Workers’ Share of Economic Pie Shrinks Again

For the third consecutive quarter, the share of Australian GDP paid out in wages, salaries and superannuation contributions to workers has shrunk.  Data for the September quarter of 2018, released by the Australian Bureau of Statistics on Wednesday, shows that labour compensation accounted for just 46.85% of total economic output – one of the lowest on record.

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Private Sector Wage Growth Still in Doldrums

New data on private-sector business conditions confirm that wage increases paid in the private sector of Australia’s economy continue to plumb record lows.

The ABS’s quarterly Business Indicators report, released yesterday, indicates total wages and salaries paid out by private businesses grew 4.3 percent in the September quarter, compared to year-earlier levels. This only slightly exceeded the increase in total private sector employment during the same period. As a result, wages and salaries paid per employed worker grew very slowly – by just 0.43 percent over the year.

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New Book: The Wages Crisis in Australia

 

The Wages Crisis in Australia:

What it is and what to do about itCover

Edited by Andrew Stewart, Jim Stanford, and Tess Hardy (University of Adelaide Press)

Australian wage growth has decelerated in recent years to the slowest sustained pace since the 1930s. Nominal wages have grown very slowly since 2012; average real wages (after adjusting for inflation) have not grown at all. The resulting slowdown in personal incomes has contributed to weak consumer spending, more precarious household finances, and even larger government deficits.

The wage slowdown has elicited concern from economists and political leaders across the spectrum. Even Dr. Philip Lowe, Governor of the Reserve Bank of Australia, has called it a "crisis," and suggested that faster wage growth would be beneficial for the economy.

This new collection of 20 essays by leading labour market experts and commentators in Australia explores the causes, consequences, and potential solutions to this problem.  The book is published by University of Adelaide Press. The book was launched in Melbourne on 29 November, with remarks from Natalie James, former Commonwealth Fair Work Ombudsman and Chair of the Victorian Inquiry Into the On-Demand Workforce.

Through the links below you may access excerpts from the book, links to participating authors, and supplementary material (including commentary, other readings, and videos). Our hope is that this collection will spark a needed debate in Australia about how to get wages back on track.

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Go Home on Time Day 2018

Wednesday 21 November is Australia's official "Go Home On Time Day," sponsored by the Centre for Future Work and the Australia Institute. This represents the 10th year of our initiative, to provide light-hearted encouragement to Australian workers to actually leave their jobs when they are supposed to. Instead of working late once again - and allowing your employer to "steal" even more of your time, without even paying for it - why not leave the job promptly. Spend a full evening with your family or friends, visit the gym, see a movie - do anything other than work.

Please visit our special Go Home On Time Day website for more information, tips on how to get away from work on time, and free posters and shareables.  There's also an online calculator where you can estimate the value of the time theft you experience, through unpaid overtime in all its forms.

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Sectoral Collective Agreement Could Combat Finance Industry Misconduct

The Royal Commission into the financial services industry has heard tens of thousands of incidents of financial misconduct. The problem is clearly not just a “few bad apples”; the problem is clearly rooted in the core structure and practice of this industry.

However, when it comes to fixing this mess, the Commission’s recent interim report provided no clear answers. Consumer education, self-regulation by banks, and even stronger enforcement efforts by government regulators all have their drawbacks. But there’s another solution that Commissioner Kenneth Hayne has so far overlooked: sector-wide collective bargaining to establish uniform, ethical pay practices across the financial industry.

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The Future of Transportation Work: Special Series, WA Transport

A special 6-part series of short articles from WA Transport Magazine:

Researchers have identified the transportation industry as one of the sectors likely to be most affected by the coming implementation of new technologies: such as self-driving vehicles, artificial intelligence, and automated logistics systems. How will transportation workers fare as these technologies are rolled out, and what measures can be taken - by employers, governments, unions, educational institutions, and other stakeholders - to ease the transitions?

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"Permanent Casuals," and Other Oxymorons

Recent legal decisions are starting to challenge the right of employers to deploy workers in "casual" positions on an essentially permanent basis. For example, the Federal Court recently ruled that a labour-hire mine driver who worked regular shifts for years was still entitled to annual leave, even though he was supposedly hired as a "casual." This decision has alarmed business lobbyists who reject any limit on their ability to deploy casual labour, while avoiding traditional entitlements (like sick pay, annual leave, severance rights, and more). For them, a "casual worker" is anyone who they deem to be casual; but that open door obviously violates the intent of Australia's rules regarding casual loading.

Here is a commentary from Jim Stanford, Director of the Centre for Future Work, discussing the implications of these decisions for the mis-use of casual work.  The commentary was originally published on the Ten Daily website.

 

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Infographic: The Shrinking Labour Share of GDP and Average Wages

The Centre for Future Work recently published a symposium of research investigating the long-term decline in the share of Australian GDP paid to workers (including wages, salaries, and superannuation contributions). The four articles, published in a special issue of the Journal of Australian Political Economy, documented the erosion of workers' share of national income, its causes, and consequences.

This infographic summarises the bottom-line impact on average wage incomes for Australian workers.

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Four Views on Basic Income, Job Guarantees, and the Future of Work

The unprecedented insecurity of work in Australia's economy - with the labour market buffeted by technology, globalisation, and new digital business models - has sparked big thinking about policies for addressing this insecurity and enhancing the incomes and well-being of working people. Two ideas which have generated much discussion and debate are proposals for a basic income (through which all adults would receive an unconditional minimum level of income whether they were employed or not) and a job guarantee (whereby government would ensure that every willing worker could be employed in some job, such as public works or public services, thus eliminating involuntary unemployment).

Progressives have campaigned for generations for stronger income security programs and for a commitment to full employment by government. So these ideas have a long pedigree. However, there is great discussion over both the implementation and cost of these proposals, and their broader (and perhaps unintended) economic and political consequences.

To shed some additional, constructive perspective on these proposals, we are pleased to present four short commentaries on basic income, job guarantees, and the future of work by four leading Australian experts on the economics and politics of work.

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Exploring the Decline in the Labour Share of GDP

The share of total economic output in Australia that is paid to workers (in the form of wages, salaries, and superannuation contributions) has been declining for decades. Workers produce more real output with each hour of labour (thanks to ongoing efficiency improvements and productivity growth), but growth in real wages has been much slower - and recently, real wages haven't been growing at all. The result is that labour's slice of the economic pie has been getting smaller. In fact, a recent Centre for Future Work report showed that in early 2017 the labour share of GDP hit its lowest level since the Australian Bureau of Statistics began collecting quarterly GDP data.

To explore the causes and consequences of this decline in workers' share of national income, the Centre for Future Work convened a special panel of experts at the Society for Heterodox Economists conference at UNSW in Sydney last December. The papers presented at that panel have been peer-reviewed and just published in the Journal of Australian Political Economy. We are very pleased to co-publish the 4 papers here.

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