Searching for regional responses for global challenges: Spatial inequalities in the labour market

Emma Allen, CofFEE, University of Newcastle, Australia.

Research has consistently demonstrated that labour markets have had persistent and uneven outcomes across space. Spatial inequalities have been further intensified by the supply side dominance of policy initiatives, and a lack of commitment to generate demand responses in depressed labour markets. Moreover, governments have increasingly adopted an attitude to citizenship that is contractual and obligation based; where citizenship and the rights and responsibilities that accompany it, are contingent upon employment status.

There is however, an emerging demand coming from geographical and economic fields for policy to come to grips with demand orientation and spatial dimensions of labour market inequalities. One option that has been advocated is for the state to offer transitional employment programs and 'job guarantees' for targeted populations. However, recent research indicates the targeted creation of jobs in depressed areas can be compromised, with many of the unemployed residential population being bypassed by more qualified in-commuters. Furthermore, initiatives aimed at increasing prosperity by reinvigorating the region through Entrepreneurial and New Regional initiatives have yielded economic outcomes with significant geographical variation.

This articles argues that what is needed is a universal model that can address uneven geographical labour market outcomes and resolve demand deficiency in local areas. Offering further insight, this article will examine contemporary labour market policies and models from around that world, which have been developed to bridge the gap between unemployment and employment through development of intermediate labour markets and job creation strategies. In addition, the analysis will focus particularly upon the spatial outcomes of these programs. This article will provide critical and practical insight into possible narratives, which may facilitate a more spatially uniform development of effective local labour markets.

Achieving the guarantee: Coming to grips with the sociology of legal guarantees in the context of employment schemes in rural India

Emma Allen, CofFEE, University of Newcastle, Australia and Sony Pellissery, St. Cross College, St. Giles, University of Oxford, UK

In February 2006 the Indian government commenced its five year implementation plan of a broad reaching job creation scheme, titled 'the National Rural Employment Guarantee'. The scheme outlines various basic conditions for employment, including wages rates and guarantees one hundred days of employment for every rural household. However, the implementation of such a program is not straight forward, and all is not as it seems. There are many political processes operating within and around the program, which hinder the effectiveness of its operation as a social protection instrument. This paper will consider the social context surrounding the program and also identify mechanisms which could be employed to undermine the objectives of the scheme. We challenge the current policy model, and put forward critical and practical insights for policymakers to consider, so that the state offer of an employment guarantee may be achieved. Oxford, UK

Great Expectations - migration and labour market outcomes in Australia

Anthea Bill and William Mitchell, CofFEE, University of Newcastle, Australia.

This paper uses HILDA data to examine whether migration reduces local unemployment differentials by helping the unemployed find employment or whether it merely shuffles the unemployed between regions? The paper also considers whether employed residents experience better outcomes in their destination region, or whether labour supply shifts and increased job competition quickly erode the gains to be had? The paper shows that migration per se does little to address unemployment through improved job matching, particularly amongst the severely disadvantaged. Migration also reduced the the outcomes for those previously in employment suggesting some bumping down is occurring in job-rationed labour markets.

'Going Up? Job Mobility and Segmentation in City Labour Markets'

Anthea Bill, William Mitchell and Riccardo Welters, CofFEE, University of Newcastle, Australia.

In the last decade and a half cities have developed a unique potential for economic success, owing to their 'density, diversity and openness to change' (Gordon, 2005:2). By virtue of their scale, networks and advanced service functions cities provide greater potential for interaction and readier access to innovation; they also afford workers higher earnings and greater opportunity to appropriate productivity gains through job-mobility.

It has been argued, however, that the benefits of greater job mobility accrue only to those individuals located in dynamic local labour markets and in growing occupations with 'deep' skill-sets. The flip-side of flexibility (churning) is more insecurity, associated with casualisation and intense job-competition amongst the low-skilled. Such a dynamic may result in different patterns of search and job-transition for those in the secondary labour market, with a process of 'bumping down' leading to an intensification of the spatial and occupational concentration of unemployment within urban areas.

CofFEE research to date indicates that significant differences exist between cities and their non-metropolitan counterparts in terms of the motivations for job search and the nature of job transition, holding other factors constant. This paper attempts to extend these findings using four waves of HILDA data, to examine whether cities do promote greater levels of mobility and whether primary and secondary labour market participants (and older and younger workers) display different patterns of search and occupational transition in urban areas. We also attempt to explore the notion of 'bumping down' with particular reference to recent movers into metropolitan labour markets.

The Looming Workforce Crisis in the Community Services Sector

Ed Carson and Lorraine Kerr, University of South Australia, Australia.

The community services sector is one of the fastest growing in Australia and its workforce is bearing a considerable burden of change, including staff shortages, high staff turnover and high levels of unfunded servicing through volunteers and staff members. It is clear that almost all agencies in the Community Services Sector face a tension between the increased demand for community services, expected to continue over the next two decades (for example to accommodate the needs of an ageing population), and the fact that the sector faces considerable challenges in retaining existing staff and recruiting its future workforce. This points to the fact that the sector and its constituent agencies must address these issues of workforce development in order to meet future demand for services. This paper draws on findings from a recent (2005/06) survey of agencies in South Australia to highlight the need for the development of a major integrative workforce framework for the sector.

Financial Development, Effective Demand and Employment; Application of Kaleckian, Post-Keynesian model

Taha Chaiechi, CofFEE, University of Newcastle, Australia.

For neoclassical economics unemployment is, in the last instance, a labor market phenomenon. It is due to high real wages, which in turn is a consequence of so-called labor market distortions, like labor market regulations and trade unions. In contrast, Post-Keynesians argue that unemployment is the result of demand deficiencies on the goods markets, and that the latter result particularly from a slow down in investments. Full employment at a living wage requires high aggregate demand, which requires high net investment to inspire savings and economic growth. High net investment signifies rapid growth and expands employment opportunity. Investment analysis at the macroeconomic level has been very extensive, ever since Keynes (1936) placed the investment function at centre stage when analysing why a market capitalist economy does not necessarily achieve full employment equilibrium. Keynesians posit that goods market demand determines labor market outcomes. Thus the idea of a hierarchy of markets is implied. On the other hand, the link between financial market development and investment decisions not only sheds light on the dynamics of business cycles but also represents an important element in understanding economic development and growth. In particular neo-Kaleckian hypotheses about the relation between the profit share and capacity utilisation (Bhaduri and Marglin 1990, Blecker 1999) is explored. In this study, a Kaleckian-Post-Keynesian macroeconomic model, which is an extended version of the Bhaduri and Marglin (1990) model, serves as the starting point. This study attempts to investigate that the broader financial sector boosts effective demand and consequently improves employment.

Welfare to Work meets WorkChoices: more recruits for the reserve army

Beth Cook Centre of Full Employment and Equity University of Newcastle

This paper argues that the introduction of the Workplace Relations Amendment (Work Choices) Act 2005 in combination with the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) Act 2005 constitutes a new phase in the ongoing assault on the working class to eradicate impediments to the pursuit of profit. WorkChoices builds on the foundation of the Workplace Relations Act 1996 to further entrench employer prerogatives through legal and institutional changes designed to exert downward pressure on wages and working conditions through restricting the scope of awards and agreements, limiting collective bargaining, and marginalising the AIRC. AFPC decisions are likely to force workers into bargaining agreements in an effort to forestall real wage reductions. Welfare to Work complements WorkChoices by cutting income support payments and increasing labour supply by co-opting some of the most disadvantaged groups into the labour force where they must accept any employment offered or participate in Mutual Obligation requirements such as Work for the Dole.

Endogenous Money, Non-neutrality and Interest-sensitivity in the Theory of Long Period Unemployment

Peter Docherty, School of Finance and Economics, University of Technology, Australa.

This paper investigates some important aspects of the role played by endogenous money in an explanation of long period unemployment. Firstly, it examines whether endogenous money is a sufficient condition for the existence of long period unemployment as suggested by the accommodationist school. Secondly, it enquires as to whether endogenous money is necessary given the impact of the capital debates on the full employment mechanism of the neoclassical model. Thirdly, it examines the conditions with respect to money illusion required to obtain non-neutrality in an accommodationist framework. Fourthly, it explores the impact of incorporating a Taylor rule in the structure given to endogenous money. The paper demonstrates that money supply endogeneity is a sufficient condition for long period unemployment in a model with interest-sensitive expenditures and a necessary condition for non-trivial solutions to models of the Kaldor-Pasinetti-Sraffa-Keynes (KPSK) variety. The paper shows that this latter result does not require money illusion on the part of individual economic agents and that it holds even when a Taylor rule is used by the central bank in setting interest rates. Money supply endogeneity of the extreme or accommodationist type is thus shown to be of fundamental significance for the construction of an alternative theory to the neoclassical paradigm in attempting to explain long period unemployment.

Redefining the ageing workforce in local governments: mapping the aspirations of older/blue collar workers with organisational training and development innovations

Tricia Fox, Hitendra Pillay, Kathy Kelly (LGAQ) and Megan Tones, Queensland University of Technology, Australia.

As the population ages on a global scale, older workers have the propensity to become a significant economic force for the future of Australia. However, OECD (2005; 2006) and ABS ( 2004) reports indicate that work conditions may be incompatible with the needs of mature aged workers including: high incidences of stressful and physically demanding work environments; inequitable access to training; inflexible work schedules and inadequate rehabilitative services for injured or disabled workers. These trends have implications for the Australian workforce including possibilities of skill shortages in the workplace and a financial strain on pension systems, if mature aged workers are not retained. Transitional employment offer potential solutions for the aging workforce to remain engaged in the workforce, to support workers wellbeing and also contribute to workers changing economic situations (Pillay, Kelly & Tones, in press). It is argued that, economic burdens are lessened as mature aged persons are able to retain some financial independence in old age; secondly, work conditions can be modified to avert many of the stressors encountered in current full time employment. The study reported here is from the first year data of an ARC funded Industry linkage grant. A quantitative study using an Australia wide online survey solicited aspirations of older workers regarding transitional employment options. Participants included 1083 local government workers over the age of 50 years. Results were analysed via Chi-square analysis, and it was found that variables such as occupation type and education level had the largest impact on transitional employment preferences. The results indicate that majority of workers from professional (97%), management (97%) and administrative (97%) occupations were interested in transitional employment post retirement, whilst technical (91%), operations (89%), other (87%) and trade (79%) workers also responded quite favourably to transitional employment. Labourers were the least responsive to transitional e mployment options (41%). Similarly for education, workers with a trade (81%) or high school (79%) qualification are less amenable to transitional employment than workers with university (97%) or TAFE (97%) qualifications. The findings provide useful data to map the possible confounding effect of education level and job types on preferences for transitional work by older workers. These findings are discussed in the context of the work ability model (Illmarinen, 2001) and current Australian policy (OECD, 2005; 2006).

Unemployment and "Diversionary" Foreign Policy Around the World, 1960-2005

Ben Goldsmith, CofFEE, University of Newcastle, Australia.

This paper builds on existing studies to expand and refine understanding of the effects of unemployment on the foreign policies of countries around the world. This will be done by collecting and analysing data on unemployment rates for as many countries over as many years as possible.

Diversionary foreign policy can be defined as belligerent and conflictual behaviour by one state towards another with the goal of redirecting public attention from internal problems in the belligerent state. One of the key symptoms of such internal problems, and a key hypothesized cause of diversion, is a high or increasing rate of unemployment. There is considerable evidence that some major states, especially the United States, do engage in diversionary behaviour. Recent studies include Clark (2003), DeRouen (1995), Fordham (1998), Hess and Orphanides (1995), Meernik (2000), Miller (1999), Pickering and Kisangani (2005).

In a sophisticated new study of the diversionary use of military force in U.S. foreign policy, Fordham (2005: 134) reflects the consensus when he argues that "most states cannot use force without risking a serious and costly international military conflict." Because of this, "[c]onsistent diversionary behavior probably only makes sense" for very powerful states like the United States. He continues, "[f]or the leaders of less powerful states, diversion is fraught with peril. It may be undertaken in rare cases, but probably not often enough to become a statistically discernable pattern of behavior."

The purpose of the paper is to test this claim using the latest available data and appropriate statistical techniques. In particular I will test the effect of unemployment on various levels of conflict and on levels and changes in defence expenditures.

Work as Dignity: The Importance of Consultation and Participation in Facilitating Generational Attitudinal Change for the Employment of People with a Disability and the Elimination of Unmet Need

Carol Healy and Frances Lovejoy, UNSW, Australia.

The issue of unmet need arising from disability is not new. But what of the issue of unmet need arising from the wider community? Open and supported employment services that currently exist for people with a disability in Australia should be commended for their commitment to the dignity and inclusion of people with a disability. However, there still exists a huge number of people with a disability whose employment needs are not met. Catholic teachings advocate work as a necessary ingredient for dignity, and as such, unemployment is destructive to the social condition and personal wellbeing of those trapped in the downward spiral. Drawing on the Catholic Church's promotion of processes of consultation and participation, this paper advocates the need for community initiatives and wider information provision as the underpinning mechanisms for the breakdown of current negative community attitudes towards people with a disability and their employment.

Work as Dignity: The Importance of Consultation and Participation in Faciliatting Generational Attitudinal Change for the Employment of People with a Disability and the Elimination of Unmet Need.

Otto Henfling and Emily Caska, Centacare Catholic Community Services, Australia.

The issue of unmet need arising from disability is not new. But what of the issue of unmet need arising from the wider community? Open and supported employment services that currently exist for people with a disability in Australia should be commended for their commitment to the dignity and inclusion of people with a disability. However, there still exists a huge number of people with a disability whose employment needs are not met. Catholic teachings advocate work as a necessary ingredient for dignity, and as such, unemployment is destructive to the social condition and personal wellbeing of those trapped in the downward spiral. Drawing on the Catholic Church's promotion of processes of consultation and participation, this paper advocates the need for community initiatives and wider information provision as the underpinning mechanisms for the breakdown of current negative community attitudes towards people with a disability and their employment.

Between Rocky Employment and Hard Welfare: Single Parents, "Welfare-to-Work" and "WorkChoices"

Patricia Hewitson, Catholic Social Services Australia.

This paper addresses the combined impacts for single parents of the recent changes to the welfare and industrial relations systems dubbed "welfare-to-work" and "WorkChoices". Some single parents are now compelled to seek paid part-time employment, and to accept virtually any job offer, as a condition of receiving income support. Here, three salient features are identified of key industries targeted by the Government to offer jobs to people affected by welfare-to-work. Those features are: high concentrations of low-paid employees, high proportions of part-time and casual employees, and increasing usage of Australian Workplace Agreements. Each feature is discussed in terms of its prevalence in welfare-to-work "target" industries, its implications for single parents as employees, and the outlook under "WorkChoices". The paper concludes that we can expect increased working poverty among single families, and calls for appropriate evaluation of the impacts for single parents and their children of "welfare-to-work" in a "WorkChoice" context.

The unemployed, the retired and the retrenched: some similarities and differences in anxiety and experienced stress

Richard Hicks and M. Chan, Bond University, Australia.

While the unemployed have been examined extensively in terms of psychological impacts, no studies appear to have examined similarities and differences among the unemployed, the retrenched and retired individuals. Retired individuals are thought generally to be less anxious than employed persons, but the relationship to the unemployed and the retrenched has not been identified. This current study is exploratory and examined the three groups of about 20 participants each, finding significant differences between the groups on anxiety and mental health. The paper presents the results.

Adaptive and maladaptive perfectionism in a sample of 34 unemployed people: potential implications for further study, and for policy and equity

Richard Hicks and Belinda Seib, Bond University, Australia.

As part of a larger study examining psychological distress, desire for work involvement, self-efficacy, perfectionism and personality attributes associated with the employed vis-�-vis the unemployed, the current study examined the role of adaptive and of maladaptive perfectionism. The sample included 34 unemployed individuals participating in the Commonwealth-funded Personal Support Programme.

No current research exists on the impact of the attitudes of perfectionism on the unemployed, though earlier research has drawn direct conclusions about the impacts of the different attitudes among the employed. Thus Leong and Chervenko (1996) noted a link between perfectionism and career indecision; Campbell and Di Paula (2002 ) suggested that maladaptive perfectionists choose goals to gain others' approval but without commitment (and hence perform less adequately); and failure to perform less well has been associated with inappropriate self-evaluations and maladaptive thinking (e.g., Flett et al., 2002; Tangey, 2002; Vansteenkiste et al., 2005). However specific studies examining the attitudes of perfectionism and the relationships to self-esteem, general well-being, life satisfaction and employment-orientation have not been studied. This project therefore used the Multi-dimensional Perfectionism Scale (Frost et al., 1990), the General Health Questionnaire (12-item), a depression questionnaire (the DASS-21) and a general questionnaire on the status and satisfaction of the unemployed individuals and their willingness to seek employment.

The findings from the study of these unemployed individuals in the Personal Support Programme emphasise that maladaptive perfectionism may play a role in the psychological distress experienced by the unemployed. Identification of the role of maladaptive perfectionism in the experience of psychological distress may have wide-reaching implications for mandatory employment programs (e.g., Work for the Dole) and for the suspension of unemployment benefits when such activities are breached. Paradoxically, these breaches could, for maladaptive perfectionists, decrease the behavioural pursuit of employment and increase psychological distress rather than motivate job search activity.

Deleuze and Guattari's Political Economy of the State

James Juniper, CofFEE, University of Newcastle, Australia.

This paper elucidates the approach that Deleuze and Guattari have taken towards political economy within their text, A Thousand Plateaus. Where relevant, other major texts will be drawn upon to shine more light on the narrative. This radical political economy will be explicated in relation to the immanent critique the authors have mounted against Kant's theory of Ideas, in terms of their notion of particular essences, and in relation to the modifications that the authors have made to Foucault's conception of the assemblage or diagram, where the concepts of power knowledge relations and resistance have been displaced by those of desire and lines of flight. Drawing on this modified conception of the assemblage, the paper discusses the dichotomies that Deleuze and Guattari establish between the code and the axiomatic, the arborescent and the rhizomatic, and the molar and the molecular. Finally, Deleuze and Guattari's conception of the State is discussed in relation to what the authors have called the Apparati of Capture: land and ground rent, labour and surplus value, taxation and state money. In this key section of the paper it is argued, in opposition to the interpretations of Hardt and Negri, that the resulting conception of political economy is entirely congruent with a Chartalist interpretation of fiat currency and state finance.

Dealing with the ecological constraints to full employment

Philip Lawn, School of Business Economics, Flinders University, Australia.

The Job Guarantee (JG) has been put forward as a viable means of achieving a low-inflation, full employment outcome. The JG sits very comfortably beside the position put forward by ecological economists that public policy needs to be based on a 'macro control-micro flexibility' stance. Macro control-micro flexibility implies that when a market economy alone is unable to achieve specific objectives (such as full employment, ecological sustainability, and a just distribution of income and wealth), there is a need to impose macro controls based on ethical or ecological criteria and then allow the market to determine the most efficient means of achieving these goals.

The JG involves the imposition of macro controls in the sense that, irrespective of private sector and conventional public sector spending, an additional amount of public spending is conducted to guarantee full employment (no more/no less). How much JG spending is required depends on the prevailing level of aggregate demand. In addition, the JG is designed so that if any inflationary pressure leads to a contraction of economic activity and subsequent job losses in the private sector, the unemployed workers are automatically absorbed by the JG scheme. This is the micro-flexibility element of the JG. The anti-inflationary aspect of the JG is further strengthened by the payment to JG employees of the minimum (floor) wage. With good working conditions incorporated into the JG model, governments can also induce private sector employers to make positive workplace changes in terms of the flexibility of work hours offered to employees, greater workplace democracy, and increased job satisfaction.

Where a potential problem exists with the JG is in relation to achieving ecological sustainability. If the economy is already at an ecological precipice, any increase in real GDP and the corresponding rise in resource throughput can lead to the prevailing level of economic activity becoming ecologically unsustainable. Efficiency and productivity advances can help reduce this pressure, however, they no more guarantee ecological sustainability than increased productivity and labour supply-side policies can guarantee full employment. Hence there is a need to impose macro controls on the economy to ensure the rate of resource throughput is ecologically sustainable. Macro constraints can be introduced in the form of 'cap-and trade' systems applied to the various resource types and the different forms of pollution. The 'cap' constitutes the macro form of control while the 'trade' element induces producers to invest in the development of, and ultimately uptake, green technologies.

Together, the JG and what might be deemed a 'sustainability' guarantee can help overcome the potential conflict between achieving full employment and ecological sustainability.

Preparing the way for the portfolio careerist in the tourism industry

Kevin D. Lyons, CofFEE, University of Newcastle, Australia.

Over the past two decades the tourism industry has developed a reputation among young people as holding promise to attractive professional career opportunities. However, this paper argues that the tourism industry is dominated by an increasingly mobile, casualised and part-time workforce employed largely by small to medium business enterprises. In this context career opportunities and trajectories are rarely linear and require individuals to act strategically. The individual who succeeds in this setting must develop the skills and ability to carve out what has been termed a 'portfolio career'. However, tourism education has largely ignored this type of career and the skills needed to be successful. This chapter examines the rise of the portfolio careerist in the tourism industry, the implications of this type of career for the industry and new challenges to tourism education that need to be considered to ensure that tourism workers career hopes can be realised.

Skills Shortages in the Australian Rail Industry

Anusha Mahendran and Mike Dockery, CLMR Curtin University, Australia.

Continuous economic growth within Australia in recent times has placed increased strains on the supply of skilled labour, leaving many industries vulnerable to skills shortages. One example is the Australian rail transport industry, where the need to address emerging skills shortages is becoming an increasingly pertinent issue. This paper profiles employment trends within the Australian rail transport industry and assesses the extent and nature of skills shortages facing the sector. It also analyses some of the factors which have contributed to the skills dilemma in the rail industry. The paper concludes with an outline of some policies and measures which could assist in addressing the skills crisis within the sector. The findings presented in the paper are based on data acquired from a variety of sources including ABS statistics and existing literature as well as primary research with rail operators and industry representatives.

Are gross job flows sensitive to exchange rate movements?

William Mitchell and Jenny Myers, CofFEE, University of Newcastle, Australia.

This paper considers whether rates of job destruction and creation are influenced by exchange rate movements. It shows that gross job flows in the Goods-producing sector are significantly impacted by exchange rate fluctuations, with an appreciation increasing both job creation and destruction rates and hence job reallocation. However, job destruction does not dominate the adjustment process. Trading-services sector job destruction rate is marginally and negatively responsive to exchange rates, with the Remaining-services sector unresponsive to exchange rate movements.

Employment is demand driven

William Mitchell, CofFEE, University of Newcastle and Joan Muysken, CofFEE-Europe, University of Maastricht, The Netherlands.

This paper challenges the OECD Jobs Study consensus that unemployment is driven by supply side factors. It notes the recent breakdown in that consensus and the admissions from the OECD that their previous analysis was based on fragile evidence. The paper presents a raft of empirical evidence for 8 OECD countries including Australia to establish that employment (and unemployment) is predominantly driven by aggregate demand cycles.

Is the Foreign Exchange Rate a Constraint on Full Employment Policies in Australia?

Peter Kriesler and J.W. Nevile, Centre for Applied Economic Research, University of New South Wales, Australia.

The effects of the foreign exchange rate on both prices and quantities are widespread, making it one of the most important prices in our economy, but it is very difficult to predict how policy will affect it. There are many theories about how the exchange rate is determined, but all the systematic ones are largely irrelevant in today's world. At different periods in the history of the international economy different motives were dominant among participants in foreign exchange markets. Currently, speculation overwhelms all other reasons for foreign exchange transactions. The theories of exchange rate determination, that have been influential in the past, focus on one or another set of so-called "economic fundamentals". These are only one of the factors affecting speculation and are often not an important one. Policy makers in even moderately open economies cannot ignore the effects of their actions on the exchange rate. Hence, they have to consider what motivates speculators in the foreign exchange market. It is possible to list the ways policy actions may affect the exchange rate, but the extent to which each does so, is often unpredictable. Keynes' comparison of the determinants of share prices with those of the winner of a beauty contest gives the most insight into how the foreign exchange market works today. Observable economic factors are only important to the extent that they affect expectations of the actions of others. This varies from case to case and there are no golden rules to guide policy makers. The exchange rate does constrain policy to some extent but not as much as is often thought.

Trends in effective marginal tax rates 1996-97 to 2006-07

Alicia Payne, Ann Harding, Quoc Ngu Vu and Richard Percival, NATSEM, University of Canberra, Australia.

This paper examines trends in effective tax rates between 1996-97 and 2006-07, using NATSEM's STINMOD microsimulation model. An effective tax rate shows how much Australians lose on their next dollar of income from the combined impact of income tax and withdrawal of means-tested government assistance (such as family tax benefit and Newstart Allowance). The study shows that in 2006-07 about 910,000 Australians will keep less than half of their next dollar of private income. The proportion of working age Australians facing effective tax rates of more than 50 per cent has increased over the past decade, from 4.8 per cent in 1996-97 to 7.1 per cent of all working age Australians today. However, the proportion of working age Australians set to keep less than 20 cents from their next dollar of earnings has fallen, from one per cent in 1996-97 to just under 0.7 per cent today. The analysis showed that the proportion of working age Australians living in couple with children families and facing effective tax rates of more than 50 per cent has tripled since 1996-97 (from 4.5 to about 14 per cent), reflecting the sharp expansion in Family Tax Benefit. The study examines trends in high effective tax rates by gender, family type, family income and state.

The Job Guarantee in practice

Victor Quirk, Emma Allen, Anthea Bill, Beth Cook, Benjamin Goldsmith, James Juniper, Robert LaJeunesse, William Mitchell, Jennifer Myers, Martin Watts, Riccardo Welters and Graham Wrightson, CofFEE, University of Newcastle, Australia

This paper proposes an operational framework for administering and executing a national Job Guarantee in Australia.

'Get Rich or Die Trying': Value under WorkChoices

Taliessin Reaburn, University of Melbourne, Australia.

By looking at popular expressions of the relationship people have to their work, and the conditions of that work, it is possible to uncover a logic that destabilises the 'productivity' that WorkChoices promises. The underlying value system embedded within the WorkChoices campaign - competitiveness, productivity, growth - are based not only on an economic (ir)rationality but also on an ontological framework of the individual that requires careful scrutiny.

By analysing a series of interconnected representations of work, this paper will go some way in uncovering the underlying structure of the WorkChoices policy and the inherent value system that supports it. Following from this an analysis of the relationship between WorkChoices and 'economic productivity' reveals that the change in policy creates an emptying-out of social and cultural value in the employment relationship and that this position is untenable for the future of work.

Financial Fragility in New Zealand and Its Implications for Australia

Susan K. Schroeder, Auckland University of Technology, New Zealand.

New Zealand and Australia have always had close economic, social and political ties. This paper analyzes the degree of linkage between their business cycles. Using a new technique for assessing the financial fragility of an economy, the economic health for both countries is examined. Although Australia appears healthy New Zealand's economic health is fast approaching the turning point of financial fragility. This has important implications for Australia and its banking system as Australian banks currently control approximately 90% of New Zealand's bank assets. The fragileness of New Zealand may warrant attention by Australian policymakers in terms of maintaining capital adequacy (especially with the implementation of Basel II) and constructing a contingency plan to soften the impact on employment if a downturn in New Zealand accelerates the deterioration of Australian business conditions.

Keynesian Aggregate Supply, the Role of Incomes Policies and the Approach to Full Employment

Greg Smith, University of New England, Australia.

The paper argues that there is scope for aggregate demand expansion, accompanied by appropriate investments in employment, to reduce the national unemployment rate below current levels. A great obstacle to this is the priority given to inflation containment and, given the accompanying neoclassical macroeconomic framework, to a stance of aggregate demand restraint. Focus on a Keynesian formulation of aggregate supply brings incomes policies to the fore to deal with inflation and gives aggregate demand expansion the opportunity to promote full employment.

The Job Network and Underemployment

Thorsten Stromback, Centre for Labour Market Research, Curtin University of Technology, Australia.

This paper brings together publicly known information about the operation of the Job Network and comments on its performance during a period of strong employment growth and falling unemployment.

The facts include the limited information that can be gleaned from the official data that is publicly available on the operation of the Job Network. This includes the performance profiles, post-program monitoring data and information from DEWR annual reports and budget papers. This official picture of the Job Network performance is then compared and contrasted with a range of other information - the views of Job Network members, surveys of Job Network staff and customers, and evidence about the changing nature of unemployment and the experience in other countries.

The issue of particular concern is how well the Job Network is serving the needs of its more disadvantaged customers. This entails reconciling the confident tone of official pronouncements with the less sanguine assessments by Job Network members and the facts about unemployment and income support. Because of the limited information about the Job Network, the facts are often difficult to reconcile. There is, for example, evidence that the operation of the Job Network has led to an increased churning of jobseekers between short-term jobs but this is not so evident in data on the structure of unemployment.

The tentative conclusion that, after seven years of operation and much fine-tuning, the performance of the Job Network in serving the needs of the most disadvantaged is still lacking. Having noted that it is in line with what could be expected from devolving labour market programs to private contractors, the paper end with some suggestions how this situation could be redressed.

Institutional diversity and Europe's demand for higer education

Joan Muysken, Tom van Veen, Jaakko Kooroshy, CofFEE-Europe, University of Maastricht, The Netherlands.

The impact of institutional diversity on economic performance in general has been studied extensively, in particular the impact of labour market institutions on labour market performance - for a critical survey see Howell (2006). However, the impact on the educational distribution of the labour force and employment has been largely ignored, although this is highly relevant for both an analysis of mismatch and the income distribution - see B�nabou (2003) and Sneessens (2006).

To provide a solid basis for a further investigation of these latter questions, we provide an empirical analysis based on the institutional data base which we have collected in Kooroshy, Muysken and van Veen (2006). On the one hand we analyse the relationship between labour market institutions and the composition of employment and unemployment for various European countries - we also include the use as an interesting reference. We distinguish between high, medium and low skilled employment, unemployment and wages. Various hypotheses which can be loosely inferred from the literature are tested. For instance, does the widely found conclusion that a higher degree of unionism corresponds to less wage differentials (Freeman, 2006) also imply that relatively more high skilled workers are employed? Does the finding that employment protection legislation favours employment of senior males at the detriment of young and women (Lindert and Allard, 2006) imply that relatively less high skilled workers are employed? Moreover, we analyse to what extent the observed differences in skill composition of workers between the various countries can be explained by institutional differences.

We complement our findings with an empirical analysis the impact of institutional differences on the income distribution, using data from the Luxembourg Income Study - see also Smeeding (2005) with a comparable study focussing on the US.

The Impact of the Provision of Informal Care on Labour Force Participation Behaviour

Martin Watts, CofFEE, University of Newcastle, Australia.

With an ageing population and an increasing incidence of disability, the demand for informal care is increasing when the Federal Government is trying to raise labour force participation. In 2003 16% of the adult population provided informal care. However, 'Caregiving and receiving is a relationship, providing worth and value to all participants' (Cass, 2006), so that public policy designed to support caring should not view it merely as a marketable service if not available informally.

In this paper, we employ econometric techniques to explore the impact of different specifications of informal care on labour force participation behaviour. The paper then focuses on the interdependence of participation behaviour and the provision of informal co-residential care and how these decisions are conditioned by socio-economic factors. Finally the implications of the results for the (re)design of public policy are explored.

Tightness and Long-Term Unemployed's Chances

Riccardo Welters, CofFEE, University of Newcastle, Australia and Joan Muysken, University of Maastricht, the Netherlands.

This paper analyses under what conditions employers recruit from long-term unemployed. We find that if the labour market is quantitatively tight, employers offer long-term unemployed a chance both for simple as well as for relatively complex jobs. Employers refuse to recruit from long-term unemployed for relatively complex jobs when the labour market is qualitatively tight. It is in these circumstances that demand side policies are needed to prevent employers from picking 'low hanging fruit' and not investing in training long-term unemployed.

Public Debt Sustainability and Alternative Theories of Interest

Tony Aspromourgos, Faculty of Economics and Business, University of Sydney, Australia; Daniel Rees, Reserve Bank of Australia, Sydney, Australia; and Graham White, Faculty of Economics and Business, University of Sydney, Australia.

This paper reappraises the determination of sustainable trajectories of public debt and fiscal balance, with particular reference to the possible relations between the interest rate on debt and the growth rate of the economy. From the standpoint of the unorthodox approach to the theory of interest proposed by Keynes - and in a certain sense, also by Sraffa - the analysis opens up the possibility of sustaining permanent primary budget deficits. But how much this non-conventional standpoint enables one to revise the spectrum of feasible empirical magnitudes for sustainable fiscal balances appears to be rather modest.

The Reserve Army of Labour: The 457 International Brigades

Harry Williams, University of Newcastle, Australia.

The Reserve Army of Labour (RAL) is a Marxian concept that has become more and more legitimised under the auspices of Neo liberal economic systems. The RAL has been used to discipline the standard workforce (permanent fulltime work) for many years. The problem for employers and the capitalist class is that the RAL began to make certain demands for their output before gaining work. This may have happened due to either union demands or welfare payments. To circumvent the internal resistance of workers an external workforce from less developed countries has been organised by the use of 457 visas. Ostensibly these workers have been filling a skills vacuum created by past mismanagement of governments of various political persuasions. However evidence indicates that the imported workers may not be as skillful as they are purported to be and that they are not subject to the same wages and conditions of employment as their domestic comrades.

Profiling the South Australian Labour Market

Lise Windsor and Chris Zielinski, SA Department of Further Education, Employment, Science and Technology, Australia.

South Australia has recorded relatively strong economic and labour market growth in recent years. As a result employment has reached a record high and the unemployment rate is at a generational low. This extended period of growth has resulted in skill shortages is some occupations, industries and regions. At the same time, a significant number of South Australians are underemployed, unemployed or not participating in the labour market. For South Australia to prosper economically and socially, it is imperative that all available labour is utilised effectively. To support the development of policies and programs focusing on workforce participation, the South Australian Government has developed a diagrammatic profile of the South Australian labour market. The profile quantifies various sub-populations, including overemployed, underemployed, long-term unemployed and marginally attached). This paper provides a description of the South Australian Labour Market Profile and how the various categories have been estimated. It highlights the fact that there remains a significant pool of underutilised labour in South Australia.

Globalisation and Labour Market Reforms in China

James Xiaohe Zhang, The University of Newcastle, Australia.

As the most populous country in the world, the Chinese labour market has several distinctive characteristics that other countries do not share. One of these characteristics is the rapid expansion in employment in non-state owned enterprises (NSEs) which emerged in the early 1980s. In spite of the remarkable success of the NSEs, questions are raised as to how and to what extent the development of NSEs has eroded the dominance of state-owned enterprises (SOEs), particularly with regard to industrial production, employment and international trade. Also, questions regarding how the reforms in China's labour market have affected the world economy, particularly in the labour intensive industries, remain unsolved. This paper attempts to answer these questions and generate policy implications for the rest of the world.

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