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.Read more
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.Read more
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.Read more
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.Read more
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.Read more
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.Read more
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.Read more
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.Read more
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.Read more