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The economics behind the ‘living wage’ debate

Australia has joined the global political trend towards greater wage regulation, with a recent campaign from the ACTU calling for a ‘living wage’. However, examining the predicted effects of such a change would reveal it to be based on misguided beliefs. Conor Yung explains.

The economic advantages of disabled labour inclusion

The Australian Bureau of Statistics describes a disability as ‘any limitation, restriction or impairment, which has lasted, or is likely to last, for at least six months.’ According to their 2012 Survey of Disability, Ageing and Carers (SDAC), more than four million Australians are affected by a disability. That equates to 18.5% of the population or nearly one in five people living in Australia.

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That old chestnut: revisiting the minimum wage

 While reading fellow ESSA contributor Joey Moloney’s article I came across the under-consumption paradox. This was something that I had grappled with before in trying to reconcile the microeconomic lessons about price floors and the minimum wage with macroeconomic lessons about aggregate income and expenditure and the Keynesian Cross. It seems many other people have observed this contradiction before, including Karl Marx.

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The Marxist critique of capitalism: explained but not endorsed

This article aims to provide a brief explanation of some of the key fallacies that Karl Marx observed as inherent in capitalism. The motivation to write this piece was not to endorse the subject matter, but was rather born from a proclivity to explore influential ideas. Before the concepts are presented, there are two important points to be made.

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Chinese GDP and growth: What’s in a number?

Recently China’s president Xi Jinping was quoted in saying that China’s GDP growth will be subdued in the foreseeable future, relative to the rapid growth in the past decade. China’s official newspaper Xinhua has put the internal target at 7.5% p.a. for 2013 from a 7.8% p.a. actual figure achieved in 2012, and many are undoubtedly aware that this is a 13-year record low. Exactly how much has the world’s second largest economy grown by and how has China done it?

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A ‘rational’ analysis of the ALP leadership debacle

What was Kevin Rudd thinking? Seriously. Why would anyone with an ostensibly insatiable desire for reclaiming the prime ministership let the precarious ambience of uncertainty develop to the extent that it did only to then decline an opportunity to challenge? Well, it turns out that Rudd was simply making the ‘optimal’ strategic choice given the circumstances he found himself in.

The leadership saga, for the most part, pertained to two closely related variables: firstly, whether Rudd would challenge Gillard by standing for the leadership in a caucus vote and, secondly, whether a majority of the 100 members eligible to vote in the Labor caucus would back Rudd in a ballot. The relationship between these is that, as was later confirmed, Rudd would only be comfortable challenging if he had a caucus majority and, additionally, the caucus members would only risk switching allegiances if they thought that Rudd would actually run for the leadership (due to the repercussions of supporting the loser in a ballot).

However, despite these two variables being inextricably linked, it’s important to note that other sources of influence further complicated the respective decision-making processes for both Rudd and caucus members.

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