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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Beyond Belief: Contruction Labour and Housing Costs

Remember when Prime Minister Turnbull and Immigration Minister Dutton blamed unionized construction workers for the high cost of housing in Australia? The idea that workers (not property speculators or bankers) are to blame for the property bubble is pretty far-fetched -- in fact, it sparked a viral storm on social media, using the #blameunions hashtag.

We've looked in detail at the empirical data regarding the relationship (or lack thereof) between unions, construction wages, and housing prices.  The results are surprising...

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Go Home on Time: Wednesday 23 November

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The Centre for Future Work is proud to host this year's Go Home on Time Day.  It's the eighth annual edition of this event, which draws light-hearted attention to a serious issue: the economic, social, and health consequences of excess working hours.

This year's Go Home on Time Day is Wednesday, November 23.  Visit our special Go Home on Time Day website for more information, to download posters and other materials, and use our online calculator to estimate the value of YOUR unpaid overtime.

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Auto Industry Closure Another Economic Blow

We’ve known for over two years that this day was coming.  But that won't ease its economic and social pain.  The shutdown of Australia's mass motor vehicle assembly industry is now upon us.  Ford’s assembly plant in Broadmeadows, Victoria, was the first to go dark: the final Aussie-made Ford has already rolled off the assembly line.  Remaining workers are preparing the factory’s final shutdown.  Holden’s assembly plant in Elizabeth, SA, and Toyota’s Altona factory (also in Victoria), are scheduled to close next year; both have already begun phasing down production.  Engine plants operated by Ford and Holden will also close.

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Penny Wise, Pound Foolish

The state government of New South Wales recently awarded a contract for the purchase of 512 new intercity passenger rail cars to a consortium that will manufacture the equipment in South Korea.  The contract is worth $2.3 billion, including an unspecified sum to cover maintenance of the double-decker cars over an initial 15-year period.  The government chose to import the cars from Korea instead of purchasing made-in-Australia products, claiming this was the "cheapest" option.  However, major government purchases have important indirect effects on many economic, social, and fiscal variables: including GDP, employment, incomes, exports, and even government revenues.  A comprehensive cost-benefit analysis must take those broader impacts into consideration; governments should make decisions that maximize the overall social net benefit of procurement, not simply minimize the up-front purchase cost to government.

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A few hard numbers

In this briefing paper Jim Stanford digs beneath vague claims about economic competence and friendliness to business, and considers more concrete indicators of economic progress. The paper asks: is there any correlation between the policy outlook of those respective governments, and in particular its “business credentials,” and Australia’s real economic progress?

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