Ten job seekers/vacancy, unemployment 6% and 13.5% for 15-24 year olds

Interesting reply bordsilver, thanks.

But...

In practice we are seeing a growing concentration of wealth. Aggregate wealth may be higher for a nation as a whole, but the distribution of wealth changes dramatically.

That's not to say wealth isn't growing across the board, but how much of this wealth is actually due to growing personal levels of personal debt used to finance speculative investments in housing? Does a Ponzi scheme increase real wealth?

 

Or he can choose to invest those 50 cars instead. Say another person comes along who wants to start a business. He borrows those 50 cars to fund all the land and equipment he needs to get his new business going. He needs to take on people to help him run the business because this is a business that can't (yet) be automated. New jobs have now been created thanks to the automation of the other jobs. The car owner gets a portion of the profits of the new business. New goods and services have been produced that people value because that's the way that the new business owner makes profits. If these are existing goods and services in the market it drives down prices for consumers enabling their money to go further. Everyone wins.

Or we could just tax the car owner with a new big profit tax and use it to create a few new government jobs that don't produce anything of value.

 

Yes, this is all to do with the government run financial system and the way that they "encourage" people to get into debt. They print money to buy debt and drive interest rates down fueling inflation which then encourages further borrowing creating a vicious cycle which results in oscillating booms and busts. Regular people find this situation quite difficult to deal with. Those in the know and with capital can use it to gamble and win big (or lose big).

 

There's many ways to discuss this area and it partly depends on what problem you believe there to be. If we leave aside the fiat currency-induced effects on wealth distribution for now, I'd be interested to hear more about what you are trying to say about the growth in aggregate wealth over time and it's relative distribution. (Also, let's leave aside any issues about the quality of Pikkety's work and data.)

As a couple of starting points, my first two questions about relative wealth distribution would be "So what? As long as it hasn't been obtained by theft or cronyism, why does it matter?"

At a basic level an average workers's wealth is linked with accumulation. In your first job you may get paid, say, $30K/year but your general manager, Bill, with 25 years experience gets paid $180K/year. The simple fact that Bill earns 6 times what you do means that they are more able to accumulate more "wealth" each year. In addition, they've already been in the workforce for 25 years continually building on their skills and relative worth and so have a 25 year head start on you do. The consequence is that Bill has accumulated net wealth of, say, $1 million. In contrast you have net debt of $20,000 from the student loan you took out. I would say that the relative income and wealth distribution is valid and has been well earned.

Now let's consider the bosses best friend, Joe, who joined the same company at the same time and also became a general manager ten years ago at the same time as Bill. Let's say that at this point in time both of them had accumulated net wealth of $500K in savings and in their private home. Now the company went through a real bad patch just as both of them got promoted due to a disruptive technology driving down the price of competitors products. It was at the point of insolvency and the board passed the hat around for money to buy a lot of expensive new machinery that would allow them to slash their prices and hopefully stay competitive. Joe threw in all of his money and took out a mortgage against his house and invested all of his $500K into the company. He obtained a 5% shareholding. Bill meanwhile was much more conservative and was not willing to risk his savings and did not buy any shares.

Ten years on, the investment in the new capital paid off and the company is now employing 3 times as many people than it was (including you) and is turning a $10 million a year net profit. Joe now receives an annual dividend of $500K and his shares are now worth $1.5 million. Joe is consequently earning far more income than Bill and has a higher net wealth despite them both essentially having the same job. Is this fair? Even though Bill didn't take any risk in the venture should he be entitled to some of Joe's money? What if Joe's investment had gone sour while Bill's index fund soared, should Bill compensate Joe for what he obviously saw as a bad investment? Bill's real salary hasn't changed in the ten years since he became a general manager and all of the extra profit went into the returns to Joe's (and others) capital investment. Is this fair? Bill's job only exists because of Joe's willingness to risk his property.

 

It is an immense strain on an unemployed person who is genuinely trying to do the right thing and applying for suitable jobs.

It's also trivial for an unemployed person who's out to game the system by spamming any employer they can get contact details for.

What will happen is the signal-to-noise ratio will drop and legitimate, well meaning job seekers will get lost in a sea of junk CVs being pumped out to fill the quota. They'll soon get so desperate and/or shitted off that they'll start doing it too which will compound the problem. The entire hiring dynamic will become grossly inefficient and most of the burden will be borne by the private sector employers.

As pointed out here (which is worth reading in full), there are roughly 5 unemployed people per job vacancy. At the moment, there are about 13 people applying for each job vacancy and only about 2 of them are suitable. The number of suitable candidates has been and will continue to be fairly steady, but with a 40-applications-per-month quota, the number of unsuitable candidates is going to blow out to something ridiculous.

This is policy a perfect example of "quantity over quality". It does things that previous experience pretty much guarantees will produce poor results, employers don't want it because it fills their HR departments with crap, the dropkicks can continue bludging on Centrelink with a minimal amount of additional effort and the majority of genuine job seekers who need temporary assistance while they look for an employer who needs their particular skills will feel the full force of a hard-line political ideology backed up by the government bureaucracy.

 

The government has to be bastards to do this to the unemployed.
And they are.
Such nasty people.

 

The French already did that, 35 hour weeks. Their economy continues to contract compared to what it used to be.

 

And why is the rest of Europe contracting?

 

Good point, but they all suffer under the regulatory burden of the EU. It took almost 15 years for the EU to abolish the regulation preventing people selling curved bananas. That's how absurd regulation and government compliance is over there.

However the stated policy of the 35 hour week, from what I've read, had the observable effect of hurting their economy.

 

The nation that built the snowy river scheme has turned into a nation of people too timid to get up onto their own two feet and do something for themselves. moaning that "someone else has to employ me". "No one wants to employ me". "Employers are mean because they don't employ me". "Someone has to look after me".

In most of the rest of the world you do something to support yourself or you starve. "It's hard" is not a good enough reason to sit on the dole. Of course it's hard. Starting your own business is hard. Employing others it hard. Listening to people whining that you are "greedy" because you work 100 hours a week to run a business and employ people is hard. Listening to Peter's nasty little snipes about how anyone who strives to do better for themselves is a heartless, greedy right wing bastard is tedious.

Well, here's the reality - You live or die based on your decisions. If you decide that you will fight to continue living on the dole then you will eventually suffer the fate of those that live on the dole when the money runs out and your dole becomes food stamps and government cheese packs. If you can't find a job then create a job for yourself. Hundreds of thousands of Australians employ themselves and run businesses. It's hard. so do the hard thing and make something for yourself. It will be hard. But hard is better than food stamps.

 

Quit my well paying somewhat cushy job last week. Going it alone in an effort to set up a location independent business that I have far more control over. This is going to be the best or worst decision I have made so far in life, I can tell. :lol:

 

Good luck petey .

 

There are plenty of things the government could be doing to improve the employment situation, ranging from outright intervention to deliberately removing itself from the equation. There's a healthy middle ground where the government can influence behavior while still leaving plenty of room for workers and employers to make their own arrangements.

There are also a number of specific programs that are known to produce good results in improving people's employment prospects and employers' ability to hire them.

If you're interested in getting results, there is plenty of evidence to show what works and what doesn't.

 

When did politicians ever let evidence get in the way of ideology?

 

Every time each one wishes to challenge someone elses ideology. Often the "evidence" is, shall we say, a bit iffy.

 

^ You forgot takes away people's rights and criminalises the innocent.