Unpaid Overtime Diverts $130 billion Per Year

2017 marks the ninth annual Go Home On Time Day (GHOTD), an initiative of the Centre for Future Work at the Australia Institute aimed at highlighting the incidence of overwork among Australians, including excessive overtime (often unpaid). To investigate the prevalence of overwork and unpaid overtime, we commissioned a survey of over 1400 Australians on the incidence of overwork and Australian attitudes toward it. The results are surprising.

Our full report, Excessive Hours, Unpaid Overtime and the Future of Work, by Troy Henderson and Tom Swann, summarises the polling, and considers the implications for labour market policies.  Highlights include:

  • There is growing evidence of polarisation in Australian employment patterns, between those with full-time, relatively secure jobs, and a growing portion working part-time, casual, temporary, or insecure positions.  Barely half of working Australians are now employed in standard full-time jobs, with the rest in part-time, casual or self-employed positions.
  • Many full-time workers want to work fewer hours, but most of those in part-time or casual positions want more hours. The coexistence of overwork and underemployment is evidence that labour market polarisation and insecurity is hurting the work lives of millions of Australians.
  • Across all forms of employment, Australians work an average of 5.1 hours of unpaid labour per week (up from 4.6 hours in 2016). This unpaid labour represents between 14 percent and 20 percent of the total time spent working by Australian employees. 
  • The aggregate value of this “time theft” is large and growing. We estimate the total value of unpaid overtime in the national economy at over $130 billion in 2016-2017, up from $116 billion last year.
  • There would be significant economic, social, and health benefits from providing workers with stronger protections against unpaid overtime, and finding ways to better share available work.

Our report also investigates Australians' attitudes toward new technology in the workplace, including computerisation, automation, and digital platforms (or "gigs"):

  • Australians agree that there are significant potential benefits from new technology, and that those benefits could be experienced by businesses, consumers, and workers.  Benefits for workers could include higher incomes, shorter working hours, or a combination of the two.
  • When asked which benefits they would prefer, Australians generally want to see both higher incomes and shorter working hours. 60 percent want to see higher incomes (either on their own, or in conjunction with shorter working hours), while 57 percent want to see shorter working hours (either on their own, or in conjunction with higher incomes). Australians want to see a balance between a higher material standard of living, and more time off to enjoy that standard of living.
  • However, when thinking about their own workplaces, Australians fear employers will use new technology primarily to reduce employment levels (rather than increasing incomes or reducing average working hours).  57 percent of workers think their employer will respond to new technology by reducing employment. Only 18 percent expect shorter working hours to be the outcome of technological change, and only 14 percent expect higher incomes.
  • This suggests that while Australians see the potential of new technology to improve their lives, they worry that the implementation of new technology may not translate into gains for workers.

The jarring coexistence of overwork and underemployment, and the contradiction between Australians’ optimism regarding the potential benefits of technology and their fears about what will happen in their specific workplaces, both suggest a need for more pro-active labour market strategies to share work across all groups of workers, and to enhance the security and stability of jobs. To translate the promise of new technology into concrete benefits for workers (both higher incomes and more leisure time) will require effective measures to limit overtime (including unpaid overtime), enhance the stability of work (especially for workers in the growing number of non-standard jobs), and give workers more say in how new technology is managed.


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