Wednesday, March 19, 2008

Mr Rudd's symbolism barely a start

I thought today's editorial in The Australian was illuminating. The Rudd Government is inexperienced with an unskilled ministry (even Gillard has disappointed). Rudd however is an experienced showman - the type of confidence trickster who can play stupid political games with apparent conviction. I say 'apparent' because he doesn't believe what he says and it shows. He has consolidated his power base skillfully.
'It has been quite a honeymoon, but now reality bites. Kevin Rudd apologised to the Stolen Generations and signed the Kyoto Protocol in style. Banishing Work Choices booklets to the pulp mill, Deputy Prime Minister Julia Gillard turned the "rip-off of working families" into high emotion in parliament. Industry Minister Kim Carr is off on a mission to distribute buckets of money to needy multinationals keen to manufacture a green car. Environment Minister Peter Garrett has declared war on plastic bags. And the Prime Minister is alarmed about the "epidemic of binge drinking across the country".

To date, the Rudd Government's symbolism has been rewarded with record opinion polls, with Brendan Nelson struggling to hold double figures. At some point, though, voters, as well as history, judge governments for lasting achievements. It's too soon for the Rudd Government to have long-term runs on the board, although it is generally doing well keeping the Northern Territory intervention on track. Already, however, the Government has made one lasting mark on the reform process: it is the only government in 30 years to wind it backwards.

Elected on a promise to abolish WorkChoices, the Government will have to deal with the inflationary and unemployment consequences of doing so. Undoubtedly, 25 years of industrial relations reform under the Hawke, Keating and Howard governments swept aside restrictive work practices and helped drive jobs growth. Yet so cowed is the Rudd Government in the face of union muscle that it won't even proffer an opinion on a responsible figure for a rise in the minimum wage. '

14 comments:

Anonymous said...

"And the Prime Minister is alarmed about the "epidemic of binge drinking across the country".

Alarmed?

this from the guy who ended up in a NYC strip joint and then couldn't recall because he was too drunk to remember?

I love nanny state hypocrisy.

Anonymous said...

Jc

conrad said...

"the type of confidence trickster who can play stupid political games with apparent conviction"

Any extant politician most people know the name of that isn't this? It just seems like a continuation of the norm to me. Its not like Brendan Nelson is disagreeing with him or anything like that (nothing more than slight wimper anyway). Hopefully the next recession will wake people up, when people finally realize they can't have everything and might actually care about the accountability of those wasting our money.

hc said...

Strongly-worded comment deleted as author did not identify themselves. Read comments policy.

Anonymous said...

strongly worded? All I asked for was some econometric evidence for your claim?

Ken_L said...

"Yet so cowed is the Rudd Government in the face of union muscle that it won't even proffer an opinion on a responsible figure for a rise in the minimum wage."

Strange ... I don't remember the media deploring the failure of the Howard Government to nominate a figure in their submissions to the AFPC. Perhaps cowering in the face of business muscle is somehow less reprehensible than doing the same with regard to unions.

Anonymous said...

50 years ago the rank and file would not have been able to comprehend a Labour leader with a multimillionaire wife or a party full of professional trade union officials, who hadnt toiled as a common man must.
In this lies the germ of disenchantment, that will grow with the unequal balance of power that will be abused, we now have as our future.

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Anonymous said...

"Elected on a promise to abolish WorkChoices"

It's a shocking thing, just shocking, when a government actually does what it promised to do.

Next thing you know, they won't do what they promised not to do. Where will it end?

And, Harry, really, you must be joking about Gillard. She has performed superbly, in and out of parliament. I'm sure you don't like that fact, because you don't like Gillard, her values or her policies, but it's still a fact.

Spiros

Anonymous said...

She has performed superbly, in and out of parliament. I'm sure you don't like that fact, because you don't like Gillard, her values or her policies, but it's still a fact.

Oh yes Gillard, coming and telling us what a proud day it was for women in this country that SHE was the first female acting PM.

Spiros as usual demonstrating his full grasp of policy and issues.

JC

PS.

I personally feel that Rudd has a problem leaving this lot Ruddlerless for 2 weeks. You would never know what idiocy they come up with.

davidp said...

As far as I know there is no econometric evidence specifically on Work Choices. Though movements in unemployment during the period are consistent with Work Choices working as intendeded they are also consistent with high demand driven by a resources boom so getting conclusive evidence from macro data is very challenging.

Plant level data would be better for this but it is not available.

However, the proposed Rudd reforms do more than reverse Work Choices - they actually reverse parts of the 1996 Workplace Relations Act.

There is some evidence on the effect of the spread of enterprise bargaining and individual contracts supporting that these changes led to positive effects, though it is not published yet.

1. Connolly et al (2004) finds aggregate labour productivity is positively correlated with the extent of enterprise bargaining and the use of individual agreements.

2. Tseng and Wooden (2001) also look at the effect of enterprise agreements and find a positive effect though cannot establish causality.

3. Farmakis-Gamboni and Prentice (2007) at http://www.latrobe.edu.au/business/abstracts_2007.html#A07.04 find significant (at 10%) increase in productivity growth at union plants relative to non-union plants following the WRA. (note the working paper version states insignificant, but closer inspection reveals they are significant at 10%)

All references are in Farmakis-Gamboni and Prentice (2007).

So as none of these papers (as far as I am aware) have been through full peer-review their findings must, of course, be treated as preliminary, but this is what is out there.

davidp said...

P.S.

I should say there was some (it seems like) quick work done on Work Choices - it was discussed at John Quiggin's blog. It seemed to be subject to the identification problem raised in the previous post so did not refer to it. It should be acknowledged though.

rabee said...

DP, I read the paper a few days ago.
You classify a firm as unionized if at least one employee is a member of a union? Am I right?
I could be wrong!!!

My reaction was, yes sure there have been productivity increases in service sectors relative to manufacturing, mining.....

What happens if you look at firms with say 10% of employees unionized? Does the degree of unionization have any impact?

Has any firm gone from unionized under your classification to non-unionized?

davidp said...

Hi Rabee,

Thank you for your questions about the paper.

It is true that we count a firm as being unionized if it has one employee unionized. Though note that these firms are mainly small (median number of employees is 14.5). We were worried about this so in the robustness section (6.4) we convert all the firms with less than 20 employees and have less than 10% of employees unionized (which would include the 1 employee cases) - the significance of the result for Mining, Manufacturing and Construction increases from 10% to 5% is the main change. We could do more on this I guess.

I was a bit unclear about your comment about sector growth. The technique (difference in differences) we use for the comparison means we cancel out common trends. Specifically, the number in table 8 etc. are differences in productivity growth between union and non-union firms before and after the WRA. So 9.1 means that the productivity growth after the WRA compared with before the WRA was 9.1 percentage points higher for union firms than non-union firms. If this doesn't address the question, please email me and would be happy to clarify further.

For 85% of the firms in the sample, their union status doesn't change. 10% change once (it goes in both directions too) and 5% change more than once. The directions firms change do not seem related to the WRA.

Am happy to discuss the findings further (here or by email)