Myths of the moocher class in Australia

David Uren’s piece in the Australian today has some pretty eye-catching figures:

…nobody starts to pay tax until their earnings exceed $18,200, but the Australian Bureau of Statistics shows that 60 per cent of all households receive more in cash benefits than they pay in tax.

A household in the middle 20 per cent of the earnings distribution pays income tax of $143 a week but gets cash social benefits totalling $164. Subsidised health, education and childcare deliver that average household a further $346 a week.

Low employment in Tasmania: it’s not just the seniors

Tasmania has set an unfortunate record: it’s the first Australian state in which less than half of all adult men are employed full time. In the lead-up to the financial crisis, the proportion of Tasmanian men in work soared, rising faster than the national ratio, but it has since plummeted. In February 2013, just 48.3% of Tasmanian men aged 15 and over were in full-time work; this was 8.3 percentage points below the national figure of 56.6%.

Back to the future with Mark Latham’s Quarterly Essay

In mid-1983, Michael Foot led the British Labour Party to a disastrous general election loss. The party, already in opposition, lost 60 seats in a 9.3% swing against it. Labour barely scraped into second place ahead of the SDP-Liberal alliance, with just 27.6% of the vote. Foot’s economically interventionist manifesto and socialist rhetoric were blamed for the scale of the loss.

Is Victoria in a recession?

Imagine that it’s grand final day, only rather than being the massive television spectacle we’re accustomed to, no cameras or journalists are allowed inside the MCG. No spectators are allowed to communicate the score with anyone outside the ground.

Labour’s shrinking share

How would we know if we were having a wages breakout? Back in the 70s, there was a period in which wages rose faster than productivity, leaving a situation that some economists dubbed a “real wage overhang”. This, I believe, is what people are talking about when they warn of a “breakout” – an inflationary burst of wages growth well in excess of productivity growth. In fact, since around the turn of the century, we’ve experienced the opposite phenomenon in Australia. Wages haven’t kept pace with labour productivity. They’ve “decoupled”.

Why have a flat tax on super?

I can understand why libertarians might favour a flat  tax on superannuation contributions and on ordinary income. I disagree vehemently with that position, but it’s logically coherent to me. Personally, I favour a progressive tax on both of those things, and I think that position also makes sense. What isn’t coherent to me is the idea that we should tax ordinary income in a progressive way, with higher income earners paying a greater proportion of their income in tax, but we should tax super contributions with a flat tax. How does that make sense?

How does Australia’s minimum wage compare?

Today, Barack Obama announced his intention to push for the US federal minimum wage to be lifted to $9 per hour by 2015, and then indexed to inflation.

In case anyone is interested in how the Australian minimum wage[fn1] stacks up against other advanced economies, I thought I’d post a few charts. As at February 2012, the National Minimum Wage is $15.96 per hour, which works out to $606.40 per week for full-timers. The rate is higher if you’re a casual employee (and therefore don’t accrue paid annual leave and sick leave). To find the minimum wage that applies in a particular circumstance, try the Fair Work Ombudsman.

Why is the participation rate falling?

In late 2010, we set an all-time record for the Australian economy: nearly 66% of people aged 15 and over were either employed, or were actively looking for work. To put that in perspective, the labour force participation rate has averaged 63.2% since 1980.