Gillard says rates won’t stay at low levels
Federal employment Minister Julia Gillard has shied away from speculating on another interest rate rise in February on the back of Thursday’s positive jobs figures.
But she has once again reminded Australians that rates will not stay at what have been called “emergency levels” forever.
Positive figures for Australia’s jobless rate have increased the odds of the Reserve Bank implementing a fourth consecutive interest rise when it meets in February.
“I won’t speculate about what they may or may not do in the February board meeting,” Ms Gillard told ABC Television on Friday.
“The Reserve Bank governor (Glenn Stevens) has also been clear that interest rates won’t stay at emergency lows forever - Australians understood that.”
While welcoming the fall in the unemployment rate to 5.7 per cent, Ms Gillard said it still meant some 650,000 Australians actively seeking work were without a job.
The government was sticking by its forecast low of 6.75 per cent by mid-2010.
“I would obviously be delighted … if our forecast turned out to be pessimistic, but they are the most recent, official forecast from Treasury.”
She backed recent cuts made to skilled migration even as the country faces an impending skills shortage.
AAP
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Uram Orsism December 14, 2009
When you use the phrase “labor shortage” or “skills shortage” you’re speaking in a sentence fragment. What you actually mean to say is: “There is a labor shortage at the salary level I’m willing to pay.” That statement is the correct phrase; the complete sentence and the intellectually honest statement.
Some people speak about shortages as though they represent some absolute, readily identifiable lack of desirable services. Price is rarely accorded its proper importance in their discussion.
If you start raising wages and improving working conditions, and continue doing so, you’ll solve your shortage and will have people lining up around the block to work for you even if you need to have huge piles of steaming manure hand-scooped on a blazing summer afternoon.
If you think there’s going to be a shortage caused by employees retiring out of the workforce: Guess again: With the majority of retirement accounts down about 50% or more, most people entering retirement age are working well into their sunset years. So, you won’t be getting a worker shortage anytime soon due to retirees exiting the workforce.
Okay, fine. Some specialized jobs require training and/or certification, again, the solution is higher wages and improved benefits. People will self-fund their re-education so that they can enter the industry in a work-ready state. The attractive wages, working conditions and career prospects of technology during the 1980’s and 1990’s was a prime example of people’s willingness to self-fund their own career re-education.
There is never enough of any good or service to satisfy all wants or desires. A buyer, or employer, must give up something to get something. They must pay the market price and forego whatever else he could have for the same price. The forces of supply and demand determine these prices — and the price of a skilled workman is no exception. The buyer can take it or leave it. However, those who choose to leave it (because of lack of funds or personal preference) must not cry shortage. The good is available at the market price. All goods and services are scarce, but scarcity and shortages are by no means synonymous. Scarcity is a regrettable and unavoidable fact.
Shortages are purely a function of price. The only way in which a shortage has existed, or ever will exist, is in cases where the “going price” has been held below the market-clearing price.