The Paradox of Rising Underemployment and Growing Hours

Paradoxically, underemployment and number of hours actually worked are both on the rise in Australia.

Dr. Anis Chowdhury, Associate of the Centre for Future Work, explains how these seemingly contradictory trends can coexist:

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Manufacturing: A Moment of Opportunity

In conjunction with the National Manufacturing Summit, titled "From Opportunity to Action," at Parliament House in Canberra on June 21, 2017, the Centre for Future Work has released a new research paper on the opportunities to sustain and expand manufacturing jobs in Australia.

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Record-Low Labour Compensation as Share GDP

Amidst increasing concerns among economists and budget forecasters about the historic stagnation of Australian wages, the latest GDP statistics from the Australian Bureau of Statistics have confirmed that the proportion of national economic output that is paid to workers has reached an all-time low.

New research from the Centre for Future Work at the Australia Institute confirms that total labour compensation (including wages, salaries, and super contributions) fell to just 46.2 percent of total national GDP in the March 2017 quarter.  That falls below the previous record low, 46.4 percent, dating back to 1959.

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Penalty Rate Transition: Update

The Fair Work Commission released two major decisions this week: its order regarding the timing for the implementation of reductions in penalty rates for Sunday and public holiday work in four major retail and hospitality awards, followed by its annual review of the general minimum wage.  It is interesting to review the combined impact that the two decisions will have on the wages of workers in sectors affected by the penalty rates decision.

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Of Levies, Profits, and Backstops: The Bank Tax in Context

The Australian government’s surprising decision to impose a new tax targeted precisely at the biggest financial institutions in the country continues to generate public debate.  We have reviewed the structure, likely effects, and economic and regulatory context of the proposed 0.06% levy on selected liabilities of the 5 largest financial institutions in Australia.

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Budget Wrap-Up

Commonwealth Treasurer Scott Morrison tabled his 2017-18 budget in Parliament House on May 9, and the Centre for Future Work's Director Jim Stanford was there in the lock-up to analyse its likely impacts.  Here are some of our main impressions and comments:

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Weekend Work and Penalty Pay in 108 Industries

As Australians debate the Fair Work Commission’ decision to reduce penalty rates for retail and hospitality workers, the Centre for Future Work has published new research on the prevalence of weekend work in other sectors of Australia’s economy – and the macroeconomic importance of extra income generated by weekend penalty pay.

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Economists Debunk Job-Creation Claims of Penalty Rate Cut

The Fair Work Commission has ruled that penalty rates for Sunday and public holiday work in the retail and hospitality sectors should be reduced, which would reduce hourly wages on those days by up to $10 per hour.  Business lobbyists predict this will spark a hiring surge in stores and restaurants, as employers take advantage of lower wages to extend hours and ramp up operations.  The economic logic of this claim is highly suspect, however -- especially in light of the fundamental factors which truly limit employment in these sectors (namely, the sluggish growth of personal incomes).  78 Australian economists have signed a public letter debunking these job-creation claims, arguing that the FWC's decision will lead to more inequality, not more employment.

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Don't Pop Champagne Corks Over Longest Growth Streak

On April 1, Australia will surpass the Netherland's old record to mark the longest unbroken expansion of real GDP in modern history.  While this result permits much chest-thumping on the part of some politicians, we should never assume that there is an automatic correlation between GDP growth and the well-being of people, society, and the environment.

In this guest commentary, Prof. Anis Chowdhury -- a new Associate of the Centre for Future Work, and a distinguished global economist -- provides some important perspective on this longest expansion in history.

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A Transition to Nowhere: "Phasing In" Lower Penalty Rates

Government and business leaders have proposed a range of possible “transition” mechanisms to ease the economic hardship, and defuse political anger, following the Fair Work Commission’s decision to cut penalty rates for work on Sundays and public holidays in the retail and hospitality industries.  This briefing note critically reviews several of these proposals. 

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