Minimum Hour Laws

An article in The Australian reports on the ridiculous consequences of the Fair Work Act requirements for minimum hours of work. Here are some of the victims of this outrageous policy:

But Matthew and five other youths, all aged between 16 and 18, have been sacked from the Terang and District Co-operative, 210km southwest of Melbourne, because the Rudd government’s Fair Work Act won’t let them work less than three hours a day.

Both the youths and their employer had wanted to continue their longstanding arrangement and are furious the new law does not allow for the flexibility needed to keep them employed. Co-operative general manager Mr Duynhoven said those of his employees still at school could only get to work by 4pm, after school finished, and the store closed at 5.30pm, so there was only 1.5 hours of work available.

Julia Gillard has defended the system:

A spokesman for Workplace Relations Minister Julia Gillard said the new system was fairer.

“The government does not think it’s unreasonable to have a set of minimum standards for employees, including the minimum number of hours they can work across Australia, as has been brought in under the simplified modern system.”

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Unemployment & DSP

Good economic news today, with reported unemployment dropping from 5.8% to 5.7%. It is looking increasingly like I was right to be optimistic about the economy.

It’s just a shame that Rudd had to waste billions of dollars on impotent fiscal policy, it’s a double-shame that he will get the credit for a recovery that was always on the cards, and it’s a triple-shame that the hangover from the fiscal policy will lead to a slightly slower economic growth. Still, good news is good news, and low unemployment is worth celebrating.

But a work-mate just pointed out an interesting factoid.

Over the past quarter there has been a rapid increase in the number of people going on the Disability Support Pension (DSP). This makes sense. In a downturn, it becomes relatively more attractive to get DSP payments and so we are hit with an epidemic of “bad backs” and “depression”.

I decided to check the consequences of the “DSP mini-boom” on the unemployment number. DSP recipients don’t count towards unemployment… But without DSP, those people would have been on Newstart Allowance, and would be counted as unemployed.

The conclusion was that without the DSP mini-boom, the unemployment rate would still be 5.8%.