim Rose
in applied price theory, economic history, economics of regulation, industrial organisation, job search and matching, labour economics, minimum wage, survivor principle, unions
Tags: Australia, employment law, employment protection law, federalism, labour market deregulation, labour market regulation, union power, unions
10 Sep 2015
by Jim Rose
in currency unions, economic growth, Euro crisis, job search and matching, labour economics, labour supply, macroeconomics, poverty and inequality, unemployment, welfare reform
Tags: employment law, equilibrium unemployment rate, Eurosclerosis, labour market regulation, natural unemployment rate, social insurance, unemployment duration, unemployment insurance
17 Aug 2015
by Jim Rose
in business cycles, currency unions, economic growth, economic history, Euro crisis, job search and matching, labour economics, labour supply, macroeconomics, occupational choice, unemployment, unions, welfare reform
Tags: employment law, equilibrium unemployment, Greece, Italy, labour market regulation, natural unemployment rate, Portugal, Spain, unemployment duration
The boom that preceded the bust in the Greek economy did nothing for the rate of long-term unemployment among Greeks. Long-term unemployment had been pretty stable prior to the economic boom after joining the euro currency union.
Source: OECD StatExtract.
Nothing much happened to long-term unemployment in Italy or Portugal in recent decades. Spanish long-term unemployment fell in line with the economic boom in Spain over the 1980s and 1990s up until the global financial crisis.
12 Aug 2015
by Jim Rose
in business cycles, economic history, Euro crisis, job search and matching, labour economics, macroeconomics, unemployment
Tags: employment law, equilibrium unemployment rate, Eurosclerosis, Italy, labour market regulation, natural unemployment rate, unemployment duration
Unemployment of more than a year was slowly tapering down in Italy before the global financial crisis, but ever so slowly.
Source: OECD StatExtract.
08 Aug 2015
by Jim Rose
in Euro crisis, job search and matching, labour economics, macroeconomics, minimum wage, unemployment
Tags: employment law, equilibrium unemployment rates, Eurosclerosis, expressive voting, labour market regulation, natural unemployment rate, offsetting behaviour, rational irrationality, unintended consequences
05 Aug 2015
by Jim Rose
in economic history, Euro crisis, job search and matching, labour economics, labour supply, macroeconomics, unemployment
Tags: employment law, equilibrium unemployment rate, France, labour market regulation, natural unemployment rate, unemployment duration
Nothing really changes in France recently unemployment duration. Italian labour market is notorious for having very low inflows and outflows from employment and unemployment.
Source: OECD StatExtract.
30 Jul 2015
by Jim Rose
in business cycles, currency unions, economic growth, Euro crisis, job search and matching, labour economics, labour supply, macroeconomics, unemployment
Tags: employment law, employment regulation, EU, Euro sclerosis, Euroland, Eurosclerosis, Japan, labour market regulation
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