Last week an interesting riposte to some industrial
relations claims by Peter Reith’s old chief of staff – sorry, disinterested
observer and Australian Chamber of Commerce and Industry boss – Peter Hendy
appeared on a notice board in the Press Gallery. Tim Colebatch, The Age‘s economics editor,
stuck up a graph of OECD unemployment figures.

Since the IR debate really kicked off ten
days ago, we’ve seen constant references
to the difference between Germany’s
inflexible labour markets and our own from the Prime Minister down. The
suggestion is that Germany’s unemployment and industrial relations
systems are linked.


What isn’t mentioned are the different ways
unemployment is defined in the two countries – let alone the implications
of absorbing the rustbelt nation of East Germany.

In Australia
you are deemed to be employed if you work one hour in the
survey week.

In Germany, if
you work less than 15 hours in the survey week and would like to work more you
are considered unemployed. Perhaps some wonk would like to tell us
what the respective unemployment rates in both countries would be if the same
definitions were used.

Then there were the various figures for
national levels of unemployment trotted out by Howard and his Workplace
Relations Minister, Kevin Andrew, at their joint presser.
This was the one where the hacks had about five minutes to get across the
details of the package before asking questions.

“The unemployment rate is a good indicator
of the relative success of labour market policies,” the PM said.
“Germany now has an
unemployment rate of 11.7%, France 9.9%, Spain 9.4%, the Euro area
generally, 8.6. In the United States, it is only 4.9. In the United
Kingdom it is
4.7 and in New Zealand it is 3.7. In Australia
it is 5.”

The journos obviously didn’t have a chance
to look up the OECD Standardised Unemployment Rates.
Pity. The two sets of figures are quite different.

The Prime Minister mightn’t know that many
European countries do not use the very narrow ILO definition of unemployment we use. But what we end up with is a case of comparing apples
with oranges.

And there are other comparisons that can be
made. “The Government continues to justify its radical industrial relations
changes by comparing Australia’s performance and labour market regulations with
selected OECD countries such as the UK, USA and NZ, but refuses to compare with
other OECD nations like the Scandinavian countries which are actually out
performing the UK, USA Australia and NZ,” Democrats Senator Andrew Murray said
in a media release last week.

“The Scandinavian countries have higher
regulation of IR than Australia, but they are better at creating jobs, are more productive and are
wealthier than we are. On the World Economic Forum’s 2005 Global
Competitiveness Ranking
,
Australia is ranked 10th most competitive country in the world compared to
Finland No 1, Sweden No 3, Denmark No 4, Iceland No 7, and Norway No 9.

“On average the Scandinavians do better on
jobs than Australia. Australia’s unemployment rate is 5%, Norway’s 4.6%, Sweden’s 6.3%, Denmark’s 4.8% and Iceland’s
3.0%. Norway, Iceland and Sweden all have lower long-term unemployment rates than Australia.

Murray also points to The Economist‘s world
wide quality of life index,
which includes measures of job security, gender equality and family relations
in 111 countries. Australia comes in at number six. The US is 13.
Norway and Sweden outrank us on three and five, while Iceland and Denmark
are close behind in seventh and ninth position.

Peter Fray

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