Monday, 29 July 2013


We created … jobs

You have to laugh or cry, but Employment Minister, Brendan O’Connor and his advisers, didn’t even get it.  Take this huffy letter he wrote to the Australian today:
JUDITH Sloan questions my statement that Labor has created almost a million jobs (“Job creation no government miracle”, 27-28/7).
Well, these are the facts: more than 966,000 jobs have been created since Labor came to office in November 2007. That’s a 10 per cent increase in total jobs across the economy.
What makes this achievement remarkable is those 966,000 jobs were created in Australia during a time when 27 million people around the world lost their jobs during, and in the wake of, the global financial crisis.
Our economic management has seen Australia maintain one of the lowest average unemployment rates among the world’s advanced industrialised economies.
The point I was making was not about the numbers (although, come off it Brendan, using the original numbers rather than the seasonally adjusted numbers is a low trick – December cannot be compared with June).
It was about the fact that the minister had said that “we created … jobs”.
Governments do not create jobs, mate.
And what’s with this average unemployment rate?  Our unemployment rate is increasing and is heading from rates not seen since the GFC?  Is there a bit of fudging going on?
Here is my piece from the Weekend Australian:
One of the things that really gets my goat is members of the government claiming that “we have created a million jobs”.
Take this quote from Brendan O’Connor, Minister for Employment, Skills and Training. “Since the Labor government came to office in November 2007 – we have created almost one million jobs, and our average unemployment rate is just 5.1 per cent – one of the lowest in the developed world.”
Other ministers are slightly more careful with their language.  For example, Health Minister, Tanya Plibersek, more modestly, albeit inelegantly, stated that “Australia’s got almost a million jobs extra since the global finance crisis”.
Even so, there are two empirical problems with these claims.  The first is that the figure is actually closer to 900,000 than one million.  And, secondly, the labour force has grown considerably more than the numbers of employed persons since the Labor government was first elected in 2007.
The number of employed persons is up by 924,00 but the labour force has grown by 1.17 million. The gap is close to 250,000. There have been insufficient new jobs to absorb the growing labour force.
And why quote an average unemployment rate?  Here are the facts.  When Labor was first elected, the rate of unemployment was 4.3 per cent.  It is now 5.6 per cent.  And were it not for the fact that the participation rate has slipped noticeably – from 65.5 per cent in December 2007 to 65.2 per cent now, the rate of unemployment would be greater than 6 per cent.
The bottom line is that the government has a bit to brag about when it comes to the labour market, but it’s best to keep the swagger in check. Employment did hold up well after the GFC, but has been relatively soft since the beginning of 2011.
There are now over 700,000 unemployed persons and another 900,000 who are underemployed, in the sense they would like to work more hours each week.  The immediate outlook for the labour market is relatively gloomy.
But my bigger beef with the claim that ‘we’ve created a million jobs’ is that this it is factually untrue.  Employers create jobs or taxpayers provide the money to enable public sector jobs to be created.  Governments do not create jobs.
Governments may provide an environment which is conducive to jobs growth.  Equally, they may erect barriers – regulations and taxes immediately spring to mind – which reduce the number of jobs that might otherwise be on offer.
If we consider where the jobs have come from over the past five years or so, we see that the strongest growth has been in health care and social assistance (see chart).  Many of the jobs in this sector are either in the public sector or are indirectly supported by government funding.  Moreover, health care and social assistance is now the largest single sector in employment terms, having overtaken retailing at the beginning of 2010.
Not surprisingly, employment in mining grew strongly over the period, in line with rising commodity prices, but we should not forget that there are still only some 260,000 jobs in mining (out of total number of employed persons of around 11.7 million) – and the number of jobs in mining is now falling.  In the year ending May 2013, the number of jobs in mining fell by some 16,000 or 6 per cent.
A fair proportion of the growth in professional, scientific and technical services jobs has been related to the mining boom.  In the year ending May 2013, employment in this sector also declined – down by 17,000 or 1.6 per cent.
Retail trade essentially moved sideways over the period, but has declined since 2011 and manufacturing has been in freefall for most of the period.
So where will the jobs come from in the future?  This was a question posed recently by Reserve Bank governor, Glenn Stevens, in a speech he gave to the Economic Society in Brisbane.  Essentially, his argument is that we don’t really know where the jobs will come from but there is no reason to despair.
He recalled the deeply dismal atmosphere of the early 1990s when there was a widely held view that unemployment would never fall – recall that unemployment peaked above 11 per cent – and there was very little confidence in the sources of new employment.
He notes that “areas of the economy that we often don’t think about have proven to be major drivers of growth. Over the 21 years to mid 2012, real GDP rose by about 100 per cent. Only 3 percentage points of that 100 per cent came from manufacturing. The largest contributions came from financial services (13 percentage points), mining (10 percentage points), construction (9 percentage points), professional services (8 percentage points) and health care (7 percentage points).”
Are there reasons to be optimistic about the prospects for the labour market as the economy now makes the difficult transition from one based almost entirely on mining investment to other sources of growth?
Hopefully, the falling dollar will restore some competitiveness to the traded goods sector – manufacturing, tourism, higher education – that has struggled over the past several years.
But there was another important comment made by Glenn Stevens in his speech.  He posed the question: “is the combination of regulatory structures of various kinds – however well-meaning and valid in their own terms – imposing unnecessary and excessive costs of compliance, or creating undue complexity for business?”
The key difference between now and twenty years ago is that, in the early 1990s, there was an acknowledgment that the government needed to get out of the way of business.  Now we have a government that has imposed more and more regulatory burdens on businesses across a range of areas – from industrial relations, development approvals, taxation, workplace health and safety – and the list goes on.
So don’t be fooled when a minister tells you that the government has created a million jobs.  What that person is not telling you how many jobs could have been created if the government had removed regulations, lowered tax and generally got out of the way.
This entry was posted in Uncategorized. Bookmark the permalink.

15 Responses to We created … jobs

  1. Governments do not create jobs, mate.
    Judith – you need to decide whether you’re a shrill or a journalist.
    If unemployment had risen under a Labor government you’d be shouting it from the rooftops.
    Your bias is remarkable, and your writings crass hackery.
  2. sabrina
    Judith – the problem is most politicians obfuscate or lie so much that after a while they become blissfully unaware of the fallacy of their statements.
    I mean politician’s on either side. Any good news – they will claim it; any bad news, they will blame on circumstances. It is going on for as long as I can remember, do not expect this to change unless the stranglehold of lawyers and accountants on political positions diminish. More engineers and open-minded scientists in decision making will be good.
  3. candy
    My understanding is that unemployment is highest it’s been for four years.
  4. Snoopy
    If unemployment had risen under a Labor government you’d be shouting it from the rooftops.
    Can’t you read? The unemployment rate HAS risen, you Labor shrill (sic).
  5. brc
    Governments do not create jobs. The statement is crap no matter which politician utters it.
    If politicians had e biking it create jobs, why not just create 10 million of them?
    The best they can do is remove restrictions or out in place law and order and stability to allow job creation to happen.
    Entrepreneurs create jobs. Even leaching positions like public servants are created from the surplus that is created by successful entrepreneurs. End of story.
  6. I meant shrill – not shill. The tone cannot be described in any other way.
    Bolt and Sloan are birds of a feather.
    Churnalists – incapable of analysis, and so biased that they’ve come out the other side and created a new, highly compromised, reality.
  7. Rabz
    Governments do not create jobs, mate.
    But they can certainly destroy them, as these kakistocrats have proven.
    Oh – could the spudpeeler’s whiny petulant rants be wiped, please? He should not be allowed to attack the contributors in the displayed manner above.
    Very poor form.
    you Labor shrill (sic).
    More typos. FFS, what a dork.
  8. Governments do not create jobs. </em
    The Glibertarian mantra.
    Try starting up a business armed only with entrepreneurial spirit, in an environment lacking laws, regulation, social stability and infrastructure. Think of Somalia.
    Somebody kicked over a rotting log – all kinds of weird stuff is being exposed.
  9. You are absolutely correct Judith. Governments do not create jobs. At best they can make it easier for others to create them.
    Even when they hire more public servants, they are not “creating” anything. The number of public servants might have gone up considerably under the Rudd/Gillard/Rudd government, but it is nowhere near a million either.
    Keep taking it up to them. You’ve obviously found a sore spot.
  10. Louis Hissink
    Any idea what proportion of those created jobs were in the public sector? Technically government doesn’t create jobs and as the incumbents don’t understand that, there’s no point laboring it (pun intended), I suppose.
    (Numbers, perhaps the shrillness is due your hearing aid being turned up too high)?
  11. Ivan Denisovich
    Governments do not create jobs
    I guess that depends how you define create.
    It’d be interesting to know the percentage of those that are public service jobs.
    I seem to recall reading about a large expansion of the public service under Beattie/Bligh as well (although I’m not certain). From the link:
    But this was at great political cost, with the Kennett government losing the 1999 election in part because of the dramatic cuts to the public sector to deal with the $33 billion debt it inherited.
    Labor adopting that strategy again:
    Brisbane is the Coalition’s most marginal seat in Queensland, according to Malcolm Mackerras’s pendulum. Looking farther afield, Labor’s campaign team is talking up an upset in Townsville-based Herbert (held by 2.2 per cent by Liberal Owen Jones), where job cuts at the local hospital have the people up in arms, reinforcing the connection Labor wants to establish between Campbell Newman’s hard-edged state LNP government and Abbott federally.
  12. Numbers, you need to decide whether you’re a card-carrying communist or a member of the human race. Your non-sequiturs are as transparent as your political leanings.
  13. Snoopy
    If unemployment had risen under a Labor government you’d be shouting it from the rooftops.
    Epic fail, Numbers. How embarrassment!
  14. Your non-sequiturs are as transparent as your political leanings.
    You meant to address that to Judith, obviously….
  15. Bruce
    The unemployment rate has risen from 4.9% to 5.7% in the last two years. During a boom in our terms of trade. At the same time unemployment has been falling in the US despite everything that Obama could do.
    That is Mr O’Connor’s legacy. There is no explanation except his government policies: mining tax, carbon tax, RET, live cattle, fisheries, forestry. The jobs destroyed by his government are legion.

Leave a Reply

Your email address will not be published. Required fields are marked *
You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>


Sent: Monday, July 29, 2013 9:31 AM
Subject: [New post] We created … jobs

Judith Sloan posted: "You have to laugh or cry, but Employment Minister, Brendan O'Connor and his advisers, didn't even get it.  Take this huffy letter he wrote to the Australian today: JUDITH Sloan questions my statement that Labor has created almost a million jobs ("Job crea"

Some 18 - 9 year olds... understandable to an average 18–19 year old

  • This Representative's speeches are understandable to an average 18–19 year old, going by the Flesch-Kincaid Grade Level  score.

Your email to the Hon Brendan O'Connor MP has been received.

Sent: Monday, July 29, 2013 9:39 AM
To: g87
Subject: Automatic reply: Congrats to Brendan O'Connor
Your email to the Hon Brendan O'Connor MP has been received.


From: g87
Sent: Monday, July 29, 2013 9:39 AM
Subject: Fw: Congrats to Brendan O'Connor

From: g87
Sent: Monday, July 29, 2013 9:39 AM
Subject: Congrats to Brendan O'Connor

Hello Minister O’Connor

Hello Judith Sloan

I sincerely congratulate you: over the last few years I have written many essays under the title of NOLO CONTENDER – on your favourite blog SOCIALIST DYSTOPIA. [GS]
You see Mr O’Connor – there have been literally hundreds of unanswered articles decimating your noble Party over merely  the past few years in The Australian.
Yoy may find the odd article by Judith Sloan being less than kind to your best performer – Mr Albanese  - unanswered as is the way you guys do things.

Until now.

Your heroic decision to actually ‘plead contest’ to Judith Sloan’s article is indeed heroic in the true Yes Minister mode.
It also has a wonderful religious theme – you know not what you do, Minister: I am in too much of a hurry to take a week’s break from my blog – am confident Judith S will blow you out of the proverbial water.

You see Minister – I barely contemplated /  read the tangents – and yet with almost pure ignorance – I verily write – ‘YOU WILL BE SORRY... 
This is what you guys have done to destroy any remaining  mortally – wounded virtues in socialism – I do not need to do research – or even elemental thinking -barely needing to read your heroics...

Big time – mess – up you have created – and it is certain you will not postulate a response to the inevitable decimation of your drivel.
So Mr O’Connor – I offer you this gratuituous advice – do not expose your unruly, non – contested twirps’ to further ridicule – look how elegantly gainfully wonderful Albanese was!

Yours Sincerely
Geoff Seidner


    If you wish to contact Brendan O'Connor you can send a letter to the above address,  an email or phone the office on 03 8390 6166