Contents: Calm before storm and House of Cards refer to the economy, Future of work and Protection and risk.
The QLD election has come and gone, and I welcomed the brevity. We are now into another Christmas and the heat is on. The calm before the storm refers to both Qld’s debt – $71.98 billion, and the Commonwealth government debt. In June this year the Commonwealth debt reached more than $499 billion. Gross debt will hit $725 billion in 2027-28, according to the budget documents, but by international standards, Australian government debt remains low !!! The most relevant figure of net debt, gross debt minus the country’s financial assets, currently sits at $300 billion or 20 per cent of GDP. (Source: Sydney Morning Herald, reporter Eryk Bagshaw, June 14, 2017)
The majority of this blog features a Report on the economy by Matt Barrie, co- authored with Craig Tindale. The Report concerns the future of Australia’s economy and in every way this influences all of us, our children and grandchildren. The Australian economy as a whole, has grown through a property bubble inflating on top of a mining bubble, built on top of a commodities bubble, driven by a China bubble.
Societe Generale’s China economist Wei Yao said recently, “Chinese banks are looking down the barrel of a staggering $1.7 trillion — worth of losses”. Chinese bank losses “could exceed 400% of the U.S. banking losses incurred during the subprime crisis”. These losses are largely the result of debt-bloated and unprofitable state-owned enterprises (SOE). But be aware 2008 banking assets in China were at $8 trillion , today they are close to $45 trillion.
A hard landing for China is a catastrophic landing for Australia, over one third of our exports go to China. In 2007 when the GFC unfolded the US Federal Reserve cut short term interest rates. When that didn’t work – to curb rising unemployment and stop growth stagnating, central banks across the globe started printing money which they used to buy up financial securities in an effort to drive up prices. This process is called quantitative easing (“QE”), to confuse the average person in the street into thinking it wasn’t anything more than conjuring trillions of dollars out of thin air and using that money to buy things in an effort to drive prices up.
In theory making money cheap to borrow stimulates investment in the economy; it encourages households and companies to borrow, employ more people and spend more money. An alternative theory for QE is that it encourages buying hard assets by making people freak out that the value of their currency is being undermined e.g., real estate.
Europe and Asia were dragged into the GFC crisis, as major European and Asian banks were found holding billions in toxic debt linked to U.S. subprime mortgages (more than 1 million U.S. homeowners faced foreclosure). One by one, nations began entering recession and repeated attempts to slash interest rates by central banks, along with bailouts of the banks by governments and various stimulus packages, seemed unable to stymie the unfolding crisis. After several failed attempts at instituting austerity measures across a number of European nations with mounting public debt, the European Central Bank began its own QE program that continues today and should remain in place well into 2018.
In China, QE was used to buy government bonds which to finance infrastructure projects such as overpriced apartment blocks, the construction of which have underpinned China’s “miracle” economy. Since nobody in China could actually afford these apartments, QE was lent to local government agencies to buy these empty flats.
Of course this then led to a tsunami of Chinese hot money fleeing the country and blowing real estate bubbles from Vancouver to Sydney as it sought more affordable property in cities whose air, food and water didn’t kill you. I refer here to China’s regulatory crackdown.
It wasn’t until September 2017 that the U.S. Federal Reserve finally announced an end to the current QE program, with a plan to begin selling-off and reducing its own US$4.5 trillion portfolio beginning in October 2017. The US national debt is currently US$20 trillion and rising daily. Pictured – The then Fed chair, Janet Yellen Photograph: Susan Walsh/AP
How these central banks plan to sell these US$19 trillion in assets without completely blowing up the world economy is anyone’s guess. That’s about the same in value as trying to sell every single share in every single company listed on the stock markets of Australia, London, Shanghai, New Zealand, Hong Kong, Germany, Japan and Singapore. I would think a primary school student would be able to tell you that this is all going to end up going horribly wrong.
Chinese investors, starved of opportunity and restricted by government clamp downs in equities, piled into commodities markets. In April of 2016, there was enough cotton trading in a single day to make a pair of jeans for everyone on the planet, and enough soybeans for 56 billion servings of tofu, according to Bloomberg in a report entitled “The World’s Most Extreme Speculative Mania Unravels in China”.
Market turnover on the three Chinese exchanges jumped from a daily average of about $78 billion in February to a peak of $261 billion on April 22, 2016 — exceeding the GDP of Ireland. By comparison, Nasdaq’s daily turnover peaked in early 2000 at $150 billion.
In April 2016, the average holding period for steel rebar and iron ore contracts was less than 3 hours. The Chief Executive of the London Metal Exchange, said “Why should steel rebar be one of the world’s most actively-traded futures contracts? I don’t think most people know what it is. Steel, of course, is made from iron ore. Australia is the largest exporter of iron ore in the world, with a 29% global share in 2015–16 and 786Mt exported, and at $48 billion we’re responsible for over half of all global iron ore exports by value. Around 81% of our iron ore exports go to China. In May 2017, stockpiles at Chinese ports were at an all time high. Last January, China pledged “supply-side reforms” for its steel and coal sectors to reduce excessive production capacity. (Image courtesy of BLUESCOPE Steel)
Over the last six years, the price of iron ore has fallen 60%. DBS Bank expects that global demand for steel will remain stagnant for at least the next 10–15 years. Chinese steel demand and production have peaked and are declining. (Source image below : AFP via DBS Bank article above)
Think again – Australia’s second biggest export is coal, being the largest exporter in the world supplying about 38% of the world’s demand. Production has been on a tear, with exports increasing from 261Mt in 2008 to 388Mt in 2016.
While exports increased by 49% over that time period, the value of those exports has collapsed 38%, from $54.7 billion to $34 billion. Coking coal which is used in the production of steel is in decline. Thermal coal, on the other hand, is substantially on the nose, and while usage is still climbing in non-OECD nations, it is already in terminal decline in OECD nations. Recently, in April 2017, the United Kingdom experienced its first day without burning coal for electricity since the industrial revolution in the 1800s.
Australia’s top export market for coal is Japan, and the unfortunate news is that the ramp up in coal exports here is a short lived adaptation after power companies idled their nuclear reactors in the wake of the Fukushima disaster. Between a zombie economy with fertility levels far below replacement rate, Japan’s population is shrinking and thus net electricity generation has also been declining in Japan since 2010. (Image – courtesy of Qld Resources Council)
Coal consumption in China has dropped three years in a row, and in January 2017, 100 coal fired power plants were cancelled. China has announced that it is spending a whopping $360 billion on renewables through 2020, and this year is implementing the world’s biggest cap-and-trade carbon market to curb emissions.
Blind to the reality of this situation, Australia is ramping up coal production while China commits to ending coal imports in the very near future. (Image source: 6 solar and wind power farms in Nth West China, Source AP/ NG Han Guan )
Moodys recently downgraded the ratings of several Australian coal ports– including Adani’s Abbot Point. Despite all of this, some in government can’t get their head around why the Big Four banks and major investment banks including, Citigroup, JPMorgan, Goldman Sachs, Deutsche Bank, Royal Bank of Scotland, HSBC and Barclays are not keen to fund the gargantuan Carmichael coal project in Queensland’s Galilee Basin.
(Source : Credit IRENA, Renewable Energy jobs in selected countries, excluding large Hydro)
Former deputy Prime Minister, Barnaby Joyce wants Australian taxpayers to be the lenders of last resort to Adani, in the form of $900 million to build a rail line from their proposed Carmichael Thermal Coal Mine to the port at Abbot Point, where it would be shipped to India. Adani is looking for a handout because, unsurprisingly, the banks knocked them back. The project was too risky and the public backlash against the project has been overwhelming. If it does go ahead, it is likely to be a rail line to nowhere, because by the time it opens, there is a chance that the project will be unviable.
What makes the Adani project so absurd is that India has recently cancelled more than 500 gigawatts of planned coal projects and the Indian government has said, however realistic that may be, that it intends to phase out thermal coal imports- precisely the type of coal Carmichael produces- entirely by 2020.
It’s even more perplexing when you consider that 2016 was the year that solar became cheaper than coal, with some countries generating electricity from sunshine for less than 3 cents per kilowatt-hour (which is half the average global cost of coal power), wind power is now cheaper than coal in India.
Losing coal as an export will blow a $34 billion dollar per annum hole in the current account, and there’s been no foresight by successive governments to find or encourage modern industries to supplant it.
(Image: Australian Treasurer Scott Morrison gazes wistfully at a lump of coal. Source: AAP, Lukas Coch)
Our “economic miracle” of 104 quarters of GDP growth without a recession today doesn’t come from digging rocks out of the ground, shipping the by-products of dead fossils and selling stuff we grow any more. Mining, which used to be 19% of GDP, is now 6.8% and falling. Even combined with agriculture the total is now only 10% of GDP.
According to PIMCO’s Gene Fried “the question now is not if China slows, but rather how fast”. This will cause even more problems for Australia’s flagging resources sector. (Image curtesy of PIMCO)
The “economic miracle” of GDP growth is also certainly not from manufacturing, which has collapsed in the last decade from 10.8% to 6.6% of Gross Value Add. This is even before the exit of Australia’s last two remaining car manufacturers, Toyota and Holden, who both shut up shop in 2017. Ford closed last year. Job losses from the closure of manufacturing since 1990 have totalled a staggering 329,200.
Australia doesn’t make anything anymore, far from its manufacturing base being ‘hollowed out’ it is non existent. Although it does not feel like it, “with an economy that is 68% services, as I believe John Hewson put it, the entire country is basically sitting around serving each other cups of coffee or, as the Chief Scientist of Australia would prefer, smashed avocado.”
Australian exports are now a low 20% of GDP. Productivity is virtually zero. For fifteen years capital has been consistently and massively mis-allocated into unproductive assets.
Successive Australian governments have achieved economic growth by blowing a property bubble on a scale like no other.
This bubble has lasted for 55 years and seen prices increase 556% since 1961, making this the longest running property bubble in the world (on average, “upswings” last 13 years). In 2016, 67% of Australia’s GDP growth came from the cities of Sydney and Melbourne where both State and Federal governments have done everything they can to fuel a runaway housing market.
Between Sydney, Melbourne and Brisbane, there are now 586 cranes in operation, with a total of 685 across all capital cities, 80% of which are focused on building apartments. There are 350 cranes in Sydney alone. By comparison, there are currently 28 cranes in New York, 24 in San Francisco and 40 in Los Angeles. There are more cranes in Sydney than Los Angeles (40), Washington DC (29), New York (28), Chicago (26), San Francisco (24), Portland (22), Denver (21), Boston (14) and Honolulu (13) combined.
According to UBS, around one third of these cranes in Australian cities are in postcodes with ‘restricted lending’, because the inhabitants have bad credit ratings.
This can only be described as completely “insane”.
(Pic – An Auctioneer yells out bids in the middle class suburb of Cammeray. Source: Reuters courtesy of ‘House of Cards’ Report)
Already at the time of the GFC, Australian households were at 190% debt to net disposable income, 50% more indebted than American households, but then things really went crazy.
The government decided to further fuel the fire by “streamlining” the administrative requirements for the Foreign Investment Review Board so that temporary residents could purchase real estate in Australia without having to report or gain approval. It may be a stretch, but one could possibly argue that this move was cunningly calculated, as what could possibly be wrong in selling overpriced Australian houses to the Chinese?
I am not sure who is getting the last laugh here, because as we subsequently found out, many of those Chinese borrowed the money to buy these houses from Australian banks, using fake statements of foreign income. Indeed, according to the AFR, this was not sophisticated documentation — Australian banks were tricked with photoshopped bank statements that can be bought online for as little as $20.
Llewellyn-Smith writes, “Five prime ministers in [seven] years have come and gone as standards of living have fallen in part owing to massive immigration inappropriate to economic circumstances and other property-friendly policies. The most recent national election boiled down to a virtual referendum on real estate taxation subsidies. The victor, the conservative Coalition party, betrayed every market principle it possessed by mounting an extreme fear campaign against the Labor party’s proposal to remove negative gearing. (Cartoon : pro bono courtesy of Simon Kneebone, cartoonist and illustrator)
The astronomical rise in house prices certainly isn’t supported by employment data. Wage growth is at a record low of just 1.9% year on year in 2017, the lowest figure since 1988. The average Australian weekly income has gone up $27 to $1,009 since 2008, that’s about $3 a year. This is private sector wage policy not government sector wage policy.
Ex-deputy Prime Minister Barnaby Joyce (pictured) recently said to ABC Radio, “Houses will always be incredibly expensive if you can see the Opera House and the Sydney Harbour Bridge, just accept that. What people have got to realise is that houses are much cheaper in Tamworth, houses are much cheaper in Armidale, houses are much cheaper in Toowoomba”. Fairfax, the owner of Domain, or more accurately, Domain, the owner of Fairfax, also agrees that “There is no housing bubble, unless you are in Sydney or Melbourne”.
Now probably unbeknown to Barnaby, in the Demographic International Housing Affordability survey for 2017 Tamworth ranked as the 78th most unaffordable housing market in the world. No, you’re not mistaken, this is Tamworth, New South Wales, a regional centre of 42,000 best known as the “Country Music Capital of Australia” and for the ‘Big Golden Guitar’. According the Australian Bureau of Statistics, the average income in Tamworth is $42,900, the average household income $61,204 but the average house price is $375,000, giving a price to household income ratio of 6:1, making housing in Tamworth less affordable than Tokyo, Singapore, Dublin or Chicago.
Unsurprisingly, the CEOs of the Big Four banks in Australia think that Australian house prices are “justified by the fundamentals”. The Big Four issue over 80% of residential mortgages in the country, they are more exposed as a percentage of loans than any other banks in the world, over double that of the U.S. and triple that of the U.K., and remarkably quadruple that of Hong Kong, which is the least affordable place in the world for real estate.
Today, over 60% of the Australian banks’ loan books are residential mortgages. Houston, we have a problem.
It’s actually worse in regional areas where Bendigo Bank and the Bank of Queensland are holding huge portfolios of mortgages between 700 to 900% of their market capitalisation, because there’s no other meaningful businesses to lend to.
Indeed Digital Finance Analytics estimated in an October 2017 report that 910,000 households are now estimated to be in mortgage stress where net income does not cover ongoing costs. This has skyrocketed up 50% in less than a year and now represents 29.2% of all households in Australia. Things are about to get real.
It’s well known that high levels of household debt are negative for economic growth, in fact economists have found a strong link between high levels of household debt and economic crises. This is not good debt, this is bad debt. It’s not debt being used by businesses to fund capital purchases and increase productivity. That would be a smart use of debt. No, our government loves Australians buying up houses, particularly new apartments, because in the short term it stimulates growth — in fact it’s the only thing really stimulating GDP growth.
Everyone’s too busy watching Netflix and too cash strapped paying off their mortgage to have much in the way of any discretionary spending. No wonder retail is collapsing in Australia. Rather than modernising the economy, they have us on a debt fuelled housing binge, a binge we can’t afford. (Sorry girls – Ellie and Izzi, I know you’re watching Googlebox but I’m sure my readers get what I mean !)
Today 42% of all mortgages in Australia are interest only, because since the average person can’t afford to actually pay for the average house – they only pay off the interest. They’re hoping that the value of their house will continue to rise and the only way they can profit is, if they find some other mug to buy it at a higher price. In the case of Westpac, 50% of their entire residential mortgage book is interest only loans. And a staggering 64% of all investor loans are interest only. This is rapidly approaching ponzi financing.
This is the final stage of an asset bubble before it pops. In the event that the Australian bubble were to pop then Australians will certainly be the last to know. Both Murdoch and Fairfax (nee Domain) rely heavily on real estate advertising and the propaganda is so thick that they may never find out until they actually try to sell.
This brings me onto Australia’s third largest export which is the $22 billion in “education-related travel services” – an immigration industry dressed up as “education”. You now know what all these tinpot “english”, “IT” and “business colleges” that have popped up downtown are about. They’re not about providing quality education, they are about gaming the immigration system.
In 2014, 163,542 international students commenced English language programmes in Australia, almost doubling in the last 10 years. This is through the booming ELICOS (English Language Intensive Courses for Overseas Students) sector, the first step for further education and permanent residency. This whole process doesn’t seem too hard when you take a look at what is on offer. While the federal government recently removed around 200 occupations from the Skilled Occupations List, you can still immigrate to Australia as a Naturopath (252213), Baker (351111), Cook (351411), Librarian (224611) or Dietician (251111). (Pictured Melbourne No 5 of the 10 best cities to be a student in.)
Believe it or not, up until recently we were also importing Migration Agents (224913). You can’t make this up. I simply do not understand why we are importing people to work in relatively unskilled jobs such as kitchen hands in pubs or cooks in suburban curry houses. At its peak in October 2016, before the summer holidays, there were 486,780 student visa holders in the country, or 1 in 50 people in the country held a student visa. The grant rate in 2016 for student visa applications was 92.3%. The number one country for student visa applications by far was, you guessed it, China.
Foreign investment can be great as long as it flows into the right sectors. Around $32 billion invested in real estate was from Chinese investors in 2015–16, making it the largest investment in an industry sector by far. By comparison in the same year, China invested only $1.6 billion in our mining industry. Almost none of Chinese investment in Australia, flows into our technology sector. (Source: Image, Newscorp, digital reportage email@example.com)
The total number of FIRB (Foreign Investment Review Board) approvals from China was 30,611. Foreign investment into real estate was the largest sector for foreign investment approval at $112 billion, accounting for around 50% of all FIRB approvals by value and 97% across all sectors — agriculture, forestry, manufacturing, tourism — you name it in 2015–16. Of the 41,450 applications by foreigners to buy something in 2015–16, five were rejected. In the year before, out of 37,953 applications zero were rejected.
People vital for running the economy can’t afford to live here any more. What is also remarkable about all of this is that technically, the Chinese are not allowed to send large sums of money overseas. Citizens of China can normally only convert US$50,000 a year in foreign currency and have long been barred from buying property overseas, but those rules have not been enforced. They have only started cracking down on this now.
Since the crackdown in capital controls, Lend Lease says there has been a big upswing with between 30 to 40% of foreign purchases now being cash settled. Other developers are reporting that some Chinese buyers are paying 100% cash. The laundering of Chinese cash into property isn’t unique to Australia, it’s just that Transparency International names Australia, in their March 2017 report as the worst money laundering property market in the world.
Australia’s GDP of $1.6 trillion is 69% services. Our “economic miracle” of GDP growth has previously come from digging rocks out of the ground, shipping the by-products of dead fossils, and stuff we grow. Mining, which used to be 19%, is now 7% and falling. Combined, the three industries now contribute just 12% of GDP thanks to the global collapse in commodities prices.
Indeed if you look at the budget, about the only thing going up in terms of revenue for the federal government are taxes on you having a good time- taxes on beer, wine, spirits, luxury cars, cigarettes and the like.
It would probably shock the average person on the street to discover that the government collects more tax from cigarettes ($9.8 billion) than it collects from tax on superannuation ($6.8 billion), over double what it collects from Fringe Benefits Tax ($4.4 billion) and over thirteen times more tax than it does from our oil fields ($741 million).
Turnbull is increasing the tax on cigarettes by 12.5% a year for the next four years. In the latest federal budget, the government forecasts that by 2020 they will have collected $15.2 billion from taxes on tobacco per annum. This is four times the amount that the government collects from the entire coal industry per annum.
Just compare these numbers: $15 billion is over double what the government projects it will collect from petrol excise in that year ($7.15b), 21 times what it will collect from luxury car tax ($720m), 27 times what it will collect from taxes on imported cars ($560m) and 89 times what it will collect from customs duty on textile and footwear imports ($170m)..
If you look through federal budget forecasts, taxes on cigarettes is the only thing practically floating the federal government’s finances other than wishful thinking in forward projections.
If the government wants to fix the budget, I would have thought the most practical way to do it would be to find ways to grow the economy.
Here’s a crazy idea: the dominant government revenue line is income tax. Income tax is generated from wages. Education has always been the lubricant of upward mobility, so perhaps if we find ways to encourage our citizens to study in the right areas — for example science & engineering — then maybe they might get better jobs or create better jobs and ultimately earn higher wages and pay more tax.
Instead the government proposed the biggest cuts to university funding in 20 years with a new “efficiency dividend” cutting funding by $1.2 billion, increasing student fees by 7.5 percent and slashing the HECS repayment threshold from $55,874 to $42,000. These changes would make one year of postgraduate study in Electrical Engineering at the University of New South Wales cost about $34,000.
We should be encouraging more people into engineering, not discouraging them by making their degrees ridiculously expensive. The technology industry is inherently entrepreneurial, because technology companies create new products and services.
A semiconductor fabrication plant makes automation of a mine possible. It powers the robotics, the AI and the software — not just for the iron ore mine, but factories and businesses all over the world. It’s the real productivity and wealth multiplier. It’s a long term sustainable, competitive advantage. Smart and efficient resource extraction is just an application of this technology.
Today, the largest public company in the world, Apple, is a technology company. Apple’s market capitalisation of $810 billion is bigger than the entire US retail market sector. Its revenue of over $215 billion generates over US$2 million dollars per employee per year. And that’s just the company directly.
The largest four companies by market capitalisation globally as of the end of 2017 globally were Apple, Alphabet, Microsoft and Amazon. Facebook is eight. Together, these five companies generate over half a trillion dollars in revenue per annum. That’s equivalent to about half of Australia’s entire GDP. And many of these companies are still growing revenue at rates of 30% or more per annum. With our population of 24 million and labour force of 12 million, there’s no other industry that can deliver long term productivity and wealth multipliers like technology.
Today Australia’s economy is in the stone age. Literally.
Meanwhile, in Estonia, 100% of publicly educated students will learn how to code starting at age 7 or 8 in first grade, and continue all the way to age 16 in their final year of school. (Source: Geek.com., reporter Matthew Humphries)
If there is one thing, and one thing only that you do to fix the technology industry in this country, it’s get more people into it. To me, the most important thing Australia absolutely has to do is build a world class science & technology curriculum in our K-12 system so that more kids go on to do engineering.
This is where I am leaving the House of Cards to talk about the solutions to the above mess.
So how do you fix K-12 education in this country so that we can drive innovation in the future? It’s the remit of the bureaucracy of the State Governments. Matt Barrie has difficulty in persuading any programmer to come to Australia, it is a backwater, so where do we begin? Reporting in The Australian Financial Review on 27 November, Professor Peter Noonan said apprenticeships in Australia are structured too narrowly. plumbing and mechanics should include high-end manufacturing and financial services. The concept of a degree apprenticeship has been introduced in the UK, we should look at that. (Pic: Warwick Johnstone, estimator for Perth company, completed an Australian school apprenticeship, now studying for a Bachelor of Construction Management.)
In Switzerland, which is ranked No. 1 in the world talent ranking for the implementation of apprenticeships, prepares students for management positions from the very beginning. Some of the top executives in Switzerland did not go to university, they started out with apprenticeships/internships in companies that took an interest in them and developed their abilities. We need business who are prepared to expand the idea of training.
And now we get to the crunch. Peter Goss reporting also in the AFR, said the Australian school education system is not fit for purpose. David Gonski’s “Review to Achieve Excellence in Australian Schools” is due to report next March and it won’t be a moment too soon, his review offers a reform opportunity that must be seized.
Student outcomes improve when teachers track how much their students are learning and identify specific teaching practices that boost learning. Australia should follow the lead of high-performing education systems such as Singapore and Hong Kong by making better use of our best teachers and further more, recruiting the best students to becomes teachers in the future, particularly in Science, Technology, Engineering and Maths. There should be more emphasis placed on mentoring of teachers by specialists in their field, and that probably means recruiting from abroad. So much for the 457 visa, we need brilliant teachers to pull our students up to a world class standard of education, not later but now. (Pictured Rachel Duk, previously aircraft maintenance engineer with QANTAS, now In 2017, Rachel is working for Aviation Australia as their Sales and Business Development Manager – International.)
Reading in Forge, Vol 3, 2017, on the Future of Work, the following points were raised. Casualisation is growing considerably, between mid 2012 and mid 2016, the number of workers without leave entitlements, rose by 110,000 and the number of independent contractors rose by 51,300. The exact impact for Australia is going to be incredibly dependent on how the economy plays out. There is also underemployment, according to the ABS the under-utilisation rate, those unemployed and underemployed is 14.3%. Workers are struggling to get enough hours. The ACTU (Australian Council of Trade Unions), said 48% of all employees who have no entitlements are in three industries, retail, accommodation and food, and health care and social assistance. About one third of employees aged 15-34 are without leave entitlements or superannuation, compared with one in five aged 35 and over.
We are competing with workers from other countries where wages are lower and no doubt, so is the standard of living. There is a high probability that 40% of Australia’s workforce (more than 5 million people) could be replaced by automation within the next decade or so. The emphasis will be on knowledge work, which will make it more likely that workers will seek self employment and greater specialisation.
While the ‘gig’ economy is well established more than half use that economy to supplement their incomes rather than earning their primary living from this source. About 42% in the gig economy have this situation as their primary source of income. But again traditional workers in full time employment working 9-5 fare much better when it comes to income security and income levels. New Zealand information technology analyst Peter Harrison argues that society will one day comprise two groups, immortals, people who create and use technologies and the ‘precariat’ people whose circumstances are permanently precarious. (Photo credit DANIEL LEAL-OLIVAS/AFP/Getty Images)
There are a lot more people in lower skilled jobs who are overqualified for them and would prefer to work in more skilled and engaging work. Companies are rapidly finding out that the difference between them and the next business is the human element that provides the competitive advantage. Areas that are innately human – empathy, service, creativity and critical thinking, this is where humans will be valued.. healthcare and therapy work.
We have serious problems in this country. And I think they are about to become more so. We are on the wrong trajectory. The national conversation needs to change, we cannot afford to be complacent.
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