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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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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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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Penalty Rates and the Gender Pay Gap

Today is International Women's Day, a time to reflect on the continued inequality faced by women -- including in the world of work.  Traditional measures of the "gender pay gap" indicate that women earn around 17 percent less than men, in ordinary pay in equivalent full-time positions.  But the situation is worse than that, because of women's disproportionate concentration in part-time work.  Including part-time workers, women now earn exactly one-third less than men.

The Fair Work Commission's announcement of coming reductions in penalty rates for Sunday and holiday work (of up to 50 percentage points of base wage) in the retail and hospitality sectors will clearly (if implemented) exacerbate the gender inequality in earnings.

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Principles for Effective Transitions in Carbon-Intensive Industries

As Australia and other countries shift their economies toward lower-carbon forms of energy and production, problems of displacement and transition for workers in carbon-intensive industries must be addressed as a top priority.  The coal-fired electricity generation industry is on the front lines of this challenge.

Centre for Future Work Director Jim Stanford was recently invited to give testimony to a Senate of Australia reference committee studying the future transition of the coal-fired electricity sector.

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Economic Benefits of Paid Domestic Violence Leave

Economic insecurity is one of the greatest factors inhibiting victims of domestic violence from escaping violent situations at home.  To address that problem unions and employers have developed paid domestic violence leave provisions which allow victims to attend legal proceedings, medical appointments, or other events or activities related to the violence they have experienced, without risk of lost income or employment.  Proposals have now been made to extend that provision to more Australian workers, by including a paid domestic violence leave provision in the Modern Awards (presently being reviewed by the Fair Work Commission), and/or by including it as a universal entitlement under the National Employment Standards.

This report considers the likely impact of such an extension on the payroll costs of employers, and finds it to be so small it would be difficult to measure: we estimate that incremental payments to workers taking the leave would amount to one-fiftieth of one percent (0.02%) of current payrolls.

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Portland Closure Would Have National Implications

The unit price of aluminium is more than 50 times greater than the unit price of bauxite.  Yet Australia is growing its presence at the lower-value end of this industry – while perversely shrinking its presence in an industry whose output sells for 50 times as much.  In recent years, Australia's downstream capabilities in aluminium manufacturing (including alumina refining, smelting, and secondary fabrication and manufacturing) have been substantially deindustrialised, even as exports of raw or barely-processed resources grow. Australia is shipping billions of dollars in value-added, and many thousands of jobs, to other countries.  This would get worse, if further manufacturing facilities -- such as the smelter in Portland -- are permanently closed.

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