New research from the Australia Institute’s Centre for Future Work reveals the consequences of freezing public service pay, both for public sector workers and for the broader economy.
Governments are devoting unprecedented resources to protecting Australians against the health and economic effects of the pandemic, but a contradictory push to adopt fiscal austerity measures is also becoming apparent. Leaders of governments at all levels -- federal, state and local council -- have already announced plans to freeze wages and cancel previously agreed pay raises for public servants.Read more
With many regular workplaces shut down to 'flatten the curve' of COVID-19, millions of Australians are now shifting their work to home. Home work has great potential to cushion the economic blow of the pandemic: allowing many to keep working and earning an income, and many firms and industries to continue at least partial production. But there are also many challenges and risks associated with this major shift in work patterns. Much of the increase in home work will likely become permanent, even after the immediate health emergency passes. That makes it crucial to 'get home work right': providing home workers with appropriate support and protections, and preventing abuse and exploitation as home work becomes more common.
This new Briefing Paper from the Centre for Future Work, written by Alison Pennington and Jim Stanford, surveys the scope of home work, considers its impacts on economic and gender inequality, and proposes several policy recommendations to make home work safer and fairer.Read more
The Commonwealth government's proposed JobKeeper wage subsidy scheme represents an important and promising response to the COVID-19 shutdown of several key sectors of Australia's economy. The scheme would support an estimated $130 billion worth of wage payments over the coming 6 months, keeping millions of Australians in jobs even if their employers experience major revenue losses from the restrictions that have been imposed on activity, mobility, and work during the pandemic.
However, the program as originally proposed contains several design flaws that will seriously undermine the effectiveness of the program if they are not fixed.Read more
The COVID-19 pandemic is producing an unprecedented shutdown of large parts of the national and global economies. Our Director Dr. Jim Stanford provided an overview of the coming recession, how it differs from previous downturns, and the best ways for government to respond to protect Australians as much as possible from the economic fall-out.Read more
109 Australian economists and policy experts have signed an open letter, initiated by the Centre for Future Work, supporting a government wage subsidy to prevent mass unemployment during the coming economic downturn resulting from the COVID-19 pandemic.
The letter and the full list of signatories is reprinted below. It has been forwarded to Prime Minister Morrison.Read more
The Centre for Future Work has made a submission to the 2020 annual wage review conducted by the Fair Work Commission. The submission compiles evidence showing that the annual minimum wage adjustments (which flow through into wages specified in the Modern Awards, as well as some enterprise agreements and individual contracts) have played a more important role in recent years in supporting the overall level of wage growth in Australia's labour market. Without relatively strong minimum wage increases since 2017 (of 3% or higher for three consecutive years), Australian wage growth would still be languishing at all-time record lows of under 2% per year.
In this context, the Centre argued it is vital the Commission proceed with a normal, healthy minimum wage increase for 1 July, 2020, with full flow-through into Award wages. Otherwise wage growth will slump significantly (to an estimated 0.7%, or even lower), heightening the risk of economy-wide deflation.Read more
The scale and scope of the economic downturn caused by COVID-19 will be unprecedented in our lifetimes. Mainstream economists have belatedly realised the pandemic will cause an economic downturn, but they are not yet appreciating the size of that downturn, nor the unconventional responses that will be required. Simply calling for government "stimulus" is sadly inadequate, given the complete shut-down of work and production that is occurring in many sectors of the economy. The task is no longer supporting markets with incremental "pump-priming." What's needed is a war-like effort, led by government, to mobilise every possible resource to protect Australians' health and livelihoods. Money is not an object - and this epic effort should not be held back by normal acquiescence to private-sector priorities and decisions.
That's the core message of new analysis by Centre for Future Work Director Dr. Jim Stanford, published today by the Australian journal New Matilda.Read more
The Australian government has pushed back against introducing needed measures to support workers in casual, self-employed, or gig positions during the unprecedented labour market turmoil resulting from the COVID-19 pandemic. Other countries, however, are moving quickly with unprecedented measures to support jobs and incomes for all workers - including those in non-standard employment - to ensure they can take necessary time away from work, and do not lose their livelihoods as a result of the virus. We have assembled a catalogue of international initiatives aimed at achieving these dual outcomes.
Update January 2021: Further JobKeeper and JobSeeker supports have been withdrawn. As of 4 Jan 2021, the JobKeeper subsidy is now at a maximum of $1000 per fortnight until 28 March 2021. The JobSeeker coronavirus supplement has been reduced to $150 per fortnight until 31 March 2021. We are concerned that the government is withdrawing supports too fast and too soon, especially as intermittent outbreaks of the COVID-19 virus, and concomitant lockdowns, continue in various Australian states.
We have added further information on the US response.
Update September 2020: The JobKeeper subsidy has been extended from 28 September 2020 to 28 March 2021, at incrementally lower rates as this period continues. In brief, the JobKeeper wage subsidy will continue until March next year, but payments will fall from $1500 to $1200 a fortnight after September (or $750 for those working less than 20 hours per week). The JobSeeker coronavirus supplement will continue until December but fall from $550 to $250 a fortnight, meaning people on the program will receive $815 a fortnight after September.
The Commonwealth is providing $1500 of paid pandemic leave in Victoria, New South Wales, Western Australia, and Tasmania for workers who need to self-isolate either because they are suffering from the virus or because they are caring from someone who is. At this stage, other states and territories have not signed onto this agreement.
We have added further information on the UK's response.
Update July 2020: Governments around the world continue to take extraordinary measures to contain the economic damage associated with COVID-19. The Australian government has flagged that it will end the JobKeeper wage subsidy and the JobSeeker COVID subsidy (essentially doubling the unemployment benefit) in September, and has already done so for childcare, with negative on-effects for both a particularly feminised workforce and for working women more broadly. Given that economic conditions continue to worsen despite the government's efforts thus far, it is hard to see how ending JobKeeper across the board would be either politically or economically feasible. In contrast, internationally, governments are expanding economic measures, including those specifically aimed at young workers.
Update March 2020: The Australian government announced a massive $130 billion wage subsidy program, to catch up with similar schemes that have been implemented in other countries (described in detail below). This is a welcome development, attributable largely to the advocacy of the ACTU and its affiliated unions. However, there are several weaknesses in the design of the scheme – most acutely, the fact that it excludes over 2 million short-tenure casual workers and foreign visa workers. Watch this site for a more detailed analysis of the pro’s and con’s of the government’s package. And we will continue to update the catalogue below with relevant developments from other countries as the world continues to respond to the COVID-19 pandemic.
While women have made some progress in closing the wage gap and other dimensions of gender inequality in Australia, they still face daunting and persistent barriers to their full participation and compensation in Australia's economy.
That's the conclusion from a new Factbook on gender economic inequality in Australia, released by the Centre for Future Work to coincide with International Women's Day on 8 March.Read more
There has been much discussion in recent months about the apparent slowdown in Australian productivity growth. Rather than dredging up the usual wish-list of the business community (more deregulation, more privatisation, and more deunionisation), it's time to look at the deeper, structural factors behind stagnant productivity. In this commentary, Dr. Anis Chowdhury, Associate of the Centre for Future Work, looks to the perverse role of our overdeveloped financial sector in slowing down productivity-enhancing investment and innovation.Read more