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It's Australia Day. A painful day for many, and increasingly a day of national reflection.
Perennial troll farm, the Institute of Public Affairs, chose today to publish a report they've called "The Decline of the Australian Way of Life".
Tl:dr : it's bonkers. A thread:
Perennial troll farm, the Institute of Public Affairs, chose today to publish a report they've called "The Decline of the Australian Way of Life".
Tl:dr : it's bonkers. A thread:
The hook: "The quality of the Australian way of life is collapsing".
This was a surprise to me, a growth economist who studies these things. Had there been some dramatic revision to the national accounts I wasn't aware of?
Let's dig into their methodology to find out.
This was a surprise to me, a growth economist who studies these things. Had there been some dramatic revision to the national accounts I wasn't aware of?
Let's dig into their methodology to find out.
The IPA constructs an index of 25 measures of different
aspects of Australia’s culture and economy, and then compares changes in this index between 2000 and 2020.
These are the 25 things they think summarise the quality of life in Australia.
aspects of Australia’s culture and economy, and then compares changes in this index between 2000 and 2020.
These are the 25 things they think summarise the quality of life in Australia.
The first thing to notice is what's NOT in the index: income, health and education.
Most people value these things a lot, so much so that they make up the UN's Human Development Index. Australia is 8th worldwide there, with consistent improvements in all three since 2000. Hmm.
Most people value these things a lot, so much so that they make up the UN's Human Development Index. Australia is 8th worldwide there, with consistent improvements in all three since 2000. Hmm.
Now let's go through the categories, equally weighted. They say there was an inflection point at the GFC, when things started getting noticeably worse. This appears to be driven by the Governance category, which falls a whopping 60 points since 2000.
What's that about? Looks like it's mainly the rise in government debt, from 10% of GDP to 35% in 2020, which is somehow a -102.6 fall in the index. Nevermind that this is is pretty low by international standards. Remember why we did that? Right: fighting the GFC, and COVID.
The rest of the categories are equally strange. Underutilization gets a mention, as the sum of unemployment and underemployment. I suspect this is to hide the fact that unemployment is dramatically lower now than the 90s.
My real favorite is prime age men in full-time work...this is supposed to make the index fall 4.6 points. First, ex covid doesn't look like anything. Second, are there no women in Australia? Or does the IPA not want us to think women working is desirable?
Boggling my mind is "Ratio of net jobs to net overseas migration". Supposed to measure whether immigrants are being absorbed by the labor market. Why not see whether immigrants are getting jobs directly? This just looks very close to cyclical job creation. And magnitude? -20%
This is all on top of presenting percentage changes of percentages...tricky to do at the best of times. Here, would we really say the marriage rate has declined 24% in Australia? Base numbers matter.
