Australia's unemployment rate declined to 4.2% in December, and it could fall further (below 4%) in the coming year, barring further waves of COVID or other global shocks. This has some forecasters predicting a quick acceleration in wage growth -- which has been stuck for almost a decade now at the slowest pace in Australia's postwar history.
Will a low unemployment rate be sufficient to solve the crisis in Australian wages? In this article published in The Conversation, Centre for Future Work Director Jim Stanford argues that the historic restructuring of Australia's labour market institutions over the last half-century (since the last time unemployment was below 4%) will continue to undermine wages, despite apparently tight labour markets.Read more
A new report from the Centre for Future Work's Carmichael Centre, Rebuilding Vehicle Manufacture in Australia: Industrial Opportunities in an Electrified Future details how the global transition to EV manufacturing is an enormous opportunity for Australia to rebuild its vehicle manufacturing industry. The report, written by Laurie Carmichael Distinguished Research Fellow, Dr Mark Dean, details how an EV-driven industrial future contains significant opportunities to take advantage of our competitive strengths in renewable energy, extractive industries, manufacturing capabilities and skilled workers.
Australia possesses many of the crucial elements for an EV manufacturing industry:
- Rich mineral reserves,
- An advanced industrial base,
- A highly skilled workforce, and
- Consumer interest.
The benefits of an EV manufacturing industry would be significant for our economy, society, and environment, and include:
- Tens of thousands of good-quality manufacturing jobs.
- Stimulus for further development of a high-technology supply chain.
- Opportunity to utilise Australian mineral resources (including lithium and other rare earths) in value-added industries, thus expanding their value many times over.
- Diversifying Australia’s export profile and reducing our dependence on raw resource extraction and export.
- Complementing and reinforcing our accelerating transition toward non-polluting energy sources and systems.
- Spurring enhanced innovation, research, and engineering activity in Australia – still recovering from the closure of mass vehicle manufacturing in the mid-2010s.
Will an unemployment rate with a 3 in front it, ensure that we also get wage growth with a 3 in front of it? Don’t count on it.
Prime Minister Scott Morrison set tongues wagging this week with a confident pledge that Australia’s unemployment rate could have “a 3 in front of it” this year. It’s a theme that will loom large in his campaign for reelection later this year.
In this commentary, Centre for Future Work Director Jim Stanford considers whether a low unemployment rate is an accurate indicator of the state of the labour market -- and whether, even if achieved, it would reignite wage growth and solve other problems holding back Australia's labour market.Read more
With the rise in inflation as Australia's economy struggles with re-opening and supply chain problems, each release of the Consumer Price Index (CPI) generates headlines and political debate. But the CPI doesn't necessarily provide a full reading of price pressures: depending on who you are, and what you buy. In this column published in the Guardian Australia, Greg Jericho (new policy director for the Centre for Future Work) dissects several measurement issues related to this most-watched economic statistic.Read more
The Centre for Future Work at the Australia Institute is pleased to announce the appointment of two senior staff to its team of labour policy researchers.
Greg Jericho will join the Centre on 1 February as Policy Director: Labour Market and Fiscal. Greg is an economist and well-known columnist for The Guardian in Australia; he currently teaches at the University of Canberra. He will continue writing his Guardian column, while overseeing new research projects for the Centre on issues of employment, wages, insecure work, and related topics.
Dr Fiona Macdonald will join the Centre on 1 March as Policy Director: Industrial and Social. Fiona is presently Vice-Chancellor’s Senior Research Fellow at the School of Management, RMIT University, and an internationally recognised expert on caring labour, gender and work, and industrial relations policy. She has published extensively on the Awards system, working conditions and compensation in human and caring services, and violence at workplaces. Fiona will oversee new research at the Centre on industrial relations reform, social policy, and caring labour.Read more
Snatching Defeat from the Jaws of Victory: Labour Market Implications of Australia's Failed COVID Strategy
As COVID and recession gripped the world, through 2020 and most of 2021 Australia recorded one of the best outcomes: lower infection, fewer deaths, and a faster, stronger economic recovery. That seeming victory has been squandered, however by the appalling and infuriating events of recent weeks. Purportedly in the name of 'protecting the economy', key political leaders (led by the Commonwealth and NSW governments) threw the doors open to the virus at exactly the wrong time: just as the super-infectious Omicron variant was taking hold.
The resulting surge in infections has been among the worst in the industrialised world (worse than the U.S. now, as shown in the following graph from Our World in Data). The implications of this massive outbreak for work, workers, production, and the economy have been as predictable as they are devastating. One-third or more of workers in the most-affected regions cannot attend work: because they contracted COVID, were exposed to it, or must care for others (like children barred from child care and soon, possibly, schools).
Our Centre for Future Work team has been active in highlighting the risks of 'letting it rip', analysing the failures of isolation and income support programs, and reminding everyone that keeping workers healthy must be the first priority in keeping the economy healthy. Here is a selection of our recent interventions:Read more
As Collective Bargaining Erodes in Australia, Solutions from Other Countries Could Strengthen Bargaining and Lift Wages
New research on international collective bargaining systems, released today in a special issue of the peer-reviewed journal, Labour and Industry, finds that Australia’s industrial relations system is rapidly losing its ability to support wages in the face of numerous challenges (now including the Omicron outbreak).
On the heels of new data showing further erosion of Australia’s collective bargaining system, researchers and practitioners from five countries have identified best practices from other countries that could strengthen collective bargaining and lift wages.Read more
Putting a Cap on Community: The Economic and Social Consequences of Victoria’s Local Government Rate Caps Policy
The Victorian Government’s policy of capping of local government rates revenue in Victoria is a regressive move on economic, social and democratic grounds. By arbitrarily tying the growth in total rates revenue in each local government area to price indexes, the state government restricts the ability of local governments to respond to the COVID-19 crisis with expanded, secure employment and service offerings.
Rates on property are the largest single source of revenue to local governments in Victoria. Of total Victorian local government revenue in 2019-20 ($11.7 billion), rates accounted for $5.6 billion or almost half. Since 2016-17, the Victorian state government has capped the amounts local governments can collect from their ratepayers.
New research by the Centre for Future Work, commissioned by the Australian Services Union, finds that the imposition of rate caps has cost up to 7425 jobs in 2021-22, counting both direct local government employment and indirect private sector jobs. They have also reduced GDP by up to $890 million in 2021-22. The costs of suppressed local government revenues, and corresponding austerity in the delivery of local government services, will continue to grow with each passing year if the policy is maintained.
The rate cap policy becomes more restrictive as the overall economy slows, since the rate cap is tied to inflation indexes which tend to slow when the economy is weak.Read more
The COVID-19 pandemic severely disrupted global labour markets, and exposed long-standing gaps in social protection systems. Governments around the industrialised world injected hundreds of billions of dollars into a range of unprecedented crisis measures: to support individuals who lost work, to subsidise employers to retain workers despite the fall-off in business, and to facilitate workers to stay away from work when required for health reasons. More recently, as the pandemic progressed and vaccination became widespread, governments have begun considering how to transition toward a post-COVID policy stance.
In several countries, governments with stronger commitments to public health and safety, and a more inclusive and equitable recovery from COVID-19, have been more cautious and incremental in scaling back government interventions. Some have also made permanent improvements to income security and other policies whose shortcomings became more apparent during the pandemic. In Australia, however, the phase-out of COVID-19 wage subsidies and income supports was accelerated and premature – perhaps more so than any other major industrial country. A new comparison of COVID support policies across numerous industrial countries confirms the economic and public health risks of the rapid elimination of Australia's COVID programs.Read more
Working From Home, or Living at Work? Hours of Work, Unpaid Overtime, and Working Arrangements Through COVID-19
2021 marks the thirteenth annual Go Home on Time Day, an initiative of the Centre for Future Work at the Australia Institute focusing on overwork among Australians, including excessive overtime that is often unpaid.
As the health crisis of COVID-19 has continued, many workers are doing at least some of their work from home, and the standard scenario of workers ‘staying late at the workplace’, which largely framed our analysis in the past, is now supplemented by a different dimension of excessive work and unpaid overtime. This year’s report considers whether home work will become the “new normal” for many workers even after the acute phase of the pandemic finally passes – and what new pressures on working hours, work-life balance, and unpaid overtime are unleashed by the work-from-home phenomenon. The post-COVID rise in home work may constitute a further incursion of work into people’s personal time, and a further undercutting of Australia’s minimum standards around employment (including hours, overtime, and penalty rates).
Our survey found the average Australian employee puts in 6.1 hours per week of unpaid overtime, despite the shift towards home work. This is a substantial increase from 2020, which in turn was a substantial increase from 2019. In many cases, people’s responsibilities in their home lives have increased in response to the health and social crisis, accentuating a double burden of unpaid work – one that is experienced disproportionately by women.Read more